In 1939 the group included
fourteen companies with sales of Rs 280 crore (Rs 2.80 billion); in 1993, the
year of his death, sales were Rs 15,000 crore (Rs 150 billion) contributed by
over fifty large manufacturing companies, besides innumerable holding,
investment, subsidiaries and associate concerns, making it India's biggest
business group.
Diversification
During the last half of the
twentieth century Tata entered several new businesses, many of them
unconventional, and produced a vast range of products -- from airlines to
hotels, trucks to locomotives, soda ash and other heavy chemicals to
pharmaceuticals and financial services, tea and air conditioning to lipsticks
and cologne.
The group seemed to make
everything and do everything. One of Tata's earliest achievements was to cajole
ten rival cement companies to merge and form the Associated Cement Companies,
run by the Tatas.
JRD strengthened existing businesses
such as steel, power and hotels. At the same time, the group lost interest in
some of its older core businesses.
Against
all odds
His achievements have to be
seen through the lens of India's economic and political history. Under British
colonial rule until 1947, India was strait-jacketed by a foreign exchange
crunch for almost forty years after independence, which gravely limited
industrial entrepreneurship.
From 1964 to 1991 severe
government controls on big business further curbed the growth of the Tata
Group.Analysing his own
performance, JRD Tata insisted that his only real contribution to the group's
smorgasbord of companies was Air-India. For the rest, he generously gave credit
to his executives.
The leader
and the motivator
Leadership, according to
JRD meant motivating others. 'As chairman, my main responsibility is to inspire
respect.' Sometimes referred to as
the 'chairmen's chairman,' JRD adopted a management by consensus style: 'When a
number of persons are involved I am definitely a consensus man,' he once said,
adding: 'but that does not mean that I do not disagree or that I do not express
my views. Basically it is a question of having to deal with individual men
heading different enterprises. You have to adapt yourself to their ways and
deal accordingly and draw out the best in each man. If I have any merit it is
getting on with individuals according to their ways and characteristics. In
fifty years I have dealt with a hundred top directors and I have got on with
all of them. At times it involves suppressing yourself. It is painful but
necessary. To be a leader you have got to lead human beings with affection.'
Professionalism
JRD's respect for his
managers bound the group. 'I am a firm believer that the disintegration of the
Tata Group is impossible,' he once declared. Most business groups have
disintegrated or drifted apart because of family ownership and management, with
rival family members wanting to go their own way. In contrast, the Tata Group
companies are run by professionals who firmly believe in the trusteeship
concept laid down by J N Tata as also by Mahatma Gandhi. A university dropout, JRD
was something of a self-taught technocrat, and died long before the phrase 'war
for talent' was coined. Yet, almost every senior Tata director from the 1930s
onwards held a degree from a foreign university. Tata willingly financed bright
young boys who wanted to go abroad for further education.
Quality
first
According to JRD, quality
had to match innovation. He intensely disliked the laid-back Indian attitude,
and much of his fabled short temper was triggered by the carelessness of
others. He stressed: 'If you want excellence, you must aim at perfection. I
know that aiming at perfection has its drawbacks. It makes you go into detail
that you can avoid. It takes a lot of energy out of you but that's the only way
you finally actually achieve excellence. So in that sense, being finicky is
essential. A company, which uses the name Tata, shares a tradition. The symbol
'T' has to be a symbol of quality.'The achievements of the
Tata Group would not have been possible without the support of its workforce.
Before JRD took over, the labour situation at key Tata plants was frequently
tense despite the fact that management had poured millions into subsidized housing for workers, offered free medical and hospital treatment, as well as
free education and was miles ahead of government legislation in terms of labor practices.
A benign
boss
According to Tata, the crux
of any successful labor policy lay in making workers feel wanted. One of the
inherent drawbacks of modern industry with its large and concentrated labor forces was that each man felt 'that instead of being a valued member of a
friendly and human organisation, he was a mere cog in a soulless machine.'' Because of this, a
worker's attitude towards management becomes one of indifference, mistrust and
coldness often tinged with hostility. He is easily led to feeling himself the
victim of callous and unfair treatment and little is needed to make him look
upon his employers as his enemies and break out into open conflict.'
Tata Steel became one of
the earliest companies in India to have a dedicated human resources department.
Expressing surprise that the company had functioned for so long without one,
Tata commented: 'If our operations required the employment of, say, 30,000
machine tools, we would undoubtedly have a special staff or department to look after
them, to keep them in repair, replace them when necessary, maintain their
efficiency, protect them from damage, etc.'
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