TATA GROUP
Tata Group is an Indian multinational conglomerate holding company headquartered
in Mumbai, Maharashtra, India. Founded in 1868 by Jamsetji Tata, the company gained
international recognition after purchasing several global companies. One of India's largest
conglomerates, Tata Group is owned by Tata Sons.
Each Tata company operates independently under the guidance and supervision of its own
board of directors and shareholders. Significant Tata companies and subsidiaries include Tata
Steel, Tata Motors, Jaguar Land Rover, Tata Consultancy Services, Tata Advanced Systems
Limited, Tata Power, Tata Chemicals, Tata Global Beverages, Tata Coffee, Tata
Teleservices, Titan, Voltas, Tata Cliq, Tata Communications, and The Indian Hotels Company
Limited (Taj Hotels), TATA Autocomp Systems Ltd.
Tata Sons is an unlisted company. Around 66 % of its shares are owned by the various Tata
trusts, most importantly Sir DorabjiTata Trust (27.97%) and Sir RatanTata Trust (23.56%).
The next major chunk of 18% is controlled by ShapoorjiPallonjiGroup, whose heir apparent is
Cyrus Mistry. (“Mistry”)
CONFLICT BACKGROUND
Mr. Mistry was
appointed as the
chairman of Tata Sons in
the year 2011 who was
the sixth Chairman of
Tata Sons.
In the Board meeting of
TATA Sons Limited held on 24th
October, 2016,
Mr. Cyrus Mistry, was replaced
with immediate effect and Mr.
Ratan Tata was appointed as
the interim Chairman of TATA
Sons.
Further, the Board constituted a
Selection Committee comprising
Mr. Ratan N. Tata, Mr. Venu
Srinivasan, Mr. Amit Chandra, Mr.
Ronen Sen and Lord Kumar
Bhattacharyya, as per the provisions
in the Articles of Association of Tata
Sons, to choose a new Chairman
within four month.
Negotiating Agreement
I. Don’t Bargain Over Positions:
Any method of negotiation may be fairly judged by three criteria:
It should produce a wise agreement if agreement is possible.
It should be efficient.
And it should not damage the relationship between the parties.
A wise agreement can be defined as one that meets the legitimate interests of each side to the
extent possible, resolves conflicting interests fairly, is durable and takes community interests
into account.
But here Tata sons used Being nice is no answer strategy.
In 2011, when Ratan Tata cherry-picked Mistry, it was seen as the victory of youth.
“Be your own man”, was Tata’s advice to his then 43-year-old successor. But soon,
youth was perceived as insolent, precocious and out to destroy “the core values that the
group stood for, for close to 148 years.
There was a fundamental disconnect between Mistry and Tata, particularly with regard
to ethos, values, vision and the direction that the group was headed in.
Several of Mistry’s decisions, including the disposal of some of Indian Hotels Co’s
overseas properties and especially the move to shut the UK steel operations, did not go
down well with Tata Trusts.
Shareholders of Tata Sons, in an extraordinary general meeting (EGM) on a Monday
afternoon, voted to remove former chairman Cyrus Mistry as director of the company
without any adequate reason.
But in the end, it was a coup that was planned to perfection and executed to the tee.
Here it is also a perfect example of Hard negotiation were Tata trust used all instruments at
hand in the pursuit of one-sided advantage. Pressure, bluffing, tricks, etc. are applied in order
to outsmart Mistry. Hard bargaining is about pushing through one-sided interests and it follows
the competitive logic of zero-sum games in which one side’s losses are the other side’s gains.
What if they use dirty tricks?
There are three steps in negotiating the rules of the negotiating game:
Recognise the tactic: Tata sons unhappy with the business decisions made by Cyrus Mistry
and they thought of removing him as a chairman
Raise the issue explicitly: All the companies under the tata group have conducted meeting
and removed Cyrus Mistry as chairman and they have conducted the EGMs to remove Cyrus
Mistry from the chairman of tata group. They have spotted the plot and made him feel
uncomfortable.and have raised the issue explicitly
Questioning the tactics legitimacy and desirability:
They can question the legitimacy moves of Cyrus Mistry as he is the major share holder with
18% and ask him why he have sold the steel company in Europe that is going good and
question him what is his desire in selling that company.
Phony facts:
The annual reports of Tata Motors Ltd don’t mention what were the losses run up on the
Nano car—which Mistry mentioned in the leaked email
We can see that these are false allegations made by Cyrus Mistry
Here he should have bargained with the tata sons but he haven’t done so so they have
removed from the chairman position
