Tata Group: India’s Largest Conglomerate Founded by a Visionary Traveler
Tata group of companies, it is said that there is Tata in every Indian’s life directly or indirectly. Tata group of companies is India’s largest conglomerate. Tata group is made up of 90 operating companies in seven different industries which makes it India’s largest conglomerate. Tata group was founded by Jamsetji Tata in 1868. The founder of the Tata group was a visionary who was a traveler and loved travelling around the world. Jamsetji Tata was born in a small town of Navsari in Gujarat India.
In his early working life, he worked with his dad in his banking firm. He wanted to start a new business, and he did start a trading company while working with his father in his banking firm. Then in he established a textile mill which he named as empress mill as a smart move to avoid any British opposition. This was the first stem to the huge Tata group which it is today. Jamsetji Tata was a traveler and brought many ideas about business in his travel.
He saw new things and technology used in other countries in his travel he brought those things and new ideas home and employed them in his company and helped the country in the path of industrialization. Jamsetji Tata created trust and one of these trusts today holds the majority of the shares in the Tata group of companies. Jamsetji Tata’s one of the dream, was to construct a hotel which was the best in India and has to be the most luxuries in India. The Taj Mahal Hotel was the first building in Bombay to use electricity.
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Jamsetji wanted to build the best hotel in India after he was denied entry in one of the hotels in Bombay because he was Indian. The hotel which was completed, in 1904 was one of the great marvels of Tata group in Jamsetji Tata’s life time (Tata Group, n. d. ). The next big thing which happened in, the progress of the Tata Group was the establishment of iron and steel plant which was the first iron and steel plant in India. It was a challenge to start an iron and steel plant in India as there was an ever present pressure from the British raj.
However, Sir Dorab Tata made it the reality when he started the steel plant near Jamshedpur. The new company was called Tata steel, which is the 10th largest steel manufacturer in the world currently. The company was established a century ago by Sir Dorab Tata in 1907. Sir Dorab Tata was also established first hydroelectric power plant which was the beginning of Tata power. Tata power is India’s largest private sector power generating company. One of the best companies in the Tata group ware established in the life time of Sir Dorab Tata.
The founders of Tata group where not only the business men but also nationalist. In 1911 after seven years, after the death of Jamsetji Tata the first science instate was established in Bangalore. Where the bright brains of India can cultivate their aspirations in science, and technology. Tata’s ware fully aware of their corporate social responsibility towards society, and their country as whole (Tata group, n. d. ). The institute established by the Tata’s is today’s premier research and development institute which is in Bangalore.
In its 375 acres campus, the Indian Institute of science hosts 40 departments and centers of various fields of science. Institute constantly performs research and development of cutting edge science in association with space research organization and defense research organization. Tata institute of fundamental research is one of the best research institute in the country. There are many such institutes which where the vision of the founders of Tata group, which are serving the country and society as a whole.
Tata Group is also known for employee satisfaction. Tatas ware first to introduce the 8 hour working day in 1912 long before it was introduced in the western countries, they were first to introduce the provident funds which is a kind of savings account in which a certain percentage of pay is deducted, and deposited in the account, and the same percentage of the amount is matched by the employee, and deposited in same provident fund account, this was a kind of social security which was way ahead of its time.
Provident fund was made compulsory by the Indian government for every company after 1952. Tata group in their process of employee satisfaction has constructed cities. Jamshedpur is very good example of the fastest growing and developing city in the country, is founded by the Tata group, to provide housing facility for the workers working in countries first steel plants, and it is named after the founder of Tata group Jamsetji Tata. With the death, of Sir Dorab Tata In 1932 Tata group lost its one of the great leaders. Sir Nowroji Tata became the chairmen of the group.
By this time, Tata Group was in many business and industries. However, Sir Nowroji Tata died in 1038, and the responsibility of the company was on young 34 year old JDR Tata. JDR Tata came with new ideas, to further expanded the company. JRD Tata was the first in the country to get a commercial pilot’s license. He was the one who took the Indian in to the aviation age the first commercial aviation company was established by JDR Tata. The Tata Airlines was the first airlines of India which is still the largest airlines in the country.
However, the Tata airlines was nationalized and is now known as Indian Airlines after the government of India took over the company from Tata group and regulated the aviation market and was the only airlines in the country for a long time. JDR Tata was the chair man of Tata Group for fifty three years and during his leadership Tata Group expanded in new industries. Under JRD Tata’s leadership, the company from independence to 1990 despite stringent regulations and license raj was able to grow constantly and was able to start their business in new areas. Tata started Tata Chemicals in the year 1939.
Tata Motors and Tata Industries in 1945, Voltas in 1954 which is manufacturing home appliance, Tata tea, which is one of the largest tea company of the world was established under his leader ship, Tata Consultancy Services (TCS) India’s largest Information Technology company by market capitalization was established in the year 1968, and the Titan Industries in the year 1984 (Tata group, n. d. ). JDR Tata steep down from the position of being chair man of that group in 1991. Ratan N. Tata took over the position as the chair person of the company and still a chair person of the company.
Ratan Tata became the chair person in the mist of new economic reforms in the country where government removed many restrictions. The Indian government lifted many regulations to do business and started the end of the license raj. New entry of international origination gave competition in many industries to the Tata group. Tata group had new arena to do business in this newly freed market. Tata Group, one of the old and strong business groups whose business has seen many rough time the company in 1990 at last able to operate in a free market where it can perform to its full potential.
Tata group was started as a modest trading company by the founder Jamsetji Tata is now one of India’s Biggest Company. Tata Group consists of 90 operating company which consists of communication, Information technology, chemicals, consumer products, engineering, materials, and many more industries (Tata Group, n. d. ). Tata Group is based in Mumbai India is not just an Indian company it is a global enterprise. Tata Group earns more revenues from operations outside India then that from the domestic market with in India.
Tata Group earns 57 percent of its revenue, which is, $67. billion in 2009-2010 came from business outside India and rest form the business in the country. Out of 90 company the company has 28 publicly listed companies whose market capitalization is of around $98. 11 billion. The company has the share holder base of 3. 5 million. The Tata group is present in 85 countries worldwide and employees around 395,000 people worldwide (Tata Group, n. d. ). The present chairman of Tata group is Ratan Tata he is the chairman of Tata Sons the promoting company of Tata group and hence the chair man of Tata Group.
Ratan Tata was born on December 28, 1937 he is the grandson of the founder Jamsetji Tata. He was raised by his grandmother Navajibai. He has done bachelors in architecture from Cornell University in 1962. He has further studied advance management program from Harvard Business School and graduated in 1975. Ratan Tata becomes the chairman of Tata sons and Tata Group in 1990. This was the time when then Indian government decided to open the Indian market to the international competition. Then Indian government also opened many industries to the private-sector investment.
Tata Group being one of the biggest group in India was well in a position to take advantage of the situation presented to them and during the same time Ratan Tata was chosen by JRD Tata as the chairman of Tata group. However, Ratan Tata did not become the chairman of Tata group directly. Initially he got a job offer in IBM which he declined with the advice of JRD Tata. He started first working in Tata steel in Jamshedpur where he worked on the floor making steel in front of blast furnish. This was like a training ground for him for the feature responsibilities (Tata Group, n. . )
Tata Group is headed by a dynamic leader Ratan Tata has two decision making groups. These groups are called Group executive office, and Group corporate center. These groups divide decision-making responsibility. Group executive office, the main objectives of the group executive office are to implement the programs in relation with governance, human resource, etc. group executive office also works to improve the synergistic between various companies within the group and also to improve synergistic between group and individual companies in the group.
The current GEO comprises of Ratan Tata, R Gopalakrishnan, Ishaat Hussain, Kishor Chaukar, and Arunkumar Gandhi. (Tata group, n. d. ) The other decision making body in management structure of the company is Group Corporate Center. This decision-making body in management works on promoting the Tata brand in the country, and around the world. The group issues policies for the growth of the company and entry in to a new area of business are reviewed in this decision-making group. Group corporate center also provides advices on financial, human resource, legal, and functional issues as and when necessary to companies in the group.
The present members in the group are Ratan Tata the chairman, JJ Irani, RK Krishna Kumar, R Gopalakrishnan, Ishaat Hussain, Kishor Chaukar and Arunkumar Gandhi. The Tata group commits it shelf to the country they operate, and to improve the quality of life of the people who work in the group, and the communities in which Tata group operates its business. Tata group is a value driven company and they believe very strongly in their values, and have five core values which help them as a guide for growth and in the arena business of Tata group.
Tata group strongly believes in integrity, and they believe that the business which they perform should be conducted in a fair manner and with honesty. The business process should be transparent. The group also believes in understanding the customer and the employees specially. Tata group strongly believes that in doing business, they should act with compassion and humanity towards the customer to whom they serve and in the internal operation of the company between the colleagues within the company. Tata group thinks that they should do their best in day to day work.
They believe that the product, which they provide, to their customer should be of the best quality. They believe that they should raise their standard of works in day to day working. They also believe that they as a group should work more cohesively. It is also important that they work in unity between the companies and their partners around the world. Tata group believes that working in a united manner can result in excellent results, which impact the growth and development of the company, and Tata group as whole.
Tata Group thinks it is responsible to the communities in which they operate their business, and it thinks that they are responsible towards the country, in which they operate. Tata group believes, in providing more to the people than what they received from them. Tata group also believes strongly in their code of conduct and do their day of the day operation in accordance with their code of conduct. They have twenty five clauses which make their code of conducts and works as a guide for their operation in day to day operation of the company.
Tata group thinks that innovation is the best way to progress and with the innovation they can achieve what they want to achieve in the business. The best example the company has displayed is by Tata motors. The Tata Nano is an example for the innovative side of the Tata group. The nano car, which is the cheapest car in the world, Tata nano costs around 100,000 Indian rupees which translates to around $2500 depending on the present exchange rates. Many in the automotive industry said that the car was impossible to make.
It was the brain child of Ratan Tata the chairman of Tata sons and Tata Group. Ratan Tata saw the Indian, middle class family of four crammed on a two-wheeler on a wet road. It is very dangerous to drive on the road in such conditions, especially in India where traffic condition is very bad. Ratan Tata got an idea of making a car which will be affordable to the emerging middle class of India. This engineering challenge which they had been never accomplished in the history of modern day automobile industry.
In the early 2003 on the sides of a business meeting, Ratan Tata expressed his wish to make an affordable car for the people of India. This was going to be a challenge, and Ratan Tata knew about it very well. He called five engineers from Tata motors to Bombay house to give them the challenge of doing which was never done before. The team of the engineers did not have any kind of idea about what they are up to and came with the ideas of cheap transport. They only got the idea of the challenge when the chairman him shelf told them about his idea of INR 100,000 cars.
The team was given the challenge was going to do something which did not have a bench mark, for next four years they were working on one man’s dream which can affect an entire country of 1. 2 billion people and their safety on the roads. During the process, of building the cheapest car of the world Tata motors has to start completely from the basics of car building. Engineers at Tata motors had to start over as they were not able to get parts from exiting suppliers around the world which can fit within the pries tag of the car. They did what Tata Group is all know about Innovate (Tata Moters , n. . ).
Engineers at Tata motors ware able to create the marvel the Tata nan, which is the cheapest car of the world. The car was holding the price tag of INR 100,000 despite the increase in the raw material price. The car was launched on early 2009. The Tata group is not Just accomplished building a car, but in many other business too they have created the cheapest water which do not use the electricity and uses the natural materials and is cheap so that the poor farmers in a remote village can use the water filter which is called Tata Swach.
This innovative feat achieved by Tata chemicals was a life changing for many rural population of India where pure water or water purification system are very costly are not cheaply available. The Tata has done it again by innovating and not only providing the solution to the problem but also providing it cheaply so that it can be used by the common Indian. The Tata Group has become the integral part of every Indian’s life is not just confined to India. Tata group is present in 85 countries. Tata group now came to the world stage my major industrial acquisition.
The biggest of them all was the acquiring of Cores. Corus was the biggest steel producer of steel in Europe and was a high end steel producer. Tata steel is the low end steel producer as the market demands in India. Tata steel was mainly focused on Indian market was the second largest steel producer in India. There was no presence of Tata steel in Europe before the takeover of the company. This is the biggest takeover by any Indian company in the world. Corus was the second largest steel producer in Europe, Tata when acquired Corus made it the fifth largest steel producer in the world.
Tata acquired Corus for $8. 1 billion and promised to fuse funds in Corus pension fund. This over take was also symbolizing the growth of Tata after 1990’s, during this two decades it has expanded in ever growing Indian market and also has stretched its wings in the international market, as well. The only way where it can expand to the world stage is by acquiring other companies, and as done my many Indian companies recently the deal between Tata and Corus was showing the newly found strength in Indian companies around the world. "One minute world news ", 2006)
Tata group did not only acquired the Corus but acquired many other brands or companies around the world. Tata motors have acquired at least one brand or company every since 2004. In 2004 Tata motors acquired the Daewoo motors. The Tata Daewoo has a very big market around the world and sells trucks under the name of Daewoo in South Korea and Pakistan and under Tata name around the world. In 2005 Tata motors acquired, Hipo Carrocera is one of the largest manufacturer of buses in Europe.
Tata Motors acquired entire 100 percent stake in the company in 2009. Tata motors become biggest bus manufacturer in Europe with the acquisition of the company. Other big acquisition and most widely know is when Tata motors bought the famous and esteemed British car manufacturer Jaguar with this Tata motors came in European high end car market. Tata now owned the famous brands like Land rover and has truly become a global brand. Tata group has been at the fore front of the overtaking global company recently has also faced with many issues due to the down turn of the global economy.
There were few issues not related to the economy but completely different like a terror attack on 26 November 2008 on an iconic Taj Mehal hotel in Mumbai which was constructed by non other than the founder of the group him shelf Jamsetji Tata more than a century ago. The attack was on the one of Mumbai’s land marks and left a historic building badly damaged, it was repaired, and was in service within few months. Tata’s has shown that it is not impossible to keeping on improving performance and growing the company no matter the circumstance exists in the country of operation.
They have grown in the company of present day after facing the strict colonial restriction against industries in colony. They have also showed how to grow in an unfriendly environment with government license policy which was to control the industries in the country. The name Tata is said to be in every Indian's life is now on the path to spread its wings around the world, and aspires to become a part of everybody life around the world.
References
http://news.bbc.co.uk/2/hi/business/6068244.stm
http://www.tata.com/htm/heritage/HeritageOption1.html
http://www.crimt.org/Publications/CSSS_WP_No58.pdf
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Tata Group: India’s Largest Conglomerate Founded by a Visionary Traveler. (2017, Mar 26). Retrieved from https://phdessay.com/tata-group/
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