The Romance of Tata steel
The Free Press Journal — August 26, 2007

The hand of history has woven the tapestry of the Tatas. Just over a hundred years ago, Jamshedji Tata requested the secretary of state for India, Lord George Hamilton, for the corporation of the British Raj in starting India's first steel works. On the hundredth anniversary of the registration of Tata Iron and Steel Company, the company won the bid to purchase the Anglo Dutch steel giant, Corus, and so a wheel has turned a full circle.

RM Lala has traced a hundred years, and more, of the exciting history of Tata Steel, from men searching for iron ore and cooking coal in jungle areas, traversing in bullock carts before the site was found, to the company's modern status as a world class company. He brings to life a seldom-voiced account of the courage, vision and the commitment of the men who created India's first modern industrial venture, which was to be the fountainhead of its industrial growth.

For over a hundred years Tata Steel has promoted a culture of philanthropy, perhaps unequalled in the corporate world. Tata Steel's history is both colourful and eventful. The company's fortunes have, in many ways, been woven into a fabric of the last decades of the colonial Raj and the development of a new, independent India.

"Russi (Lala) has captured the touch-and-feel of events in Tata Steel from its early days; its role in war effort, its contribution to the economy's development in the early days of India's Independence and its more recent transformation into a vibrant, modern steel plant recognised internationally as one of the world's cost-effective steel manufacturers. He also brings to life the human side of the company in a very readable and cogent manner. He has captured how the strength of the company is embodied in the spirit of its people and their unbelievable will to win," says Ratan Tata in the foreword to 'The Romance of Tata Steel', written by RM Lala and published by Penguin Viking to commemorate the centenary.

It's not important how long a man lives, but how well. It is the same for a company. It is not a centenary of existence that is of prime importance about Tata Steel, nor its tonnage, nor its high quality of steel. Many can excel in tonnage and equal it in quality. Its romance lies in its birth — the vision of a man of a subjugated and primarily agricultural country, who envisioned setting up a steel plant to spearhead the industrialisation of his country. His desire as a true patriot and visionary was to make India an advanced and industrialised power in the realm of nations. The romance lies in the dedication of other men who understood his vision and worked to see it fructify against great odds. Dedicated men exploring through jungles for iron ore, making their way in bullock carts and foot, and in the process even having to brew their tea in soda water.

Over these hundred years it struggled at times stumbled in its labour relations in the early years, but it learnt from this. Its labour relations are unique and participative. The company gave unprecedented facilities to its workers, rooted in the practice of Tata's first enterprise, the Empress Mills. The late Jamesedji said, "We do not claim to be more unselfish, more generous and more philanthropic than other people. But we think we started on sound and straightforward business principles, considering the interests of the shareholders our own, and the health and welfare of the employees the sure foundation of our prosperity. The social benefits were further advanced and improved in TISCO's case by getting inputs from two well known socialists, Sydney and Beatrice Webb, who were invited from England after the First World War."

JRD Tata, Chairman of Tata Steel for forty-six years, set out his own guiding principles, one of which was: "Nothing is worth attempting that will not profit the nation." And in that pursuit he laid down certain ethical standards which four successive Chairmen of Tata Steel have upheld. Ratan N Tata, in his epilogue to 'The Creation of Wealth' (also authored by RM Lala), said that he has tried to maintain the business tradition of the Tatas and expressed the hope that "amidst fast-eroding values, it will continue to stand out as a well integrated, growth-oriented group that marked leadership, operating with higher levels of integrity and a great value system and uncompromising goals to achieve results without partaking in corruption, bribery and political influence."

The sheer scale of the growth of the Tatas, from a small trading firm in the late nineteenth century to an industrial behemoth, which embraced such diverse areas of activity and products as iron and steel, energy, chemicals, higher education, scientific research, automobiles, hospitality, cosmetics, tea, software development and consultancy, and textiles, coupled with a dazzling record of genuine philanthropy, is awesome by any standards.

That all was achieved without ever departing from a firm and unshakable commitment to what would be today called corporate social responsibility, makes it all the more impressive. In 1969, after TISCO had done it all for Jamshedpur and the workers there and in the far-flung mines and collieries, the then chairman, JRD Tata, said that industry should care for the surrounding areas. The community gained substantially and Tata Steel, along with some other companies, amended its Articles of Association, with the shareholders permission, to go beyond the immediate interests of the company and its staff.

The labour relations it was so proud of could have faced serious strain in the 1990s when, to survive, it had to drastically reduce its 78,000-strong labour force. It was down to 54,000 in 2000 and in 2006 it stood at 38,000. Few companies could have survived such a measure. Not everybody is aware that in the 1990s, Tata Steel, according to a respected international consultant, was heading for possible extinction, struggling as it was with outdated machinery and with government-controlled prices. At that time the prime minister had called a meeting of the heads big companies suggesting they give one percent of profit after tax to social work.

Calculations revealed that even in its years of low profit, Tata Steel had spent a higher percentage on social welfare than expected. The figures ranged from 4 to 13 percent in its most difficult year of poor profits. The company was created to produce steel, but guided by the vision of its founders, unknowingly step by step, it was evolving for India the model of a new industrial culture. In the growing circle of management colleges like the Indian Institute of Management (IIM), there are more case studies from Tata Steel than any other company: twenty-one in all till date.

The romance that began 100 years ago has not quite ended. As the company is modernised to be a world-class company it is moving beyond India's boundaries for new ventures. 'Grow old along with me... The best is yet to be' seems to be its mantra!