MUMBAI -- The turmoil in the top echelon of the Tata Group underscores how problems are coming at India's biggest conglomerate from an unconventional point of view: religion.

Colaba, a district in the southern part of Mumbai, has a peculiar section that features a grand stone gate leading to a spacious central courtyard, surrounded by collective housing units. A prayer room stands deep in the compound, where only believers in Zoroastrianism, the world's oldest monotheistic religion, are allowed to reside.

While there are only a little more than 100,000 Zoroastrians in the world, the bulk of them live in Mumbai and elsewhere in western India. The Parsees, as Zoroastrians are commonly called in this country, adhere to strict religious beliefs and emphasize solidarity among themselves.

Cyrus Mistry, 48, who was suddenly ousted as the sixth chairman of the Tata Group on Oct. 24, and his predecessor, Ratan Tata, 78, who has returned to the post on a provisional basis, are both Parsees.

While the reasons for Mistry's sudden dismissal are unknown to the public, the Tata Group has a number of problems. One is that of succession.

Parsees sometimes joke darkly that there will be none of them left in 100 years. In ancient times, they promoted marriage among relatives as a way to maintain the purity of bloodlines. They still have strict rules about marriage today. Children born to Parsee fathers can themselves become Parsees. But women of other faiths marrying into Parsee families cannot convert to Zoroastrianism or enter Parsee temples, splitting households along religious lines.

One unmarried Parsee man in his 40s spoke of the difficulty of finding a suitable partner within the small Parsee community. At one point, the hotel worker considered marrying a woman of another faith. But both his parents and hers objected to the match, he said. Outsiders often have difficulty accepting customs unique to the faith, such as leaving the dead on ceremonial altars to be picked apart by birds. Cremation is avoided because of fire's sanctity to the faith.

Membership in Zoroastrian community is patrilineal, meaning that children born to Parsee mothers and non-Parsee fathers are excluded. Young Zoroastrian women often marry men of other religions due to the shortage of potential Parsee mates. The population of Parsees has declined as a result.

The Tata family tree shows a shortage of young candidates to take over the business. Ratan Tata, who has never married, had planned to retire at age 70, in 2007, according to people close to him. After struggling to find a successor, he finally turned to Mistry, chosen by a selection panel, in 2011.

Mistry was born into the Pallonji family of Parsees, which has a major equity stake in Tata Sons, the holding company of the Tata Group. He is also related to Ratan Tata through marriage, and became involved in the management of Tata Sons in 2006.

His competence as a corporate manager was little known to the public at the time. The selection panel picked him as Ratan Tata's successor from a small pool of candidates, possibly because he is a member of the Pallonji family and a relative of the Tata family.

Communal harmony

If Mistry is out for good, the only Parsee left on Tata Sons' board, aside from Rajan Tata himself, would be an independent director, according to Jehangir Patel, editor of Parsiana, a magazine aimed at the Zoroastrian community. This would be "unfortunate," he said, adding that "it would be nice" for the company to carry on such Parsee traditions as charity and equality.

The Tata Group prioritizes long-term profit, and its corporate philosophy enshrines the ideas of harmony with community and corporate social responsibility. These values stem in part from the history of the Parsees, who were originally outsiders in Indian society, having fled their native Persia for India around the 10th century amid the rise of Islam.

The community gained prominence in Indian society after the arrival of the British in the 17th century, who elevated Parsees to positions of power, helping Britain govern in the process. The Parsees' light skin, as well as their freedom from the caste system governing India's Hindu majority, is said to have helped ingratiate them with the colonial power.

The Tata family thrived thanks to the profit it accumulated from trade under British rule. More than 50 Western paintings collected by Dorabji Tata, the second chief of the Tata group, and his younger brother now hang at Mumbai's premier art museum. So do portraits of group founder Jamsetji Tata and the elegantly dressed wives of prominent family members. The group's corporate philosophy reflects an awareness of the enormous wealth the Tatas generated as a Parsee family, as well as their status as outsiders in India.

Visitors at the Chhatrapati Shivaji Maharaj Vastu Sangrahalaya museum in Mumbai view paintings collected by the Tata family.

While the reasons for Mistry's dismissal have been subject to much speculation, the Tata Group continues to grapple with the side effects of its rapid expansion and the globalization under Ratan Tata. The day after being dismissed, Mistry pointed out that the group's five core business units may face huge impairment losses. Several of them undeniably have unprofitable operations.

Mistry was tasked with addressing those side effects. But his reform initiatives were delayed, possibly because of his inability to demonstrate strong leadership. He was relieved of his post amid problems that have damaged the Tata Group's credibility, such as the battle over the termination of a joint venture between its telecommunications unit and Japan's NTT Docomo.

Many have described the ousted chairman's reforms as incompatible with a group philosophy emphasizing coexistence with local communities and job protection. But Mukund Rajan, a former member of the Group Executive Council established by Mistry, defended moves to modernize the company.

"The global brand campaign" begun under Mistry "will create an understanding that Tata is a global enterprise" that is both "trustworthy" and "a good corporate citizen," Rajan said. "Understanding of the Tata brand must match this international footprint of the group."

A number of bold corporate reformers, such as Pepsico CEO Indra Nooyi and Carlos Ghosn of the Nissan-Renault alliance, were discussed as possible successors to Ratan Tata when the chairman first decided to step down. Such a leader may have have tried to engineer and even faster group overhaul than Mistry did.

Globalization is subjecting the Tata Group to intensifying competition, raising the question of whether it can turn around unprofitable operations without workforce reductions and other restructuring while still adhering to its belief in communal harmony. The philosophy of the Parsees has so far been workable in India, where competition is not fully liberalized due to remaining restrictions on foreign investement. But it is now being tested.

Mistry's dismissal is disappointing, said Nilufer Mistry, a Parsee woman in Mumbai who claims to be a distant relative of the ousted leader. As the group continues to globalize, a non-Parsee executive could be put in charge, she said, expressing doubt about such a leader's capacity to grasp the group's core ideals.

The leading Indian conglomerate is embroiled in a conflict between the historical legacy of the Parsees, who struggled to establish themselves in India, and the globalization of its business.