R. Gopalakrishnan

Tatas
For upwards of 25 generations, the names of the Tata family’s ancestors have been inscribed side by side with others upon the priestly rolls. Frank Harris, the biographer of Jamsetji Tata, writes that 14 generations ago one of the ancestors took the name of ‘Tata’ conjectured to denote ‘hot tempered’.

Into this genealogy was born Jamsetji Tata in 1839, 12 years before William Lever. As early as 1892, long before the establishment of the Rockefeller and Carnegie trusts, Jamsetji established the J. N. Tata Endowment Scheme to provide higher education for deserving Indians. Since then 3,500 Tata scholarships have been awarded, including to the likes of President K. R. Narayanan and Dr Raja Ramanna. Before the dawn of the twentieth century, Jamsetji had already introduced accident compensation for his textile workers, something then unheard of.

Indeed, J.R.D. Tata was very conscious that the social responsibility of his companies should not be left to individuals; he believed that it should be institutionalised. Therefore, in the 1970s, the Articles of Association of the major Tata companies were formally amended to read that the "company shall be mindful of its social and moral responsibilities to consumers, employees, shareholders, society and the local community". Companies commit themselves to their social expenditure in their business plans. In the last three years, when business conditions have been difficult, this has doubled: from Rs 67 crore in 1997-98 to Rs 136 crore in 1999-00.

The group institutionalised its social responsibility charter further when it included a clause on this in its ‘Code of Conduct’, by which companies have to actively assist in improving the quality of life in the communities in which they operate. The code was introduced recently and all group companies have signed it. In recent years, the feeling grew that the scattered community work done by Tata companies would be more effective if the various initiatives were brought together. The Tata Council for Community Initiatives was created to give the group’s community activities greater focus and cohesion.

Yet another institution is the Tata Relief Committee and its standing groups of volunteers for disaster relief, which operate out of Jamshedpur and Mumbai. There are heroic stories about the work done by these volunteers for the victims of the Koyna earthquake, the 1999 Orissa cyclone and, more recently, for the victims of the Bhuj earthquake.

Literacy
Social responsibility is not just about coming to the aid of those hit by disaster; it is about engaging with and solving society’s most pressing current problems, like, for instance, illiteracy. Two years back some of the finest minds in Tata Consultancy Services, led by the redoubtable F.C. Kohli, applied their minds to the issue of how they could leverage technology to make a dent in the problem of illiteracy. (See 'Using technology to banish illiteracy'.)

The problem was that while literacy was growing at the rate of 1 per cent per annum, the population was growing at the rate of 2 per cent. Even if the rate of growth of both indices remained constant, total literacy would remain a distant dream. However, if the literacy growth rate could, by some miracle, be stepped up ten times, then the backlog of illiteracy could be wiped out within our lifetime.

The National Literacy Mission, the Tata Consultancy team recognised, had done very good work but it was doing two things that could perhaps be improved. It was insisting on teaching the illiterate how to write — and we all know how much more daunting writing is when compared with reading and speaking — and it was going from alphabets to words, which is how we are all taught at school. After six months of study, the team came out with a package that would go from words to alphabets and would make adults functionally literate (being able to read newspapers, shop signs, bus numbers, etc) through a computer-aided programme of 30-45 hours of learning.

This programme is currently being implemented in some 40 villages in Andhra Pradesh’s Guntur district. The package has now also been taken by the Madhya Pradesh government, which intends to adapt it in over 600 centres from July onwards. A television version of the lessons has been created, with the help of Siticable, which is being telecast every night for one hour in Guntur district. It’s been found that the television version works just as well as the computer version. Some NRIs have been so inspired by the programme that they have committed themselves to financing 200,000 machines every year for it.

The stuff of longevity
Of the profits made by the Tata Group, about a fifth is attributable to the trusts, if one calculates the profit streams and shareholdings. All of this, of course, is not received in cash by the trusts; they only receive the dividends declared. This attribution symbolises what J.R. D. Tata said about the cycle being complete; that what comes from the people goes back to the people many times over. It epitomises what Jayaprakash Narayan said about how Gandhiji’s concept of trusteeship has received a much-needed fillip in Tatas.

It illustrates the spirit of what British economist Alfred Marshall wrote: "A score of Tatas might do more for India than any government, British or indigenous, can accomplish." And there is the Leverhulme Trust, which holds about a sixth of the British part of Unilever and, worth billions of pounds, ranks in the top ten in Europe in terms of expenditure.

So that is the story of Unilever and Tata, two organisations I have known intimately. Their founders lived and established their businesses at about the same time. They espoused similar values about the purpose of business. The two institutions, over 125 years old now, have probably exceeded their founders’ expectations by a huge margin. Both have professionalised management to achieve what historian W. J. Reader calls ‘the stuff of longevity’. And each one has done it in its own special way.

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An abridged version of this article appeared in the September 1, 2001, issue of The Economic Times.

Uploaded in September 2001