Tata for now

Features editor

A visit to India introduced us to a very different way of doing business, practiced by one of the country’s largest and most successful companies.

On a three-day visit with other UK journalists to see Tata Group’s major activities in India late last year, two factors come across clearly: Tata is a company which clearly believes in the power of engineering, both on a large and small scale, to improve people’s lives, and also believes that industry — in fact commerce in general — owes a debt to the society in which it exists. Best-known in the UK for its ownership of Jaguar Land Rover and Corus (it also owns Tetley Tea), its operations and philosophy represent a marked difference from many large Western industrial groups.

It has a very keen sense of it own history. Wherever you go within the Tata empire, you’re watched over by busts, statues and paintings of its founder, Jamshetji Tata, whose 175th anniversary the company will celebrate this year, gazing out with an expression which seems to combine shrewdness and benevolence between a luxuriant beard and a conical Parsee hat; and the company’s longest-serving chairman, the Indo-French JRD Tata, sharp-suited and with a matinée idol’s pencil moustache, who ran the company for 50 years from 1938. Both wrote themselves into India’s history in different ways: Jamshedji lent his name to the centre of India’s steel industry, Jamshedpur, while RJD’s lifelong obsession with flying (his boyhood home was next door to Louis Bleriot, and he obtained India’s first pilot’s licence) led to him starting the airline which became Air India.

The ubiquitous image of company founder Jamshetji Tata

Jamshetji’s sons, who began the company’s engagement with charities, funded causes including Mohandes K Ghandi’s early anti-apartheid campaigns in South Africa. Charity still runs deep with Tata: two-thirds of the company is owned by chartiable trusts which give away their income every year, funding a range of causes including education and health. India’s two leading cancer research centres are Tata-funded.

The company’s connection with the UK also goes back a long way — to Jamshetji himself, who, while working for his father’s textiles trading company, visited the Lancashire cotton mills in the early 1860s. Excited by the potential of engineering and technology to revolutionise textile manufacturing but appalled by the working conditions he encountered, on his return to India he founded his own cotton mill not far from Bombay, and instituted improved working conditions such as eight-hour working days, proper ventilation, and guaranteed pensions for workers well in advance of British mills.

When Jamshetji died in 1904, Tata was involved in hotels, textiles and hydroelectric power. It was JRD who expanded it to the company that exists today, founding Tata Motors, Tata Tea, Tata Consultancy Services. He maintained the company’s political neutrality — it still does not contribute to any political party at home or abroad — and founded Asia’s first cancer hospital.

It’s striking that a company the size of Tata has displayed such strong links with the community for so long, and it’s difficult to think of any Western equivalent. There are perhaps parallels with the Quaker industrialists of the late 19th century, such as Bournville, and with Lever Brothers, who built villages and schools for their employees; although Tata seems to have been less dogmatically religious.

Moreover, Tata has embedded helping the community into its business practices from its inception. Its business plan revolves around developing products for the largest possible market, which in India means people without much money, hence the Tata Nano, the world’s cheapest production car, developed to allow people who could previously only afford motorbikes to buy a safe car to hold their entire family; it also produces low-cost water purifiers and is a player in India’s telecommunications network, connecting rural villages.

The Tata Nano, designed for the widest possible market

It must be unlikely that a company could be formed along these lines today, certainly in the UK, where the financial sector surely wouldn’t provide funds to a business dedicated to donating so much of its profits to charity. Indeed, while every business has a corporate social responsibility component today, the impression is strong that for many, it’s something to which lip-service is paid, but for Tata, it’s the main raison d’etre of the company — and we heard this over and over again from employees who had come into the company from outside. It’s certainly refreshing and heartening to encounter a large business which sees no contradiction in operating this way.

You can read more about  Tata, its engagement with the UK, and its development of technologies, in our next issue, which focuses on Tata Motors, and very soon on our website.