Tata Group Organizational Structure

The Tata Group is a very complex organization, owning many different companies but the ownership structure is highly difficult to grasp, seeing as there is cross-ownership and ambiguity regarding who makes the decisions (The Economist, 2016; The Economist, 2017; Mundy and Mallet, 2018). According to The Economist (2016), Tata Sons mostly hold the decision rights as they have big influences regarding subsidiary board members, and the control of the Tata brand name. The Economist (2017) also suggests that Ratan Tata holds a lot of power of the governance of both the Tata Trusts, Tata Sons, and individual Tata companies. At the same time, Mundy and Mallet (2018) stated that Tata Sons only had the majority stake in two of the 28 stock exchange

The HQ thereby helps their subsidiaries in sharing important knowledge and capabilities amongst each other (Teece, 2014). He also suggests that the HQ is also the main holder of assets, and the player in the MNC that allocates the financial resources in order to enter businesses or enter new markets. However, subsidiaries still play a pivotal role in the theory of dynamic capabilities, as they create own processes, resources and practices that can potentially be shared with other parties in the MNC network (Teece, 2014). Thus, the very complex nature of Tata’s MNC structure regarding ownership structures can be problematic, as it could be complex for Tata Sons to effectively help facilitate

(2011) suggests that the level of local and internal embeddedness of a subsidiary significantly influences the capability development of the subsidiary. A subsidiary is able to develop its own, specific capabilities which are inherently different from the parent company, and this is in essence a function of the level of embeddedness in the local context (Meyer et al., 2011) At the same time HQ are struggling between balancing a subsidiaries local embeddedness and overall MNC network embeddedness. However, the authors also suggest that the level of embeddedness in the local context is in itself dependent on if subsidiary or HQ have the principal decision rights. While ownership rights influence the decision making in a subsidiary, i.e. the level of controlling stakes, there is a still a bargaining game between the subsidiary and HQ (Meyer et al., 2011). These theoretical aspects are interesting in the Tata case, considering the very varying level of direct controlling stakes by Tata Sons. Looking at the ownership structure of Tata, it is interesting to note that Tata Sons owns a substantial part in TCS (73,3%), the best managed company in the group, while in other companies such as Tata Steel, Tata Motors, Tata Tele, and Tata Power, Tata sons only owns 30-37% of the companies (Credit Suisse, 2017: pp. 9). Also evident is that Tata Steel, Tata Power, and Tata Tele has a lot of cross-holding with other Tata subsidiaries, while Tata Motors and TCS are more directly