beyondbrics

Emerging markets are yet to produce brands equivalent to General Electric or Microsoft. But when they do, Tata, the Indian conglomerate, would like to be counted among them.

The company,  which values its brand at about $14bn, more than double what it was six years ago,  is embarking on an ambitious branding push into the US, UK, South Africa – and China.

But it has its work cut out to home. Tata managers are worried India’s spate of corruption scandals might tarnish the global standing of its largest company.

In the foyer of Bombay House, Tata headquarters, a sign last week warned managers against cronyism.  “The true measure of a man is how he treats someone who can do him absolutely no good,” read the words credited to British writer Samuel Johnson.

In its home market, Tata fiercely protects an image of being a cut above the rest, operating under the motto “leadership with trust”.  In the boardroom, directors benchmark the company against six peers to reassure themselves that it a healthy lead in “personality traits”.

The characteristics cherished are those of “winner, mentor and fighter”. In the words of one director, Tata wants not to be admired and loved like cricket star Sachin Tendulkar.

For most of its history, Tata has nurtured a sober cradle-to-grave brand. Tata produces almost everything from salt to software. Among its critics, it has a reputation for conservatism bordering on dowdiness. For them, the conglomerate suffers the public sector-like complacency often found in large corporations with dominant market positions.

Successive leaders, drawn from the family and an urbane Parsi community, prided themselves on ethical conduct and social responsibility. Today, Ratan Tata, the chairman, ranks as India’s most respected businessman.

They also wielded considerable power. In company folklore, Lord Curzon, the British viceroy in New Delhi, was circumvented after he locked horns with the Tatas with a successful direct approach to his masters in London.

Modern Indian rulers are less easily dodged. A fiercely-contested business environment throws up multiple challenges daily.

Tata’s top management is rankled that the company has found itself mired in the high profile 2G telecoms, viewed by some as the worst corruption scandal in India’s history. As distressing has been the release of taped telephone conversations between Ratan Tata and his in-house corporate lobbyist displaying ‘fighting’ qualities not in the Queensberry rules.

The keepers of the Tata flame know the difficulties they have to surmount to build a dominant Indian brand into a loved global one.

“The Koreans didn’t want to be taken over by an Indian company,” says R. Gopalakrishnan, a director of Tata Sons, the group’s holding company,  referring to Tata’s takeover of Daewoo.

And commenting on Tata’s acquisition of UK-based Jaguar Land Rover he says : “When you buy a Land Rover you don’t say that it comes from the land of tigers and snakes.”

Recent events have made Tata’s quest tougher. Heeding Dr Johnson’s observation is a step towards leaving the tigers and the snakes behind and joining the GEs and Microsofts.

Related reading
India: Tata’s search for an heir, ft.com
FT special report: India and globalisation, ft.com