Business Case Studies, Leadership Case Study, Tata Group,Ratan Tata

Code :LDS0008

Year : 2005

Industry :Business Law, Governance and Ethics

Region : Global

Teaching Note:Available

Structured Assignment :Not Available

Abstract: For years, companies like GE (General Electric Inc.), Unilever and McDonald's had been grooming internal candidates to take on the responsibility of CEO's (chief executive officers). At the same time, many other companies were finding that the experience of their top management candidates was not preparing them for the jobs they were expected to fill. With the increasing rate of failure among top executives, more and more companies were looking for outside candidates to manage the business enterprise successfully. The turnaround of IBM (International Business Machines Corporation), under the leadership of Louis Gerstner, an outsider, was one of the best examples. By 2004, the trend had been to prefer an outsider rather than an internal candidate for the top positions. But research studies showed that the internal candidate at the top position was likely to perform better than an outsider. With the rising accountability to the shareholders and falling supply of able managers, the pressure was tremendous on the directors of a company to select the right candidate.