The most unusual aspect of the
Tata group's international acquisition strategy is the extent to which the targets sort of see the Tata group as a friendly acquirer - and that is something. It is a bit different from a situation like GE Healthcare under Jeffrey Immelt buying 200 companies and having a pretty good idea of what they wanted to do with each of them.
Among other things, Ratan Tata's strategy reflects an understanding that companies coming from India
are good in certain things and not so good in certain other things. And if you really want to combine Indian strength and traditional Western strength, you probably need a different way of doing an acquisition.
There is a group-level perspective on what percentage of the group's revenue was to come from international operations. My understanding of the process was that there were top-down targets. This was years ago and the target was much lower than the actual number currently is. So, certainly the target has been exceeded. It was clear to the people in the group
what Tata's vision was.
{mosimage} It's been a portfolio approach. So, rather than "we're going to do one big acquisition" and hope that it works out, which it usually doesn't, there were different acquisitions being tried out. Probably the one that came closest to being too large was Corus. It got penalised by the fact that the acquisition happened just before the big weakening in global steel prices. That's my understanding from afar. Nobody could predict that the world was heading into the worst recession of about 50 years back then.
But, contrast that with Cemex's acquisition of Rinker at the top of the (economic) cycle. Rinker came close to bankrupting Cemex. While Corus created some nervous moments, it was never that large in relation to
the size of the Tata group. There were some tense moments. But, if you compare this with Cemex-Rinker or the Bharti-Zain acquisition, it's not the same amount of stretch, although it was a big deal and one that I worried about a great deal.
At a personal level, what has helped
Ratan Tata make these calls right is a very cosmopolitan mindset. I wouldn't say that all Indian business leaders are blessed with what Ratan Tata started out with, personality wise. There was a willingness to engage and listen, which tends to work better with learning.
Given who he is and what he runs, he has a
surprising willingness to listen if you do have a case to make that doesn't entirely agree with his perspective on an issue. With many business leaders, I wouldn't even try to have that discussion.
The Tatas have historically had a different approach to modernisation. If you have that in your DNA as opposed to a more traditional, you know, Marwari business group - and I am from Marwar by the way - that presumably has some bearing.
So, a lot of this also had something to do with the history of how the group grew, what it always stood for. Ratan has done a great job in leveraging that and taking the group much higher than any of his predecessors had dreamed.
(As told to Dearton Thomas Hector and Josey Puliyenthuruthel)
Pankaj Ghemawat is a professor at the IESE Business School, University of Navarra, Spain. He has been a global strategy adviser to Tata Group companies such as Tata Consultancy Services for over 12 years.
Pankaj Ghemawat is a global strategy adviser to Tata Group companies 
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