Review Article on:
Peter Casey. THE GREATEST COMPANY IN THE WORLD? THE STORY OF TATA. Penguin Books India Ltd. Gurgaon. 2014. Pp. 225, Price Rs. 599/-.
By Dr. AJ Sebastian sdb, Former Professor & Head , Dept. of English, Nagaland Central University, Kohima Campus 797001.
Peter Casey, founder and Executive Chairman of Claddagh Resources in Atlanta, Georgia and a businnessman with a difference, has struck gold with his recent book entitled THE GREATEST COMPANY IN THE WORLD? THE STORY OF TATA, which acknowledges the role of Tata Group as a major business entreprise whose bottom line is doing the right thing for society. The book traces how Tata has emerged itself from a family owned business to one of the most unique companies in the world. Casey delves deeply into the Tata secret of success from steel and automobile industry to hotels and IT world. The book traces the brief history of Tata chairmen from Jamsetji Tata who set the company in 1868, to Ratan Tata and Cyrus Mistry, besides examining its values and philanthropic trusts.
In the Preface, the author states how as a capitalist he has found a different way of successful capitalism in the Tata way. Traditionally companies are set up to make money, but Tata Group has set the principle upside down, creating values for shareholders, employees, customers and humanity.
The book has been divided into two parts: The Tata Story and The Tata DNA with appedices on: Tata Business Sectors and Companies, The Tata Code of Conduct, Letter from Jamsetji Tata to Lord Reay and A Tata Timeline.
Part I : THE TATA STORY begins with the opening chapter JAMSETJI TATA STARTS A NEW BUSINESS, which recounts how the founding father Jamsetji fashioned his dream of building a business to bring about lasting change with the purpose of not merely making profit, but to improve lives of his fellowmen. He passed on his philanthropic value system to his successors. Unlike the business tycoons of his time such as Carnegie, Morgan and Rockefeller, who ran their business for making profit, Jamsetji thought of improving the lot of others. The chapter traces a brief historical account of Jamsetji, born to a Gujarati businessman in 1839, who founded his own trading company in 1868. Beginning with cotton industry, he went on to build an Iron and Steel Plant. Though in 1902 he formulated his plan of building a modern industrial town, his premature demise in 1904, made his successors materialise his dream. In course of time, Tata set up Hydrolic Power for India, A World Class Science Institute in India and The Taj Mahal Hotel. His deathbed wish was, “If you cannot make it greater, at least preserve it. Do not let things slide. Go on doing my work and increasing it, but if you cannot, do not lose what we have done” (Casey 22).
Chapter Two : SIR DORABJI TATA, considered the unsung hero of Tata, continued in the footsteps of his father with his passion for sports and went on to become president of Indian Olympic Council which he financed. He set up various Tata Trusts: Tata Institute of Social Sciences, The Tata Memorial Centre for Cancer Research and Treatment, The Tata Institute of Fundamental Research, The National Centre for the Performing Arts, The National Institute of Advanced Studies, and the Sir Dorabji Tata Centre for Research in Tropical Diseases.
Chapter Three briefly sums up the contribution of SIR NOWROJI SAKLATWALA, who impressed everyone with his work ethic. Establishing himself as a leader for the people, he battled through the years of great Depression.
Chapter four : J.D.R. TATA assesses the contribution of J.D.R. Tata, born of a French mother and a Parsi father, known for his obsession with aviation was led to piloting planes and companies. Becoming India’s first receipient of a pilot’s licence in 1929, he went on to found Tata Airlines, India’s first commercial airline. Eventually, Air-India became his dream airlines and he remained on its board for twenty-five years. His vision of Tata led him to break-free from a family business by inducting the best pesonnnel. He went on to expand business into Tata Chemicals, Tata Electric, Tata Motors, Titan Industries, Lakme Cosmetics, Voltas, Tata Global Beverages, Tata Exports, Tata Precision Industries and TCS. As a philanthropist, J.D.R. was instrumental in establishing various trusts such as Tata Memorial Centre for Cancer Research and Treatment, Tata Institute of Social Sciences, Tata Institute of Fundamantal Research and National Centre for the Performing Arts. He took maximum care of the welfare of his employees, providing medical care, retirement funding and workers’ compensation.
Chapter Five entitled RATAN TATA, celebrates the way, Ratan Tata went on to establish the Tata empire in manifold ways, after he took over in 1991. Following the footprints of JDR, Ratan’s tendency to delegate and create a climate of high autonomy for the various Tata Companies, led them to lofty standards. Beginning of Indian economic reforms in 1990s, opened doors for further global expansion for the company. Ratan’s growth strategy led to a growth from $ 5 billion in 1991 to $ 100 billion when he retired in 2012. However, to re-establish ties with the various companies and to pull together in productive cooperation, Ratan invested financially in each company to increase Tata sons’ direct control. Since Tata family’s direct investment was reduced to mere 1.5%, as chairman of the philanthropic trusts that held majority stakes in the Tata companies, Ratan got hold of indirect control of the firm. In 1998, he promulgated a Code of Conduct to unite Tata business units in adherence to a common set of ethical values which every Tata employee signed. Under his leadership he added more establishments to the Tata group such as Tata Teleservices, Tetley Tea, debut of the Indica car, Insurance Industry, Tata Communications with Tata Sky satelite television, Tata Indicom mobile service, Ginger hotel chain, acquiring part of Daewoo Motors, steel maker Corus, acquiring Jaguar and Land Rover, partnering with Starbucks and the like.
In the wake of a major loss in 2002, due to irregularities in the financial paperworks filed by Tata Finance, Ratan stood his ground never to tolerate anything unethical. He made sure no investor would lose any money as he believed that his company had a moral responsibility to resolve issues. His dream of protecting women and children who were riding through Mumbai’s streets, led him to develop Tata Nano car in 2009, the cheapest in the world. He saw through the dark days of terrorist attacks on 26 November 2008, when Taj Hotel Mumbai came under siege. Several staff of the hotel laid their lives to protect the guests in keeping with the Tata tradition to be guest ambassadors. Rata Tata passed the torch to his successor Cyrus Mistry when he retired in December 2012.
Chapter Six explores TATA CONSULTANCY SERVICES (TCS) to show how Tata builds successful companies by investing in market where there is less barrier to enter, investing in capabilities, people and relationships. TCS has become one of the most valued companies in the world and has become the most valuable in the Tata group of 130 plus businesses through its expansion and profit. In few years TCS successfully managed IT infrastructure, transaction processing and offering consulting-led solutions to its global clients, employing over 300,000 workers in forty-six countries, becoming largest Indian company based on market capitalization. The secret of TCS success is their identifying talents and retaining top consultants and analysts and making life better for everyone, thereby becoming the top 10 by 2010.
Part II : THE TATA DNA consisting of seven chapters begins with THE ORIGIN OF TATA PHILANTHROPY based on the Parsi faith and value system committed to philanthropy. Parsi’s Zoroastrianism adheres to commitment to fight evils of humanity such as poverty, hunger, disease, suffering, crime, greed and prejudice. Their life is to be one of charity and they attain happiness by making others happy. Though the Parsis numbering about 70, 000 in India, are people in business, they contribute a great portion of their wealth to society at large. Jamsetji’s success in business came from his personal excellence and Parsi values. He used to say : “…It is that patchwork philanthropy which clothes the ragged, feeds the poor and heals the sick…but to lift up the best and the most gifted, so as to make them of the greatest service to the country” (104).
Chapter eight THE TATA TRUSTS refers to the Tata trusts set up for philanthropic purposes. The trusts control 66% of Tata assets dedicated to social service. The Tata Trusts are philanthropic trusts established by Tata family members to channel personal wealth for public benefit.
The first Tata trust was J.N. Tata Endownment in 1892. Later in 1911 he set up Indian Institute of Science. Jamsetji Tata trust was set up in 1974 to celebrate the centenary of his first company. Tata trusts have been expanded with several Allied Trusts such as Tata Social Welfare Trust, R.D. Tata Trust, Tata Education Trust, J.D.R. Tata Trust and Thelma Tata trust, Jamsetji Tata trust, J.N. Tata Endowment, Lady Meherbai Tata Education Trust, Sir Dorabji Tata Trust.
Chaprt Nine dealing with THE IMPORTANCE OF PASSION, shows how Jamsetji Tata was a passionate entrepreneur motivated by big ideas tomodernize India and sought all that money could do to improve the quality of life of people. His passion for his life’s work attracted others who followed in his footsteps. Subsequent Tata leaders who succeeded him, attracted others through their commitment to their work and altruism.
Chapter Ten entitled VALUE OF INDEPENDENCE takes stock of the way chairmen have allowed individual business units and leaders to operate as they felt best. Independence is the very essence of Tata DNA as the Tata chairmen give all the support and guidance concerning wide goals, leaving to the judgement of the company CEOs to execute. Conflict of interest among different companies is handled with care by good planning. For instance Tata has joint venturese with Singapore Airlines and Air Asia. But the two airlines have no conflict of interests as one caters to premium clients and the other serves economy class. Morally and structurally, Tata is designed to be conflict-free as each business is independent from the other.
Chapter eleven THE PILLARS OF ETHICS AND GOVERNANCE traces how for more than 140 years Tata has built itself around ethics and governance, funding charitable works through honest ways. Since shareholders believe in the integrity of the company, they know that their money is safely deposited. Tata’s ethical behaviour has led to the formulation of Tata Code of Conduct in 1998 with the pervasive theme of service to others.
Chaper twelve on THE IMPORTANCE OF SERVANT RELATIONSHIP, notes how Jamsetji Tata led the entreprise in the service of others, encompassing employees, customers, partners, shareholders and public. Tatas believe in ‘What can we do for others?’ unlike what usual business believe, ‘How can we make the most money?’ Tata builds synergy among employer and employees through servant-leader model, living a frugal life in accordance with their altruitic philosophy.
The concluding chapter entitled WHAT WOULD JAMSETJI DO IF HE WERE RUNNING TATA TODAY? brings to focus the challenges faced by present Tata Group chairman, Cyrus Mystry, the first person outside the Tata family who became chairman in 2012 at the age of forty-five. He was selected to lead the company due to his decisive unassuming style and ability to get along with everyone. He was faced with the usual Tata questions: ‘How can Tata best aid India?’ and ‘Where should Cyrus turn his attention?’ The answer lies in searching for what Jamsetji would do if he were Cyrus Mistry? His focus would turn to education, health care, settling conflict with Pakistan, energy and poverty eradication. Jamsetji would seek to expand the philanthropic initiatives throughout the world. The Tata Engage programme encourages every Tata employee to donate half a day a year to any charity in the country they are working in, and they receive full pay while doing it. The author ends the book referring to Pope Francis who spoke against global poverty due to the failure of the capitalist trickle-down economic model.
In the appendix to the book, the author provides additional information on : A) TATA BUSINESS SECTORS AND COMPANIES in Chemicals, Consumer products, Energy, Engineering products and services, Materials, Services, Information Technology and communications; B) THE TATA CODE OF CONDUCT dealing with : National interest, Financial reporting and records, Competition, Equal-opportunities employer, Gifts and donations, Government agencies, Political non-alignment, Health, safety and environment, Quality of products and services, Corporate citizenship, Cooperation and Tata companies, Public representation of the company and the Group, Third-party representation, Use of the Tata brand, Group policies, Shareholders, Ethical conduct, Regulatory compliance, Concurrent employment, Conflict of interest, Securities transactions and confidential information, Protecting company assets, Citizenship, Integrity and data furnished, Reporting concerns; C) LETTER FROM JAMSETJI TATA TO LORD REAY and TATA TIMELINE.
Peter Casey’s book is the result of his fascination with the Tata company and its structure. His voyage of discovery is an eye opener to every business to be aware of a world where the richest 85% own more than what 3.5 billion poor own and 99% of the world’s wealth is owned by less than 1% of the people. If the business world were to follow the Tata model and ethics, planet earth would be poverty free. The book with such great insights into business with philanthropic altruism is a must read for every business man/woman and people in management.
Casey, Peter. THE GREATEST COMPANY IN THE WORLD? THE STORY OF TATA. Penguin Books India Ltd. Gurgaon, 2014.
About the Author:
Peter Casey is the founder and Executive Chairman of Claddagh Resources (estd 1995) in Atlanta, Georgia, a global recruitment and search business that places high level executives with many of the world’s Fortune 500 companies. He has established his business in Australia and Ireland and operates in four continents. Named by Irish America Magazine as a leading Irish-American businessman in 2007, Casey is one who invests in people. He is an accomplished writer and a political & business commentator on Irish television programme Dragon’s Den. For more vide www.petercasey.ie.