Review of Creation of Wealth

CSR Perspective

Introduction to the book• An account of industrialization lead by

TATA• Insights TATA Philanthropy: Vision and

Compassion• Divided into 2 Sections:

• Era of 1874 to 1991• The Spirit of Adventure• Ripple Effects• Facts

• Liberalization Era 1992-2003

TATA Group Snapshot

TATA Group Purpose

The Man and His Vision

When you have to give the lead in action, in ideas – a lead which does not fit in with the very climate of opinion, that is true courage, physical or mental or spiritual, call it what you like, and it is this type of courage and vision that Jamsetji Tata showed.

- Jawaharlal Nehru

TATA - Highlights

Book Review

Empress Mill & Care for Workers• First humidifiers and fire-sprinklers• Institution of Pension Fund• Award of Accident Compensation• Water Filtration Plant & Sanitary Hutments• Apprenticeship for graduates

Dream about Steel CityBe sure to lay wide streets planted with shady trees, every other of a quick growing variety. Be sure that there is plenty of space for lawns and gardens. Reserve large areas for football, hockey and parks. Earmark areas for Hindu temples, Mohammedan mosques and Christian churches.

We are constantly accused by people of wasting money in the town of Jamshedpur housing, sanitation, roads, hospitals and on welfare………

Impulse of Learning

What advances a nation or community is not so much to prop up its weakest and most helpless members as to lift up the best and the most gifted so as to make them of greatest service to the nation.

- Jamsetji Tata

Impulse of Learning• One out of every 5 Indian ICS was a Tata

Scholar• Sets aside half of his wealth for

establishing university• Amounts to Rs 10 crore of 2002

• Indian Institute of Science established in 1911

• Venture of Tatas, Govt of India & Govt of Mysore

• ISC’s contribution to India• Central Food & Tech Research Inst• National Aeronautical Lab• Dr C V Raman• Dr Homi Bhabha

Wings for a Nation• TATA Airlines in 1932• Carried Mail on Route Karachi-Bombay-

Madras• 1937 Bombay-Delhi Air Service• 1946 – Tata Airlines goes public and

becomes AirIndia Ltd• Air India International – Venture b/w Tata &

Govt.• 1953 – Nationalization of Airlines; JRD

Chairman• Some criticized - JRD gives more time to

Air India

The Cult of Excellence• TATA Engineering and Locomotive

Company• 100 locomotives; 98% indigenous parts• TELCO produces Commercial Vehicles• 99.8% indigenous parts• Trained around 1500 ancillary suppliers

“Profits should come from productivity and not by raising prices in a favorable market. Our greatest asset is customer satisfaction.” – Director, Telco

The Cult of Excellence

“We did not have to create a lake to produce a tree. But we did.” – JRD Tata

• Telco plants trees before building workshops• Created artificial lake for the trees• Not building factories but building nation

Cup of Awakening• Tata Tea only private company to preserve

National Park• Tata’s unique welfare system

• 14000 houses electrified• Free Medical Care for Employee Family• Free Veterinary Aid for cattle• Small Hospitals in estates – Liquor a

scourge• Smokeless Chullas• Health exhibitions and Baby Shows

Treasures from the Sea• Tata Chemicals came into existence in

1939• Tata Chemicals learn production of soda

ash – indigenous learning• Adopts surrounding areas to provide

adequate supply of water in scanty rains

Ripple Effects: On Industry• Highly Concentrated Technical &

Management Prg• Forefront of apprentice training• Management Training Center – 100

courses a year• Tata Management Training Center, Pune• Government Training Center in Singapore• TCS, Tata Electric trains employees of

competitors

“If you want to plan for a year, plant corn; if you want to plan for 30 years, plant a tree; but if you want to plan for 100 years, plant men.” – Chinese Proverb

Ripple Effects: On Employee Welfare

Joint Consultative

Council

Joint Works Council

Joint Dept Council

COUNCIL SYSTEM

1. Each council had equal management and employee representation.

2. Joint decision on labor and industrial problems

When nationalization was proposed, the Tata Worker’s Union passed a resolution against nationalization.

Ripple Effects: On Social Services• Employs welfare consultant to plan social

services• Social, Medical & Co-operative services• Tackling Money Lenders• Essential Commodities at cheaper rate• Primary Schools, Sports Clubs, Canteens• Welfare of Employee’s family

Tata Steel is the first Indian company to have a social audit of its activities.

Ripple Effects: On Social Services• Urban Community Development Program

1958• 12 community centers• Mothers learn sewing, stitching, handicrafts• Women Adult Literacy Classes• Jamshedpur’s School of Hope

In 1970 major Tata Companies incorporated into their MoA and AoA a clause on their social obligations to consumers, employees, shareholders, society and the local community

Ripple Effects: On Social Services• Tata Steel’s Rural Development Society

• Assists a total of 276 neighborhood villages• Training in craft and agriculture• Cane Weaving – 250 employed ;

Investment Rs 18000

E.F Schumacher, author of Small is Beautiful, would have rejoiced to see so many people

so gainfully with such little investment

Beyond Business – Tata Scholar

“Though I can afford to give, I prefer to lend.”- Jamsetji

• 1924, one out of 5 ICS Officials was a Tata Scholar• J C Coyaji – Chief Justice of High Court• B N Rao – Judge International High Court,

Hague• Dr Jivraj N Mehta – CM of Gujarat• K R Narayanan

Beyond Business – Universal Trusts• Sir Ratan Tata Dept LSE, (Dept of Social

Sciences)• Tata Institute of Social Sciences• Tata Institute of Fundamental Research• Tata Memorial Center for Cancer Research • Tata Energy Research Institute

At a time, when most charities were communal in nature, Sir Ratan Tata Trust and Sir Dorabji Trust set precedent of universal trusts.

Beyond Business – End of Menace• Small Pox Epidemic hits Chotanagpur div

in Bihar• Small Pox Eradication Campaign by WHO

• Phase I• 400 outbreaks discovered in a fortnight• Convincing Adivasis

• Phase II• 6 months long operations• 82 towns & 20,500 villages• 10 lakhs saved of 53 lakhs allocated

• Phase III

Beyond Business – Creating new Industrial Culture• 1911 Eight hour work culture

• Western Countries followed 11-12 hours culture

• 1930 Profit Sharing Scheme• 1940 Personnel Department Planned• 1950 Three Tier System• AoA and MoA incorporate social

obligations• Managing Agents Commission on profit not

on loss

Firsts by TATA• First Cement Manufacturing – India

Cements• TATA Industrial Bank > Central Bank of

India• New India Insurance started in 1919• Tomco – Pioneers in employing women• Tomco – First Ever Soap Making company

Corporation with Conscience

“Did you ever expect a corporation to have a conscience when it had no soul to be damned and no body to be kicked?”

TATA answered – “YES”

Questions & Answers

Presented By:Pradeep Mathew