The Hindu Business Line : `Tatas investments driven by trust, stakeholder value'

Kolkata March 31 For the Tata Group, it is "important to engage with the society in which the business is located, even if the level of engagement is small", according to Mr R. Gopalakrishnan, Executive Director of Tata Sons.

Speaking at a `Round Table' on `Tata Group's attitude to investments', here on Saturday, Mr Gopalakrishnan dwelt at length on the Group's investment philosophy and the challenges taken up over the decades to "do what we have to do so long as we are convinced that it is the right thing to do". In this regard, he cited several investment decisions taken by the Tatas, which, at the time it was taken, was perceived to be incorrect and inappropriate. However, in later years, the Tatas' stand was vindicated and the businesses succeeded.

Corus acquisition

Mr Gopalakrishnan did not specifically mention the Corus acquisition when he spoke of the Tatas' global acquisition forays. Nor did he mention Singur by name when asked about troublesome developments veering round the Tata Group's efforts to set up Greenfield ventures in Orissa, West Bengal and Chhattisgarh.

He, however, said the Tatas' investment decisions were driven by trust and stakeholder value. "We do not operate in an atmosphere that is vitiated. Our Goddess is not shareholder value but stakeholder value," he said.

In an oblique reference to the Corus acquisition, he said: "we are doing the work that will help us deliver the promises of the merger."

Mr Gopalakrishnan said the Corus acquisition was not one that was meant to satisfy anyone's overseas ambitions or ego but the result of a carefully deliberated business plan. "In the past, we have walked away from acquisitions where we felt the cultural due diligence was not in our favour."

Overseas experiences

Asked what lessons the Tatas had learnt from their overseas acquisition experiences, he said the connection between domestic core business and overseas expansion should be clear, defined and pursued with persistence. The post-merger integration & processes must be consistent with the strategic intent of the acquisition.

The absolute core and non-negotiable values of the acquiring company need to be explicit to the acquired company managers. The positioning of the business in the host country should be harmonious with the actions of the company.

Finally, it would be important to engage with the society in which the business is located, even if the level of engagement is small, he said.

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