October 2007 | Dwijendra Tripathi
The defining characteristics of the Tata group were born of the beliefs and qualities inculcated by those who came before, writes Dwijendra Tripathi*
The personality and character of a business enterprise is shaped in its formative years. The image that gets imprinted in this period stays with the enterprise in some form or the other, right through its existence. This is especially true of the Tata group.
There were certain fundamental qualities about the group that had become obvious by the time Jamsetji Tata, its Founder, passed away in 1904. The most prominent of these were a passion for unconventional business ideas, an inclination to pursue innovative business methods and a steadfast adherence to business ethics.
Jamsetji’s breakthrough business venture — the Empress Mills — reflects these three characteristics. He established it in Nagpur in 1877 when every other budding textile entrepreneur was opting for Bombay (now Mumbai) or Ahmedabad. Jamsetji understood the advantages of plumping for Nagpur: a good market in and around the city, reliable and ample supply of water, and abundant raw material.
These three factors, each vital to making a success of his venture, were there for everybody to see, but they escaped the mind of the many businessmen getting into textiles at that juncture. And Jamsetji used the latest available in textile manufacturing machinery to ensure that Empress Mills got started on a sound technological footing.
Jamsetji was a Bombay person and this was a period when no Bombay businessman looked beyond the city for a project of this nature. That’s what I mean when I say this conglomerate was unconventional from its earliest days. The textiles business would eventually go cold for the Tatas, but the solid foundations on which it was built came to personify the group’s approach to industrial expansion.
The most telling example of Jamsetji’s exceptional and original thought process dates back to the 1880s, when he started thinking about manufacturing steel. No sane person in the India of that time could have envisaged such a project, colossal in scale and ambition. It demanded technology that the country did not possess, it needed people with technical proficiency — particularly engineers — again, something we did not have, and it required a mammoth outlay of monetary and other resources. To complicate matters further, the British government was not about to lend Jamsetji a helping hand; prospecting laws were so rigid that they became a barrier no entrepreneur could breach (prospecting rights were only given for a year at a time).
All these negatives aside, it was a far from perfect era to make a quick and clean buck from steel. Jamsetji knew that, but he still thought it wise to persevere with his dream. He understood that even if the steel plant, with its long gestation handicap, became a reality, it would be quite some time before the fledgling made any profits.
The basic source of inspiration that Jamsetji had was much deeper than the simple desire to become rich. Ingrained with this inspiration was another elementary trait — to be fair to every constituent he dealt with, be it employees, customers or instruments of government.
I come back to the three defining characteristics of the Jamsetji era. These characteristics have become a part of the fabric of the Tata group and they continue to reveal themselves to the present day, in some way or the other, in one measure or another.
The Tata group proved, in those embryonic years, that there was nothing lacking for India to make the great leap forward in industrialisation. It proved that we as a country could implement big and novel ideas, that we could think independently and devise problem-solving methods, and that, while doing these, we could be true to ourselves, to the nation and to our society.
By accomplishing what it did, the group delivered hope to business houses and individual entrepreneurs in the country, that they, too, could achieve the seemingly difficult. Others dared to think: if the Tatas could do it, so could they. That was one of the group’s greatest contributions: helping change the mindset of the Indian business community.
It came to such a pass that even its rivals — GD Birla most prominently — began acknowledging that the Tatas had a special place in India and Indian industry. The group itself, at some point along this journey, started believing it was more than just another business enterprise. Advised to shut down Tata Chemicals when the company was going through a particularly rough spell in the early 1940s, then group Chairman JRD Tata reportedly said, “We Tatas rouse expectations when we go somewhere. I’m not prepared to douse those expectations.”
There was, of course, more to the Tata group of the pre-independence period than Jamsetji. Most of the Founder’s ideas were brought to fruition by his son, Dorab Tata, who carried forth the torch that his father had lit. Jamsetji, Dorab and those who followed in their stellar footsteps were always looking beyond monetary gains. They were in the business of trying out fresh ideas, of meeting challenges others had not even considered, of creating something new.
*Dwijendra Tripathi is a well-known business historian and a former professor of the Indian Institute of Management, Ahmedabad