The Tata name is associated with best practices, which include being ethical and caring. When it comes to professionalism and governance, this name would come to our lips immediately. A book on this group by Mircea Raianu takes one through a historical journey from British days to contemporary times. The 291 pages include references of around 80 pages, indicating the amount of research that has gone into this rather remarkable book. More importantly, access to the Tata archives was made available to the author, guaranteeing an authorized volume.
Interestingly, this is not a company sponsored book, which often happens when companies get famous writers who might be journalists to write about them where it’s more of praise than criticism. Here it seems like an independent view given by a historian and the tone is set by quotes that give different points of view on the group. There is one from TR Doongaji where he talks about how we can all savor the Tata group in various ways in our daily lives, from morning tea to dinner at one of their hotels. While this sounds good, the interpretation may be that the group is intended for the elites, since we cannot all enter the Taj. There is a quote from Arundhati Roy, who unsurprisingly smirks when he says that we are slaves of the corporate group, as we even eat their salt!
The Tatas started during the British days and have built an empire in various industries and services. It all started with the trade in textiles and opium, which has evolved over the decades into a conglomerate from salt to software. Working with different governments is always a challenge in India as politicians normally expect bribes. Interestingly, the Tatas had differentiated between economic and political swadeshi even during British times to navigate their interests. The difference between how the Tatas and the others have managed is that they have kept the political parties in the mood without any alleged manipulation. So while there is evidence to show that Tatas supported Ms Gandhi during the emergency, it was more for business interests. They even managed to ensure that there was no nationalization of Tata Steel, which was actively on the cards at one point. Dealing with politicians fairly has been the motto of this group, the exception being the recent outburst by Union Minister Piyush Goyal against the group.
While we all know how Jamshedpur developed due to the involvement of the Tatas, the author also explains some of the controversies to us. While there is a story that says you can drink water anywhere in the municipality, there is another that reveals how only the most privileged have benefited, as the slums have been ignored. There is a section on paternalism in the group, which actually reveals that it is not overly human as it has been responsible for reducing the workforce across all streams and relying more on casual work. Starting in 1991, which was the time when India began liberalization, the Tatas also turned around and stopped most benefits for staff, including welfare costs or jobs for family members. Clearly, free markets cannot bear such gifts.
Interestingly, the author notes that when the Tatas acquired Corus in England, it was believed that the group never dwindled and the workforce was secure. Sure there was a buy-in, but as losses mounted, the stance changed. This was also part of the fight between Ratan Tata and Cyrus Mistry, where it was felt that the group cannot use domestic resources to maintain an inefficient workforce abroad. The nation building platform that was associated with the group was used to attack this deal. The author takes us through the rather ugly episode of the open dispute between these two offspring without really taking sides.
At the same time, the contribution of the Tatas to society is quite overwhelming and institutions like TIFR (research), TISS (social sciences and social work), TMH (cancer care) are some well-known endeavors that have made a difference. It began with the participation of the Tatas in the Indian Institute of Sciences.
The Tata model from the point of view of pure capitalism is a powerful story. Building an empire like this is never easy in India. Even though the group lost to the Birlas in setting up companies abroad during the 1960s and 1970s, their long-term collaboration with foreign capital was leveraged in the IT space, with TCS now the leader. From using experiences of ties to the outside world in the pre-independence days to controlling natural resources, the Tatas have carved a niche for themselves in the corporate world.
So how can you summarize your ideas? Trusteeship, democratic socialism, and the liberalization of free markets were some of the driving forces that mingled with the changing market times. The group has moved from nationalism and a state of development to globalization, drawing on all strengths along the way to create this solid superstructure that spans various sectors ranging from food and steel to financial services. A true supermarket, which also never forgets philanthropy and which will be remembered by all the research institutions that have been set up along the way.
Madan Sabnavis is Chief Economist at CARE Ratings
Tata: the global corporation that built Indian capitalism
Harvard University Press
Pp 291, 699 rupees