Youth perception study on TATA group and exit of Mr. Cyrus Mistry

Introduction

The date of 24th October, 2016 becomes an exceptionally important date in the entire 148 years of glorious and untarnished history of the Tata Group. The sudden change in top leadership position without any prior indication, in form of removal of Mr. Cyrus Mistry as Chairman of Tata Sons Ltd. and there by the Tata Group Companies, and reinstating Mr. Ratan Tata as interim Chairman is not only an unprecedented event in the Tata Group history, but is also a shocking piece of news for the country as a whole. The Salt to Software conglomerate, Tata group touches lives of millions every day and employs a whopping 6,60,000+ people and accounts for more than 5 % of India’s GDP. Of course the news was of humungous importance for all directly connected with the Tata Group, but it was also important from various perspectives for different stake holders nationally and internationally. And as has become the norm in the current era, social media was instantly abuzz with the news. Along with that, all major TV channels instantly picked up the threads and started weaving their own stories. Since no specific reason was attributed for the sudden decision, speculation and guesswork led to conjecturing of various story lines by people as per their personal whims and fancies across the nation. Multilateral interpretations of expert opinions made anybody an instant jurist giving out self-asserted judgements on what must have happened and the cause of such an event.

The Research

The why may or may not be answered in the near or far future, and nobody may be the wiser for it, but the event definitely rings in the minds of people even those mildly interested in the Indian economy, commerce or industry. With advent of communication technology, information travels extremely fast over various communication channels supported strongly by the digital medium. It is the lower age groups that are understood to be more conversant and comfortable with newer technologies. This led to a tremendous flow of communications and information across personal communication channels on the matter of ouster of Mr Cyrus Mistry. Youth (18 to 30 Years) is considered most hands on with the new communications technologies and almost every youngster holds a smart phone connected to the internet. With this being the scenario, it becomes very interesting to understand what the youth is thinking about the change of leadership and its aftereffects. With this interest and objective, a dip-stick research study was immediately undertaken by a small team. A short questionnaire was developed and shared over internet and WhatsApp in the structure of a google form with a condition that it be responded by people in the age group of 18 to 30 years of age only. Gender, education and age were considered for demographic variables and questions were framed to understand the perception of youth on the decision and the impact it will have on the group from different perspectives.

Within hours of broadcasting on WhatsApp and sharing the questionnaire through emails, responses started coming in. Responses to ten specific questions ranging from importance of the event to whether it is only a social media hype, to shaking of confidence among investors, employees and customers were analyzed. Impact on the image and Mr. Mistry’s business style were also analyzed. Following are the broad observations from interpretations of findings as they emerge from the quick data analysis.

Office Politics and Dynamics

While respondents are almost unanimous in their belief about strength of the corporate brand to withstand any emergent situations, there is a definite concern on some issues and aspects of investor confidence. Considering the size and popularity of Tata Group, general public interest in the group is very high and removal of a Chairman without any prior indication, that too without any explanation raises a host of questions in the mind of people and makes the event a very important one in the history of the company as well as in the Indian business and industry sector. The analysis finds that female respondents do believe this to be a result of office politics while male respondents are equally divided on the issue. Very remarkably, majority employed or in business males do not subscribe to the theory of office politics, whereas employed females strongly believe it to be a matter influenced by office politics. Not implying any stereotype, but a definitive large number of females feel major decisions in the corporate are influenced by Office Politics.

Investor Confidence, Social Media Hype and Employee Moral

Assessment of impact of the decision on investor confidence towards Tata Group indicates that this event has led to a shaking of confidence towards Tata Group investments amongst investors. Along with this it is found that the matter is unnecessarily hyped up by social media more than what is called for. In our research, social media is playing a big role in bringing events to limelight, whether correctly or not, it is a strong belief among youth and more so among males. Employee morale is usually impacted whenever there are disturbances in senior management cadres. Surprisingly, this research throws up very contrasting results wherein respondents who are in jobs or businesses, a large three-fourth of female respondents indicate that the event will affect employee morale against which, 70% of the male respondents in jobs or businesses believe that there will be no effect on employee morale. A similar contrast of opinions is observed among the Under Graduate and Post-Graduate level respondents.

Customer Confidence

The brand constantly drove to supply their values and in turn, create an image in the minds of their customers (Witzel, 2010). This being a vital element, the researchers wanted to assess the perception of youth in respect of impact on customer confidence and would it be shaken in response to the event. While overall responses from male and female respondents do not show very contrasting opinions, certain observations are noteworthy such as, majority male respondents, which include 84% from Under Graduate level, believe that the customer confidence will not be affected. This opinion is shared similarly but among female respondents of Post Graduate level, and from the male respondents in jobs/businesses. At different levels of education or profession the opinion varies drastically in respect of customer confidence.

Sole Responsibility

When it comes to holding Mr. Cyrus solely responsible, there has been a very strong negative response from Under Graduate females (84%) for Mr. Cyrus to not be held solely responsible. This is also shared by Post Graduate female students with a percentage of 66% saying he should not be considered solely responsible. Across all three categories of male respondents, undergraduate, postgraduate or in job or business most of the responses went against the notion that Mr. Cyrus should be solely held responsible for the situation at the Tata group.

Focus on High Revenue Businesses

Mr. Cyrus Mistry is blamed for his focus on high revenue businesses or cash cows (Corporate Trends, 2016), the Under Graduate and Post Graduate female students do not agree with Mr. Cyrus’s approach with a high 76% and 66% responses respectively indicating his approach was not correct. This is very similar to the responses from the male Post Graduates and in job or business respondents, with a percentage of 64% and 65% respectively. Hence, this research shows that the respondents show a very strong stance in how they are against Mr. Cyrus’s approach and strategies.

Resolution at Group Level

With the news of Mr Mistry approaching the court on his ouster, researchers wanted to know the perception of youth on the issue being solved at the group level. Females are of the opinion that it will be solved at the group level. Likewise 69% males also think that this entire matter will settle down at the group level. Majority of these responses come from post graduate male students and females in jobs and business who are very positive on this issue being settled as soon as possible. Over all respondents are confident that this issue will be resolved at the earliest. Inference can be drawn from this that people are assured that the court case will not be a prolonged case and that both the parties will come to a solution amicably.

Sentiments of International Investors

Data analysis indicates that male respondents have a strong belief that this event will not affect the sentiments of international investors, against which large numbers of female respondents believe this event will have an effect on the international investors. Though overall, majority respondents think that this event shall not affect the sentiments of international investors. Short term events like change in the top hierarchy and management of the group does not have any huge impact on the psyche of the overseas investors.  These events are perhaps taken lightly globally, keeping the long-term performance of the company in mind.

Conclusion

Youth in India strongly support the notion that Tata Group is as strong as the steel they produce. While there are some hiccups in terms of shaking of domestic investors’ confidence in Tata Group for investments, it can be understood to be due to the undue hype being created on the social media rather than other factors. Though the event is a very big and important event in itself it is not likely to make much damage to the customer confidence. While on one side people do not want to blame Mr Cyrus Mistry as solely responsible for the situation at Tata Group, they are not in favor of the approaches professed by Mr. Mistry for focusing on Cash Cows or high revenue businesses. The resolve and tenacity of Tata Group are legendary and their response post Taj Attack is folklore. This research also indicates that the matter will be resolved at the group level. Finally, research indicates that Tata name is strong not only in India but also overseas with international investor confidence also not to be affected by this event.

Bibliography
Corporate Trends. (2016, October 24). Retrieved from Economic Times: http://economictimes.indiatimes.com/news/company/corporate-trends/mystery-behind-mistrys-exit-5-things-you-should-know-right-now/articleshow/55034582.cms
(2010). In M. Witzel, Tata: The Evolution of a Corporate Brand.

Prof Hemant C Trivedi – Chair,  FLAME School of Communication, FLAME University, Pune.
Ms Ipsita Roy – Student, FLAME University, Pune
Ms Sunayna Devaiah – Student,  FLAME University, Pune
Mr Monil Shah –  Student, FLAME University, Pune

 

One comment

  • It’s definitely going to be interesting to see how this entire crisis evolves and how the story unfolds. As a keen follower of Indian business practices, I believe that there is nothing that can stop the growth of this conglomerate for the only reason that the man replacing Mr. Mistry is one of the most influential and highly respected individual in the country. Contrary to the results of the survey, I believe that the situation will only worsen and become more competitive and will not be resolved immediately. This is due to a number of reasons which include the fact that the Mistry family is the biggest individual stakeholder in tata sons (18.4%) and that the ouster of Mr. Mistry as chairman of Tata sons does not affect his position as Chairman of different Tata Companies. The unity of command will now be affected and knowing Mr. Ratan Tata, he is not the kind of man who will bow out and stay away from altercations with anyone when it comes to saving his family’s legacy. Also, blaming Cyrus Mistry for focussing on only cash cows is not required. A business runs to maximize its profits and to provide maximum returns to its shareholders. I do not see anything wrong on his part. We must not forget that this is a fight between two of the biggest names in the Indian business circuit and it’s a fight for one’s dignity and respect Vs One’s family’s legacy.

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