THE GREATEST COMPANY IN THE WORLD?
The Story of Tata
Peter Casey
Penguin; 228 + XX pages; Rs 599
Peter Casey, founder and executive chairman of Claddagh Resources, came to know of the Tata group quite by chance. As the head of the global recruitment and executive search company, Mr Casey learnt from a director of one of his clients that he was joining the Tata group. The name barely rang a bell. That was in 1999. In subsequent years, Mr Casey learnt more about the Tatas and even became the group's headhunter for top positions in its overseas operations. So fascinated was he by the Tatas' corporate philosophy that he decided to write a 15-page note on the group that he believed would help him in his job as a recruiter. But soon, what was supposed to be a summary expanded over time and acquired the length of a book.
If Mr Casey's account of why the Tatas are the greatest company in the world appears to be an uncritical recounting of all the good things that the group has achieved in the last several decades, blame the genesis of the book. Nothing more could be realistically expected from a book that was conceived in that manner even though its author happened to be a globally acclaimed headhunter and was named by Irish America magazine as one of the leading Irish-American businessmen for 2007 with business interests in Australia and Ireland.
Yet a reader of this book would benefit from Mr Casey's assessment of the central business philosophy that continues to drive the Tata group. Two-thirds of the Tata group, consisting of over 130 companies, is owned by philanthropic trusts, but that does not dilute its belief in making each of its ventures profitable and in promoting professional management of all its enterprises. The Tata family has a very small shareholding and the owners of the group including other shareholders are only one of the four stakeholders the Tata group sets out to serve, Mr Casey argues. It is the fourth stakeholder that makes the Tata group different. Apart from the owners, employees and customers, there is the society in which the group operates. And the goal that the group seeks to achieve for the fourth stakeholder is to follow the highest ethical standards and the best business practices.
Mr Casey is struck by the fact that most senior Tata managers do not live in "sprawling mansions as so many American and European CEOs do, but in modest apartments and homes". He recounts his experience of having spotted Ratan Tata in an Indica (a mid-segment passenger car produced by Tata Motors) on a Mumbai street. Lack of ostentation in the way Tata CEOs live, however, is not a virtue that has been consistently followed by all. There have been many aberrations to what Mr Casey believes to be the norm for the Tata group CEOs and it is puzzling why his research did not throw up such instances to present a more realistic picture of the evolution of the Tata group.
A simplistic approach to analysing the Tata group's evolution and growth over the decades is also noticeable in the way Mr Casey summarises Jamsetji Tata's vision of building an industrial India. Jamsetji Tata had three broad goals - to build an iron and steel plant, set up a hydroelectric power unit and to establish a world-class science institute in India. The recounting of Jamsetji Tata's many contributions to the growth of India and the Tata group is an easy read, but falls short of capturing the complex challenges he faced and overcame. Even J R D Tata's troubled relations with the Jawaharlal Nehru-led government that moved in swiftly to nationalise his favourite airline have been presented without the internal turmoil and tussle that this decision had caused.
That simplicity of approach is noticeable also in the way Ratan Tata's tenure in the 1990s and the first decade of the 21st century is analysed by Mr Casey. There is no trace of the initial struggle and the challenge Ratan Tata faced in rescuing the Tata group from the stranglehold of many satraps of the group, which were the legacy of his predecessor. He dwells at length on how the code of conduct and the ownership pattern changes were enforced by him to create greater cohesion among the group companies, but ignores the resistance to his move to enforce the brand use fees.
Ratan Tata's management of the crisis caused by Tata Finance's financial irregularities has justifiably come in for praise for the manner in which all disclosures were made and the group was made to bear the burden of the losses on account of the financial misdemeanour by one of its senior executives. There is also a gripping account of the Tata philosophy that drove the employees of the Indian Hotels Company, who showed exemplary courage and commitment to protect the guests from the terrorists who had laid siege of the Mumbai hotel in 2008.
In spite of all this, the troubling thought that the reader encounters is that there is very little in this book about what could be considered problematic with the Tata group. The problems with the Nano car project and later the failure of the car, for instance, are simply overlooked. All this makes you wonder why the book was published at all. Or perhaps that could be attributed to the writer, who seems keener to present a rosy account of the group and finally express the hope that the current chairman, Cyrus Mistry, someday visits his homeland, Ireland, and sets up a new project there.
To sum up, the book says more about the author and less about the Tatas.
