Book Review

Published: Dec 29, 2021
Updated: Dec 29, 2021

Tata Empire: Conglomerate with a conscience

The book under review is not merely a historical account depicting the growth story of the 150-year-plus Tata empire spread over several countries across the globe. It is much more than that as the publication brings to light many lesser-known facts and throws valuable insights into the way they conduct business. Besides, the book brings the reader face-to-face with some of the most intriguing business decisions and decision-makers. As an instance, the book has an interesting story of how Tata Consultancy Services, better known as TCS, came out with its IPO not during the IT boom period but much later in 2004.

The author, Shashank Shah, a thought-leader in the fields of stake-holder centric business strategy, corporate responsibility and sustainability at the Harvard Business School and a prolific writer, has painstakingly decoded the Tata way of doing business. The book is the result of over a decade of rigorous research and interviews with leaders of the Tata group, thereby making it an exceptional blend of a business biography and a management classic.

From the beginning to the end, the book has quite a good number of interesting anecdotes depicting how the veterans of the Tata group, from the founders Jamshetji and Dorabji to JRD and Ratan Tata and the senior executives, have helped build the empire. As these stories provide thought-provoking insights into the thinking /working of Tata concerns, which even today holds good, it is felt that it would be appropriate to narrate a few instances. An interesting case cited by the author is how in 1990 or so when the fight for Bodoland in Assam was at its height, one of Tata Tea’s senior executives, Bolin Bordoloi, was kidnapped by people belonging to the United Liberation Front of Assam (ULFA). Darbari Seth, chairman, stood his ground and refused to pay the ransom money (initially Rs 54 crore, scaled down to Rs 5 lakh) to get him released. He stated that the Tatas’ policy “was not to buy protection but earn it through the company’s goodwill with employees and the local community”. After 11 long months, ULFA released the executive after they accepted the Tatas’ offer to build for their group and Bodoland people in the area a 65-bed super-speciality hospital at a cost of Rs 7 crore! This, according to the author, showed ‘the real strength of the Tatas’ and is ‘a classic case proving their adherence to the unflinching principle of not paying (bribes)’. This is despite the feeling in government circles at that time that the Tatas had adopt such a medical policy to support the militants and thereby ‘buy’ peace!

WISDOM OF J.R.D.

Another story is that of Sudha Murthy (wife of Infosys founder M Narayana Murthy). In the early 1970s, Sudha Murthy, the first female engineer on the Tata Motors shop floor, resigned her job to join her husband, who was setting up Infosys in Pune. After putting in her papers, she met JRD at the entrance of Bombay House (the headquarters of the Tatas in Mumbai). On being told that she had quit, he quipped, “What will you do when you are successful?” She replied that she was not sure if the venture would be a success. To this, JRD remarked, “Never start with diffidence. Always start with confidence.” This anecdote should provide a lot of inspiration and confidence to present-day youngsters who are keen on starting new ventures.

In another case, the author has pointed out how JRD Tata’s business principles and helping-out mentality to needy sections of society are carried out by some of the former Tata employees even after their retirement. A decade ago, a DGM of Tata Motors in Pune went to see one of his retired colleagues who was not keeping well. The DGM advised him that at his advanced age, he should concentrate on giving donations to some temple and take up some social activities. To this, the retired person remarked, much to the astonishment of the DGM, that ‘he had only one God and pointed to the photo of the late JRD hanging in his room’. He said that he preferred to live by the ideals of JRD in all matters, including donating to the needy. He further said that ‘50% of his pension, he spent by distributing to the poor and needy who could not pay for the school fees of their children in his home town in the Konkan’. The author has further added that in Jamshedpur, the steel township built by the Tatas, in many households the picture of JRD is kept along with that of other gods and regularly worshipped!

While emphasizing the growth of Tata companies in its empire, Shashankhas picked out the growth of Tata Consultancy Services, better known as TCS, for a detailed analysis. In a knowledge-centric economy, he says the importance of human wealth (resources) cannot be over-emphasized. The classic example is the growth of TCS in the last few decades. Its growth into a knowledge enterprise can best be attributed to, among others, the company’s substantial investment in human assets as it now has a workforce of nearly 400,000, which by itself gives it a competitive advantage over its peers. This has been achieved through the three Bs— bringing in the right people, building them into ‘skilled people’, and bonding multinational knowledge workers into one close-knit TCS family. This was a herculean task but was achieved only through team effort and the inspiring leadership of its CEO, Fakir Chand Kohli.

TREND-SETTER

In the 50-plus years of its existence TCS has, according to the author, ‘defined the industry practices through the three ‘I’s—Insight, Innovation and Inspiration’. In the ‘70s, the company redefined the image of Indian software programmers, in the ‘80s, it redefined software exports, in the ‘90s, it redefined the quality paradigm in the IT industry, in the noughties, it redefined the global software delivery system, and in the 2010s, it redefined the financial potential of an IT firm and created value for multiple shareholders. Little wonder, for the global IT industry, TCS has become ‘a pioneering and pathbreaking disruptive business model’. In fact, the TCS story began at a time when the present-day global IT leaders like Apple, Accenture, Cisco, Dell, Microsoft and Oracle did not exist. The phenomenal rise was mainly possible due of the imagination and vision of persons like JRD and Kohli as they built from scratch a top-class company in an under-developed economy and made it the world’s second largest IT services company. No wonder, its IPO in August 2004 was oversubscribed 7 times— a big number then – and that too when the primary market was not rosy. TCS wanted to go public only when it attained fame through its services as it felt that that was the surest way it would be remembered by everyone. This is one reason why even today many investors cherish holding shares in the company and do not wish to fully sell their holdings, notwithstanding the price!

SOME MINUSES

Going through this book of the Tata empire, which is spread over 150 countries across the globe, providing employment to some 7 lakh workers, and contributing some $ 100 billion by way of revenue, one can conclude that the author has revisited many crossroads and brought many readers some vivid memories of life-defining moments that would inspire them in their life. He has done well in not merely highlighting the plus points but also the minuses and discusses the same in a separate chapter, ‘Hits and Misses and Lessons’. In this he points out that in the Tatas’ globalization efforts, some have been very successful like Tata Tea acquiring the Tetley brand, but the taking over of Corus Steel and the Taj brand of hotels expanding outside the country have not gone well. But the author adds that “none can deny that the group’s ambition and achievement of transforming a set of Indian companies into a global giant is without parallel in the emerging world”. Some, he says, “even call the Tatas the Asian version of America’s General Electric”. The Tatas’ approach has been consistent throughout – of not making any compromises on its principles. At the heart of the Tatas, ‘the main aim was to ensure that the group could grow without having to chase all opportunities, whether they fit the Tatas values and culture or not.’

Perhaps, at the time of writing in early 2018, the spat between Ratan Tata and Cyrus Mistry, a senior director of Tata Sons, had not become public as the author has not touched upon it. But with Ratan Tata once again in full command over the top management, things seem to have settled down. Nevertheless, it is noteworthy that in this episode also, the question was mainly on ethics of governance, an issue where the Tatas would never compromise.

One can conclude with the quote of Debashis Chatterjee, IIM Director, Kozhikode (Kerala), who says “It is a definitive book on the subject, and a must read for all who wish to build successful businesses with a social conscience.” I am sure none would disagree.

THE TATA GROUP – From Torchbearers to Trailblazers.
By Shashank Shah.
Pub: Penguin Random House India Pvt. Ltd., 7th Floor, Infinity Tower, C Wing, DLF Cyber City, Gurugram,
Pin: 122002,
Haryana.

— V. Raghuraman