Tatas hopes to bridge cultural divide

Baiju Kalesh & Neelima Mahajan / TNN / Feb 3, 2007, 00:58 IST

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Soon after Tata Steel announced its acquisition of Corus at a packed press conference in Mumbai, managing director B Muthuraman, found himself cornered.

MUMBAI: Soon after Tata Steel announced its acquisition of Corus at a packed press conference in Mumbai, managing director B Muthuraman (fondly called Muthu at Bombay House), found himself cornered.
Hysterical television reporters and camerapersons from competing channels surrounded the man and came close to throwing punches at each other in a desperate bid for an exclusive sound byte.
To Muthuraman's credit, he kept his poise, continued to smile at the cameras (reluctantly perhaps), and fielded questions thrown at him.
Now with the camera crews finally out of his way, there are other pressing issues to handle. As LN Mittal, chairman of Arcelor Mittal, the world's largest steel company told newspersons in London: "The biggest challenge ahead of the Tatas would be how to integrate these two companies, these two cultures, how to work with a new type of management and how to work in a matured market as opposed to working in a developing market."

"Work on those fronts started in November last year," he says. That was when, in anticipation of the acquisition, Muthuraman started to meet key people from Corus worker unions in both the UK and Netherlands. But it is work-in-progress.
Now that the acquisition has actually happened, the unions want to know if the new bosses will implement job cuts. "Any change involves a certain amount of apprehension," he says.
"One of the most important jobs of leadership is to clarify such apprehensions and that is what we will be doing from now," he added.

"It is important for us to get the respect of people, get the motivation levels high, to make every single employee in the Corus organisation to understand the strength of this partnership. We will make them comfortable that their livelihood will be safe with us," says the man who had spend 30 years in the steel business.
To prove that he means business, Muthuraman has sent out invites to UK-based journalists and key union members at Corus to visit Jamshedpur in March.
"They can see our practices first hand and experience how we deal with our people here. That will give them the much needed comfort level," he says. "We are not in the acquirer mode," he adds. Says Muthuraman "We don't go around asking for bigger rooms, tables and chairs...We don't throw our weight around... That is not the Tata style."
As far as cultural barriers are concerned, conflicts usually come to the fore in cross border mergers and acquisitions. LN Mittal had to face it when his bid got mired in an ugly battle that drew in even governments in the European Union and India.
But Muthuraman thinks the Tatas have it in them to handle these differences. "Tata group companies have handled Korean, Malaysian, Chinese, Singaporean, Thai and English cultures so far. One of the most important things of handling people from other cultures is to be sensitive about what they believe in, how they behave and how they react to situations," he said.
"We have respect for what they are doing and we want to learn from them just like they need to learn from us," he says. "You can't nurse a superiority syndrome... It is the merger of two entities which will result in 1+1=3 or 4, rather than 2."
To drive his point home, Muthuraman says that even after a century of steel making, Tata Steel can still learn from Corus. "We hope to learn from Corus' strength in tin plates, metal packaging and automobile steel. To begin with, Tata-Corus combine will now be the second largest tinplate maker in the world."
Management consultants who have analysed mega merger deals have also suggested that the Tatas may resort to asset-stripping (selling off non-core assets). But the IIT-Madras alumi disagrees. "We will not walk down that route... Instead, we are interested in growing an organisation. I don't see any non-core areas in Corus."

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