One hundred years have passed since Jamsetji Nusserwanji Tata left this world. Much water has flown down the business stream, and India has produced a host of outstanding entrepreneurs and industrial leaders during this long interregnum. And, yet, Jamsetji continues to occupy a unique, unrivalled position in the annals of Indian business. There never has been even a mild challenge to his supremacy. None is in sight, either.
What is the secret here? I can think of three reasons, all interlinked. First, Jamsetji conceived business ideas and plans that seemed impossible of accomplishment to his contemporaries. The moving force behind his projects was the desire to advance the industrial frontiers of India, not to earn mere profits. Second, in his choice of business structures and strategies he demonstrated a remarkable degree of originality that often ran counter to the prevailing wisdom. Third, his concern for values, ethics, and responsible corporate citizenship was no less than for quantifiable returns on investments.
It requires no great insight into the industrial history of India to realise that to think of launching steel production in India in the late nineteenth century was, on the face of it, foolhardy. Historical precedence, prevailing prospecting laws, the state of technological competence in the country, the colossal financial requirement, and the indifferent, if not downright hostile, attitude of the colonial government all militated against the idea. And no one could have imagined that steel manufacturing, even if somehow mounted, would yield substantial profits in the foreseeable future.
Despite all this, Jamsetji pursued his steel goal with the determination of a man almost possessed, driven by nothing but a long-term vision for his country. A similar vision led him to his hydroelectric ventures. The constraints in launching power generation were, admittedly, much less daunting, but no one could have visualised high or even quick returns accruing from the undertaking when it was conceived. Even in his textile projects, the favourite with his contemporaries, Jamsetji exhibited an uncommon sense of risk taking when he decided to set up his Empress Mills at Nagpur, which had logistical advantages over Bombay, the favoured location for cotton mills then. Reacting to his Nagpur plans, a Marwadi financer likened the Empress Mills investment to "taking out earth and putting gold in the ground". The results, however, disproved all pessimists.
Jamsetji's managerial style was equally unconventional. At a time when practically every industrial firm in India was organised as a managing agency concern under tight family control, he tried to introduce a more liberal system of management in Empress Mills, centred on a managing director and a board (akin to the British pattern). That this proved too radical a move, forcing him to fall back upon the prevailing Indian structure, does not detract from the value of his experimentation. In fact, through a wide delegation of powers to his managers Jamsetji took much of the sting out of the regressive features of the managing agency system.
Jamsetji also introduced a series of employee welfare measures in his companies, much before such measures were made statutory for all Indian enterprises. The concept of human resource development was unheard of then. His decision to introduce ring spindles in place of mule — the spinning technology preferred in general by British as well as Indian cotton manufacturers — and charge managing agency commission on profit instead of production, rejecting the common practice, were other innovations that must be considered revolutionary for the times.
The last quarter of the nineteenth century, when Jamsetji's business career was at its prime, was an era of mounting criticism against the misuse of power and privilege by Indian managing agents. A series of newspaper articles appeared in Bombay and Ahmedabad bemoaning the behaviour of the captains of Indian industry. But not a single word of criticism was written or spoken about the Tatas' conduct or style.
As for Jamsetji's corporate citizenship, suffice it to say that even though he contributed to charity and religious causes, it was education that he looked upon as the most deserving field for corporate support. Here, too, instead of tinkering at the fringes of the system, he sought to strengthen the infrastructure required for developing the human resource that the material progress of the country demanded. The Indian Institute of Science, set up on his initiative and with his substantial monetary contribution, will always remain a lasting symbol of Jamsetji's concern for developing India's technical resources. The kind of industries he promoted required technologists and scientists. His support for scientific and technical education, thus, may be seen as an exercise in what is today referred to as 'strategic philanthropy'.
Jamsetji's approaches to business ideas, strategies and ethics set the pattern for the business behaviour of the House of Tatas, and his legacy has continued to influence subsequent generations of its leaders. Except during the brief interlude of the First World War, when the Tatas, like most other business groups in the country, were swayed by short-term consideration of quick profits, they have conceived and implemented gigantic capital-intensive projects: air transport, heavy chemicals, transport vehicles, etc. These were necessary for India's economic rejuvenation.
Developing passenger cars indigenously, instead of through the soft collaborative route preferred by other Indian car manufacturers, is the latest example of the Tata Group's unconventional response to business opportunities. As for managerial structure, the vast Tata empire is so decentralised that a prominent Tata executive once likened it to a commonwealth. And, in terms of business ethics and values, no business house has ever stood higher in the popular imagination than the Tatas.
The Tata Group, thus, continues to feel the presence of Jamsetji Tata even today. It has been said that giants like him are not easily duplicated. It can be added that his kind never die.
Dwijendra Tripathi was a professor of business history at the Indian Institute of Management, Ahmedabad, for almost three decades. He is the author of several books on India's business history and is the founder editor of The Journal of Entrepreneurship.