Take any aspect of your life, and you will find a Tata company brand or another. You might travel in cars—Tata Motors manufactures a wide range of them. You might take a flight—Tatas own Vistara Airlines and Air India as well. You might stay at hotels—Tatas own the Taj Hotels. You definitely wear clothes—Tatas have the fashion brand Westside. For your jewellery needs, Tata's Tanishq caters to you. For the tea you drink, Tata Tea. Even the salt that goes into your food is Tata Salt. On top of that, beside a hundred-thousand businesses, not only in transportation but also in all spheres, they own such astonishing Tata Steel, Tata Power, and Tata Consultancy Services. It is hard to believe that there are over 100 firms under the Tata umbrella. Hence today, it is expected that Tata is one the most popular and successful businesses in India amongst people.
But you might not know this company became a huge corporation in a very short space of time. 200 years! That’s right, 200 years! In the following article let’s walk through the intriguing evolution of the earliest business family in India – the Tata dynasty and look into the magic that has made such Tatas.
“The Tata Group first of all has been a builder of many industries in India and even today it is one of the leaders in many of them.” “Other examples include the Tata’s who brought us many firsts, such as the first-ever 8-hour work, first-ever paid leave.”
“I would rather have the assurance that my emphasis on certain values, which we have tried to espouse throughout this period, has been more impactful than say, OH I HAVE INCREASED YOUR COMPANY’s GROWTH MULTIPLE TIMES.”
The Foundations: The Era of Nusserwanji Tata
As already noted, 1822, 200 years ago, is a significant milestone in our history because a boy called Nusserwanji Tata was born in a small village of Gujarat, a Parsi priests’ family. At a very young age, he was ambitious and unable to sit still. He wanted to achieve something remarkable. He was the only one in his native place who had such a compelling desire to journey far away and create something great. And, he did – at 20 years of age, he arrived in Mumbai to set up a commercial enterprise. He was not alone in this – he had a daughter and a son – since child marriages were prevalent during those days. Despite the challenges, he entered the cotton trade and soon ran a successful cotton export business.
Nusserwanji made sure to invest the earnings in his son Jamsetji’s education, providing him with the best available education of the time, which meant a proper English education.
Jamsetji’s Expansion: From Hong Kong to India
Upon reaching adulthood, Jamsetji’s father, Nusserwanji, planned to send him to Hong Kong where he could help in the family business. In this age of globalization, it does not sound shocking to send children for business expansion purposes, however, in the year 1859, when there was no air travel, this was more than a tall order. Despite being only twenty years old, Jamsetji undertook this journey along with his family and opened an office in Hong Kong. Because of his resolve and perseverance, he emerged victorious. Within his 65 years of life span, Jamsetji had worked in over three continents, built many cotton plants, making way for the first steel plant in the country and even pioneered the first ever operational five-star hotel in India, which is the Taj Mahal Palace Hotel located in Mumbai.
Even till his demise in the year 1904, Jamsetji did not stand to lose his empire in business but also stood for the principles and morals that are difficult to find even today.
The Ethics of Jamsetji: Workman's Welfare
Jamsedji went on to build his first cotton mill in Nagpur in the year 1874, but he was confronted with a problem of lazy and absenteeism-prone workers. He did not antagonize the workers, instead, he searched for more permanent and kind solutions. He introduced the General Provident Fund to ensure workers received pensions post-retirement and launched insurance schemes to cover accident-related medical costs. Additionally, he started Family Days and Sports Days to foster community and build a sense of camaraderie among workers. These practices were groundbreaking in the 1800s, when working conditions worldwide were often terrible.
During the American Civil War (1861–1865), when cotton supplies from America to England were disrupted, Jamsetji took advantage of this by doubling the prices of cotton supplied from India. Though this period was highly profitable, the resumption of American cotton supply after the war negatively affected Tata's business. However, Jamsetji’s honesty and commitment to returning investors' money earned their trust, allowing him to continue despite the setbacks.
Dorabji and JRD Tata: Welfare or Wealth
Though many of the grand projects visualized by Jamsetji were actually implemented by his second son, Dorabji Tata. Within a decade by the year 1910, the construction of Tata's steel plant was completed and Tata Steel emerged as the world's greatest supplier of steel during the First World War. To the point that the British tanks were made of such steel, a politician dared claim, “Tata Steel rescued us.”
It was 1914 when the house of Tata Group consisted of 14 companies and that was still the tip of the ice-berg. After Dorabji, the next chapter was initiated by JRD Tata, who became active in 1938. He was an aviator at heart and as a result, was the one who inaugurated the first airline in India, the Tata Airlines which is currently known as Air India.
In 1947, after the country gained independence, the government led by Jawar Lal Nehru took over control of all major industries, including Tata Airlines. JRD Tata, however, was invited to head Air India, which he accepted. Thanks to him, Air India became one of the most esteemed airlines in the world.
During the same period, JRD undertook diversification of the Taj Group and its allied businesses, including the establishment of Tata Motors and TCS. The group although strangled by the likes of Monopolies and the Restrictive Trade Practices Act, grew under the able leadership of JRD.
Sustaining the Turnaround, Ratan Tata: Quest for Globalization
Upon the retirement of JRD Tata, Ratan Tata was appointed the chairperson of the group in 1991. The same year there was economic liberalization in the country, and Ratan Tata took calculative measures to increase the stake of Tata Sons in their subsidiaries, thereby insulating the group from aggressor corporate raids. Under his stewardship, the Tata group ventured into acquiring international businesses stretching from Tetley Tea to Corus Steel and even Jaguar Land Rover.
Ratan Tata's aspirations were not only of building a larger empire across the globe. He had, however, ambitions of bringing the lower. Dies Ratan Tata was even motivated to introduce Tata Nano, the world’s least-priced car, though unfortunately, its marketing casting was not up to the benchmark.
Conclusion: A Legacy Beyond Business
Tata's constructive citizenship is to an extent that I cannot express in words and amazes everyone. They built some of the best research institutions such as the Indian Institute of Science and some of these were ventures that did not even bear the Tata name. Their heritage has been one of value, economic progression and patriotism for the past 200 years and it is a value system that shall majority probably for the next two centuries.
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Reference:
- Lala, R.M. The Evolution of Wealth: The Tatas from the 19th to the 21st Century. Penguin Books, 2004.
- Piramal, Gita. Business Maharajas. Penguin India, 1996.
- Srinivasan, N. S. The House of Tata: Sixty Years of Industrial Development in India. Cengage Learning, 2008.
- Kamath, M. V. Tata: The Evolution of a Corporate Brand. Viking Penguin, 1991.
- Tata Group Website. https://www.tata.com (company profile and latest activities).