The Greatest Company in the World The Story of Tata (Book by Peter Casey in 2014) Retold by DR T.H. CHOWDARY Director: Center for Telecom Management and Studies Chairman: Pragna Bharati (intellect India ) Former: Chairman & Managing Director Videsh Sanchar Nigam Limited & Information Technology Advisor, Government of Andhra Pradesh M: 98 490 6 7359 T: +91(40) 6667-1191(O) 2784-3121® F: +91 (40) 6667-1111 hanuman.chowdary@tcs.com Website: www.drthchowdary.net Talk @ TCS, Qcity: 8th Jan 2015

The Ideal of a Corporate Enterprise Create wealth by harnessing natural and human resources Neither altruism nor misanthropy Strive to build a prosperous, powerful and intellectual nation (as Member of a Global family – Vasudhaiva Kutumbakam) Tata companies fulfill these ideals most - Hence have come to be called “ The Greatest Company In the World” the story is told by Peter Casey; An Irishman, Writer; Chairman of a Global Recruitment and Search Co Lives in Atlanta, (GA) USA THC_CTMS S725_Jan2015

Fascinating Facts Tata Sons was founded in 1868 ( Gandhiji was born in 1869 ) by Jamsetji Tata Tata Group employs half a million people Controls assets valued at $ 77.7 bln (Rs.4,68,000 cr) Revenues more than $ 100 bln (Rs. 6,00,000 cr) Profits $6.23 bln (Rs. 37,380 cr) Operates in over 50 countries, spread over all the continents THC_CTMS S725_Jan2015

Tata by Numbers Two thirds of Tata companies are owned by philanthropic Trusts Tata is one of the biggest charities in the world Tata consists of more than 130 companies. 32 are traded in stock exchanges in India Two of the top 20 Indian companies in terms of market capitalization are of Tata group –TCS and Tata Motors The largest company in India measured by market cap is TCS Tetly, a Tata company is the second largest tea producer in the world Tata steel is the 5th largest steel company in the world Tata Power is India’s largest private sector power producer THC_CTMS S725_Jan2015

Jamsetji Tata (b.13 March 1839 d. 19 May 1904) From a priests family Builder of India’s industries and intellectual power. ‘He was above all a patriot Who made no public speeches To his mind, wealth and the industry which led to wealth, were not ends in themselves, but means to an end, the stimulation of the latent resources of the country and its elevation in the scale of nations.” -The Times of India 13 April 1912 On the occasion of the unveiling of the Memorial Statue of J N Tata in Bombay THC_CTMS S725_Jan2015

Tata Companies (1) The first “Make in India” idea and practices man Central India Spinning Weaving & Mfg co in 1, Jan 1877 Cotton Mills (Mumbai, Nagpur) in 1870s; Swadesi Cotton Mills -1886 Steel Making (Sakchi) TISCO, Jamshedpur: also Rails, locomotives Oils (edible) :TOMCO Chemicals :Tata Chemicals Automobiles: Trucks, Buses THC_CTMS S725_Jan2015

Tata Companies (2) Power: Hydro Watches: Titan Appliances: Voltas, Air-conditioners…. Housing Hotels: Taj (Taj-1903) Airlines: Tata Airlines - Air India – Air India International IT- TCS, CMC, Tata Tele ,Tata Coms, Tata Sky, Tata Elxi…. Tata Brand : User companies pay 0.15% -025% of annual revenues to Tata Sons subject to a cap of 5% of profits. THC_CTMS S725_Jan2015

Some International Comparisons One of the Largest family -owned business in the world 1. WalMart -USA= $400 bln (Rs.24 lakh cr) revenue 2. Tata - India= $100 bln (Rs. 6 lakh cr)revenue Tata family’s direct ownership stake in Tata Sons is just 1.5% ! Tata family’s philanthropic trusts hold majority stakes in Tata Companies THC_CTMS S725_Jan2015

Tata Companies in Different Sectors Chemicals – 7 Consumer products -8 Energy-6 Engineering products & services- 15 Materials-19 Services-25 ICTs -13 Msc -39 THC_CTMS S725_Jan2015

Important Cos of Tata Group Net Profit/Loss (2013-14) (Rs. In Cr) (Source: Eenadu daily, 28 Dec 2014) Profit Loss THC_CTMS S725_Jan2015

Tata & Intellect India (1) Indian Institute of Science(IISc) - operational 1911 Jamsetji donated 14 buildings & 4 other properties in Bombay in 1898 for establishment of an University dedicated to Science valued at Rs. 10 mln ($ 4.56 mln; then, $140 mln in 2012) Tata Institute of Fundamental Research (TIFR) 1944 – (spawned BARC, ISRO, ECIL) Tat Institute of Social Sciences Tata Memorial Center for cancer Research and Treatment The National Center for Performing Arts The national Institute of Advanced Studies THC_CTMS S725_Jan2015

Tata & Intellect India (2) Sir Dorabji Tata Center for Research in Tropical Diseases The Lady Tata Memorial Trust (funds research in leukemia) The Lady Meherbai D. Tata Education Trust (funds advanced education for women) Dorab Tata sent three runners to the Antwerp Olympics in 1930 Dorab Tata financed the Indian team in 1924 Paris Olympics Indian Hokey team to the 1928 Amsterdam Olympics was sent by Dorab Tata . India won the gold. THC_CTMS S725_Jan2015

Tata Support for Education Jamsetji’s first Trust- J N Tata Endowment in the Y 1892 This Trust has paid for the education in UK for 20% of Indian ICS officers In the year 1898 he gifted half of his wealth to establish the Indian Institute of Science in Bengaluru .This was opened in 1911 This gift was inspired by Swami Vivekananda’s advice to Jamsetji when they were together travelling to America ; Jamsetji to get technology to make steel from the US and Swami Vivekananda to address the Parliament of Religions. Vivekananda suggested to Jamsetji to grow technology within India instead of importing it from the USA. (Andrew Carnegie gave $ 1 mln in 1902) for a technical school in Pittsburg, USA which later developed into the famous Carnegie Mellon University.) Sir RatanTata (JRD) financed the first archeological excavation in Pataliputhra (Patna) where the Mauryan Throne Room of Asoka was discovered THC_CTMS S725_Jan2015

Tata Values (1) Servant – leaders (ethos: one who cares for others so that they can better care for themselves and perform with excellence) Not employee-Manager What can we do for others How can we make the most money An insurance policy for every associate Tax compliance –not avoidance A senior Tata Executive presented a tax saving scheme to JRD and concluded , “ it is not illegal” JRD: “ Not illegal, yes; but is it right ?” the scheme was dropped. “The avoidance of tax may be lawful, but it is not yet a virtue. -Lord Denning In 1895 at Empress Mills ( so named as the Mills commenced production on the day Queen Victoria was installed as Empress of India) Jamsetji said, “consider the interests of shareholders as our own and the health and welfare of the employees the sure foundation of our prosperity…” THC_CTMS S725_Jan2015

Tata Values (2) In Jamshedpur, the Tata town : Sakchi was renamed as Jamshedpur by no less a person than Lord Chelmsford, the Vice Roy and Governor General of India as a tribute to Jamsetji Tata Housing for all employees at nominal rent - pension schemes – free education and health and medical services – free transport between home and company Free electricity Accident insurance Employees resisted nationalisation of TISCO move by George Fernandez the Industry Minister, himself a labour leader, in the Janata Government 1978 THC_CTMS S725_Jan2015

JRD - The Greatest Indian (1) (b.29 July 1904 d.29 Nov 1993) He was Chairman of the Tatas for 53 years Joined Tatas in 1925 at age 21 He was a French citizen born to a French Mother in Paris and to the Indian Father, a Tata. He renounced French citizenship in 1929 and became the youngest Chairman of Tatas at age 24 . No college degree As a French citizen he served in the French Army for an year He became the India’s first licenced Air Pilot in 1929 In 1932 he founded the first commercial Indian Airlines- Tata Airlines by buying two second hand planes for Rs. 1 lakh each. THC_CTMS S725_Jan2015

JRD - The Greatest Indian (2) India’s first commercial flight was in 1932 from Karachi to Bombay carrying mails for the Indian P&T - JRD was the Pilot. In 1946 Tata Air Lines went public and was renamed Air India Ltd. In 1948 he founded Air India International Nehru Nationalised Air India in 1953 In 1978-79 the Janata government nationalised Air India International but JRD was kept as Chairman of both the companies until 1978. THC_CTMS S725_Jan2015

JRD and Nehru on Population JRD told Nehru in 1952 that planning and development can’t remove poverty unless population is controlled. (far ahead of China’s Deng Xiao Ping since 1978) . Nehru scoffed and dismissed the idea. So we have dreadful unemployment and unemployability eg: certified but not qualified engineers, B.Techs, MBAs. We add 18 mln people a year. Never created more than 8mln jobs per year. JRD donated for and founded the International Institute of Population Studies. JRD received UN Population Award in 1992 ( Kailash Satyardhi gets a Nobel Prize for reducing child labour; not for reducing the production of jobless children) THC_CTMS S725_Jan2015

Tata Philanthropy: Distinct from U.S American Philanthropists built and ran their business first, for profit and only then after they made millions/ billions, did they begin thinking how to share their wealth Theirs was dog-eat-dog capitalism. Carnegie-Ruthless strike breaker Morgan-Monopolist Rockefeller- The most hated and feared in American Business Bill gates- The most envied For these philanthropy – After-thought For Jamsetji – Driving Thought THC_CTMS S725_Jan2015

TCS - Jewel in the Tata Crown TCS was created in 1968 The first chief was Dr F C Kohli considered the “Father of the Indian I.T”. He nurtured the company Invigorated by S. Ramadorai Boosted by N.Chandrasekaran Had 20,000 Associates in 2000 Had 45,000 in 2005 Now has about 300,000 Has the lowest (10.7%)employee turnover Is the largest Indian I.T Com ( followed by Cognizant, Infosys, Wipro & HCL) THC_CTMS S725_Jan2015

TCS - Revenues 2000 = $ 0.32 bln 2003= $1 bln 2009= $ 6 bln 2015= $ 15 bln (Rs. 90,000 cr) Only 7.6 % of TCS business is from India THC_CTMS S725_Jan2015

Dhanyawad: Thank You THC_CTMS S725_Jan2015