The year 2004 is the
year of the Tatas. The year commemorates the 100th anniversaries
of the three legends of the Tata Group which till now is synonymous
with ethics, trust, diversity and business acumen in the Indian
corporate scene. TWF correspondent T Pyne speaks to the captains
of the industry and travels back in time to comprehend the
importance of being Tatas
This is a year less ordinary for two of India’s premier
business houses which are synonymous with corporate power
and pelf for generations. But the two are consuming much of
the newspaper inks for different reasons. While the Birlas
are sucked into an unsavoury legal controversy over the will
of a late family bahu, it is celebration time for the Tatas.
For this is the centenary year of three of the trail blazers
of the Tata Group.
On May 19 fell the death centenary of the founder of the
Group - Jamsetji Nusserwanji Tata. It was followed by the
birth centenary of father of Indian aviation industry Jehangir
Rattanji Dadabhoy (JRD) Tata on July 29. Now the first family
of the Indian corporate world awaits the birth centenary of
Naval Tata on August 30.
“The group is an influencing force for any business
in India, as they are the benchmarks. It’s difficult
not to be influenced by what they have done,” aptly puts
RPG Enterprise Vice-chairman Sanjiv Goenka.
From a small textile unit named Alexandra Mills to Tata Consultancy
Services Ltd (TCS), India’s largest software company--
it was a long journey for the Tata Group.
But the journey was not smooth for the man, who formed the
genesis of the group.
One hundred years have gone by since Jamsetji Nusserwanji
Tata passed away.
India has produced a host of great entrepreneurs and industrial
leaders with outstanding qualities during this long interregnum.
And yet, J N Tata continues to occupy a unique, unrivalled
position in the annals of Indian business. There never has
been even a mild challenge to his supremacy.
Jamshedji is reminisced as a person, who conceived of business
ideas and plans that must have seemed impossible to accomplish
to his contemporaries.
Within him there was a rare combination of a businessman
and a man having concern for values, ethics, and responsible
corporate citizenship. This value system became an essential
part of the group’s philosophy making it one of the rare
mixture of sorts.
The pioneering industrialist started career as an industrialist
in 1869 by purchasing an old and crumbling oil-pressing factory
in Bombay, which was converted into a textile unit called
Alexandra Mills.
By that time the young hero had finished studying in Elphinstone
College in Bombay and had successfully completed some assignments
in China.
The untiring spirit of enterprise carried him forward as
he sold of the factory only after two years for a handsome
profit and left for England to gain first-hand knowledge of
textile manufacturing in the world's most developed country.
Equipped to re-enter the cotton industry in a big way, soon
after returning home in 1874, he launched the flagship company
of the Tatas during his lifetime - Central India Spinning,
Weaving, and Manufacturing Company.
Despite initial criticism that the business venture would
be non-viable, the mill with 14,400 spindles and 450 looms
started functioning on 1 January 1877, the date on which Queen
Victoria was proclaimed the Empress of India. To celebrate
the event, the factory was named Empress Mills.
Bolstered by the success of the venture, Jamsetji decided
to expand his textile operations and purchased, at a throwaway
price, a derelict, tottering mill in a Bombay suburb and reorganized
and renamed the company registering as Swadeshi Mills in 1886.
Tata's textile expansion was rounded up in 1903, when he
acquired another mill in distress, this time in Ahmedabad,
and relaunched it as Advance Mills.
Although Tata operated as Managing Director reporting to
the board of directors he had to eventually fall back upon
the managing agency structure, placing the mill under the
care of his family firm, Tata and Co., that would be reconstituted
as Tata and Sons in 1887.
There were failures. Like the launch of shipping line from
Bombay. But that did not dampen his spirit. The most successful
among the minor ventures of Jamsetji was Taj Mahal Hotel established
in Bombay to provide for a world-class shelter to discerning
tourists to the city. However, Jamshedji’s death in 1904
in Germany marked the end of an episode in the Tata history.
But the Tatas movement to greater heights continued under
the leadership of Sir Dorabji Tata and later by Sir Ratan
Tata (not the present chairman).
Mr Naval Tata, who was the cousin of J N Tata and the adopted
child of Sir Ratan Tata’s widow, also entered the Tata
Group during J R D Tata’s regime as a clerk-cum-assistant
secretary after completing his graduation and a short Accountancy
course in London.
Mr Naval Tata, who rose to become the Deputy Chairman of
Tata Sons and contributed in guiding several of the group
companies and trusts during his decades long carrier, was
awarded the Padmabhusan by the Indian President in 1969.
Mr Tata, the father of the present Chairman of the Tata Group
companies Ratan Tata, was responsible for instilling in the
group the labour guidelines that acted as the guiding force
for the future generation of entrepreneurs
The group added a distinct feather to its cap with the formation
of Tata Iron and Steel Company in 1907, heralding India’s
entry into the steel age. In the same year the group also
went global with the formation of Tata, London.
The Tatas spread their wings further with formation of Tata
Hydro Electric Power Supply Company, the first venture in
the power sector in 1910.
The group progressed and reached newer heights under the
chairmanship of JRD Tata, the legend of his time, who carried
forward the legacy.
Jehangir Ratanji Dadabhoy Tata or JRD, as he was fondly referred
to, took over at the age of 34 as chairman to guide the destiny
of India's largest business house for well over half a century.
The meteoric rise continued with the establishment of The
Andhra Valley Power Supply, The Tata Oil Mills Company (for
making soaps, detergents and cooking oils), Tata Power, Tata
Press, Tata Airlines, Tata Chemicals, Tata Industries and
The Tata Engineering and Locomotive Company (TELCO) to manufacture
commercial vehicles.
Tata Inc, New York, Lakme, Voltas, Tata International AG,
Switzerland, Tata Robins Fraser and Tata Finlay, one of the
largest tea producers, with 53 tea estates, got established.
Tata Consultancy Services, Tata McGraw-Hill Publishing Company
for publishing educational and technical books., Unitata Sdn.
Bhd., Malaysia and Tata Precision Industries, Singapore, followed
suit.
In 1986, Ratan N Tata was appointed as the chairman of Air
India, long after JRD, founder of Air India, has ceased to
occupy the post. The Tata group’s ascendance to excellence
continued unabated with the establishment of Tata Telecom’s
factory in Gandhinagar, Tata Honeywell factory at Pune, Tata
Chemical’s fertilizer plant at Babrala in Uttar Pradesh
and Titan Watches plant at Hosur in Tamil Nadu.
The group progressed further under the chairmanship of Ratan
N Tata after JRD stepped down as chairman of Tata Sons, after
more than 50 years at the helm.
Under Ratan Tata’s leadership Tata Indica, India's first
indigenously designed, developed and manufactured car, was
launched in 1998 and Tata Tea acquired Tetley Group, UK, to
turn it into the No 2 tea company in the world.
The group also consolidated presence in the IT services and
telecommunication services sector with the acquisition of
51 per cent stake in CMC Ltd and a controlling stake in Videsh
Sanchar Nigam Limited, India's premier international telecommunications
service provider.
Observes Sanjiv Goenka, Vice-Chairman of RPG Enterprises,
“It’s a group on the move.” “Every Tata
activity during the last half- a century had continued to
influence the Indian business leaders and it is natural that
the future generations would also draw their influence from
them,” Goenka admits. “The Tata example reassures
you that it is possible to expand without compromising with
value,” says Mr Goenka.
Echoes Harshavardhan Neotia, Director of Gujarat Ambuja Cement,
“The Tata brand signifies trust. It is perhaps the most
recognized and trusted brand in India. There is an all-pervasive
feeling that the Tatas have responded to India’s economic
and business growth in a very positive manner. They have contributed
significantly by having an all inclusive approach. Their commitment
for integrity, trust and quality stands out.”
“The Tata Group does create a lot of inspiration for
all of us young entrepreneurs. They
have been successful over more than a century. In today’s
turbulent world, enduring success for such a long period itself
is a testimony of the strong values of the organization,”
Neotia feels.
“It is impossible to speak of India’s development
without considering the impact that the Tata has had on that
development. Not only were the foundations of Indian enterprise
laid by the Tata Group, but this group also had the vision
that industrialization was critical for nation building. The
group’s visionary leadership and path breaking business
acumen have had an indelible impact on Indian industrialisation,”
says Sanjay Budhia, Managing Director of Patton Group.
“Our business decisions have been strongly influenced
by the Tata Group. Their ability to look beyond the present,
to innovate, to articulate a vision, to be a trendsetter;
these are all qualities which have been a constant source
of inspiration to us”.
“The Group has consistently been a benchmark for every
generation since its inception and no doubt, given the ideals
it stands for and its business practices, it will continue
to influence future businessmen,” Budhia says.
The sensitive Indian bourses know it better. On July 29,
the birthday of JRD, the Tata Consultancy Service (TCS) issue,
the largest initial public offer (Rs 5000 core) ever made
in the country, roared off the block with 92 per cent of its
shares sold out in the space of hours while it was oversubscribed
1.6 times by the second day.
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