TATA Group- Human Factors, Ethics & Development

Submitted by Devika Johar

Semester 1

Introduction
The Tata Group is one of the largest and most respected business conglomerates in India.
Established 140 years ago by Jamsetji Tata, the groups businesses encompass power, software,
automobiles, steel, hotels and chemicals among other interests. The Group employs more than
350,000 people worldwide, and 27 Tata Group companies are publicly listed. In addition to its
strong business model, the Tata Group is also acknowledged as a socially conscious organization
and is well known for its philanthropy.

1. Leadership of Ratan Tata and Organizational Development Under Him

When Ratan Tata took over the reins of the Tata Group on March 25th 1991, little did industry
observers expect the manifold growth that Tata Group would post in the decade to come. Even
for Ratan Tata, being placed at the helm of a Rs 10,627 crore company, whose diverse businesses
ranged from tea to automobiles, was a daunting task. Particularly, the Indian market was just
opening up for foreign investments and multinational companies were mushrooming on the
Indian soil. Since then, the Tata Group transformed under the leadership of Ratan Tata to become
one of Indias most respected corporate houses and accounted for 2.4% of the countrys GDP4 .
By the decade that ended in March 2002, Tata Groups turnover had leapfrogged to Rs 49,456
crores a fourfold growth since Ratan Tata became the groups Chairman.
Specifically, this rise of Tata Group was credited to the vision of Ratan Tata whose focus on
globalizing automobiles and information technology offered global opportunities for the group
companies. Talking about the Tata Groups plans, Ratan Tata said, Tata should become an entity
of the world. It has always been my view that we should go abroad, that we have not done
enough.
It was also decided by Ratan Tata to use the brand by all the companies under Tata Group. With
this he established the identity of Tata Group. However, the established brand such as Taj Group
of Hotels kept as it is. Because of this it helped to codify the companies under Tata brand.

i. Communication of brand
Ratan Tata used systematic communication to reach the Tata brand to common people. In 200203 and 2004-05 through advertisement, Ratan Tata used the slogan A Century of Trust and
Improving the quality of life. Due to the brand and trademark, it brought coordination and
relevance to communicate the values of Tata Group to the common people.

ii. Creativity and innovation

Ratan Tata says creativity is a nucleus of business excellence. He used this excellence in Titan
watches. To motivate the creativity Ratan Tata established Tata Innovation Forum in 2007. The
forum works for generating ideas among the people and tries to bring it in practice. Tata nano,
Tata Swach and a software to teach illiterate adults in 40 hours are few examples.

iii. Social service

Tata Group has established Tata Trust. Each company under Tata group channels 4% of its
operating income to the Tata Trust. The institutions founded by the group - TIFR, TISS, Tata
Memorial Hospitals are the important examples of social services, these are supported and
cherished by the group. The Tata Medical Centre was inaugurated by Ratan Tata to provide
medical facilities to the needy people. From 1931 Tata Group donated Rs. 1888 crore (436
million dollars). These donations are divided between institutions, management of natural
resources and rural employment, urban poverty and employment, education, health, civil society,
Govt. and human rights, media, art and culture.
After the 26/11 Mumbai terrorist attack at the Taj Mahal Hotel, Ratan Tata personally visited the
families of employees that where affected. He also compensated to the railway employees, police
staff & pedestrians. He paid salaries to the employees despite the close of hotel due to Mumbai
attack and provided food , water, sanitation and first aid through employee outreach program. A
psychiatric institution was established to council who were affected from attack and needed help.
Ratan Tata also granted the education of children of the victims of the terrorist attack.

iv. Leadership with Trust

The Tata Group can be called as a unique asset which represents Leadership with Trust. It
provides complete management and financial resources to emerge and develop globally
competitive skills to succeed in this endeavor. Tata has strong values where vision and mission
comprises of ensuring growth and developing sustainable value to all stakeholders. It mainly

focus on the culture of sustainability. It believes in collaboration means it believes in achieving

success through teamwork, within employees and partners. Its values comprise of care or
concern about the well being of its employees and bettering its standards continuously with
passion and pride.
According to Ratan Tata, in addition to good leadership and management, loyalty must be earned
by managers and employees. His gentle, kind manner gives rise to loyalty and yet he encourages
his managers to make tough decisions.
I am highly inspired by the leadership skills and motivating styles of such great leaders who have
really worked for the growth and prosperity of the nation. Their inspirational motivations
associates them to commit to the vision of the organization which in turn had also encourage the
employees to reach the goals. I firmly believe that their innovations and creativity had really has
a challenging effect on the normal beliefs of the people. They are the real leaders who had
individual consideration with each of its associates which help them to reach goals of the
organization. Today the Tata group is a renowned company which inspires confidence in its
employees, encourage employees to volunteer to perform tasks and high employee satisfaction.
This is the reason why the leading brand of Tata group is able to maintain its position and
becoming better with its own authenticity.

2. Motivation
To begin with, Tata starts from within. Their aim is to ensure that all employees are made aware
of and have the opportunity to apply for open positions either before or concurrent with the
consideration of external candidates for employment. At TCL, employees can apply for any
position open in any of the 40 countries; many times the position is at a higher level and/or with
higher salary.
It has always been aspirational to work with the Tata brand and its companies. The Tatas were
the first to introduce employee welfare rules, ahead of the actual laws. They strive to ensure a
happy and motivated work culture for our employees.

i. Employee Welfare Programs

In order to enable the employees to take care of their health, the company provides free annual
health check-up to those who are 40 years and above. In addition to covering employees and
family in the health insurance programme, we also cover parents and/or parents-in-law.

Another unique welfare programme TCL offers to its employees is the APEX (Achieving
Personal Excellence) programme that helps in alleviating stress, maintain work-life balance and
learn self-management and leadership skills.

ii. Training and Development

For each top performer, a unique and customised Career Action Plan is developed not only to just
meet his/her career aspirations, but also develop the employee for one or more future roles. They
also leverage the leadership development programmes offered by Tata Management and Training
Centre which benchmark with the best in the world.
In a broad sense, whatever the role may be, employees are looking for intellectual stimulation
and commensurate compensation. At Tata Communications, they work towards creating a culture
where people are encouraged to learn, develop new skills and grow. It is endemic in our work
culture.
When it comes to employee development, they have a quarterly training calendar which focuses
on various aspects such as management development; career development; basic skills;
professional skills; technical training; supervisory skills and creative skills.
Training is a planned effort on our part to facilitate job learning, knowledge and skill. It is an
important factor for enhancing productivity and we have found that providing on-going learning
as well as training has a highly significant effect on job satisfaction. Group training sessions also
enhance employee motivation and commitment.
When Tata hires talent to be part of its organisation, they consider it their responsibility to groom
that talent. Alternatively, when they find that a particular employee may not be excelling at
his/her role which may affect their appraisal, they work towards understanding the employee's
key strengths and placing them in teams and entities within the organisation which will
complement their strengths.

iii. Rewards and Recognition

Tata also makes it a point to recognise employee contribution. It has several programmes such
our Rewards and Recognition programme and Pro Club to celebrate achievers.
Through the Rewards and Recognition programme, they felicitate the employees and give them
awards on a quarterly basis for exceptional performance; this includes monetary rewards as well.
Amongst all the incentives they offer, Pro Club is the most coveted award. Every year, they
select the top 1% of the company - these are employees who have truly over achieved their target

and contributed their very best and stood out from the rest - and send them on an all-expense
paid trip to an exotic location along with other winners and a team of senior executives.

iv. Employee Future

One very exciting programme we are working on currently is to build multi-faceted leaders for
the future - identify people at the middle level and groom them for CXO positions. We want to
be able to hire all CXO candidates internally. The second one is to have a Capability
Development Plan for each and every employee.
Tata Steel has a unique programme, Aspire Knowledge Manthan, which facilitates knowledge
sharing among supervisors and workers. Its objective is to motivate workers to perform better
and to enhance their capabilities. Another Tata company, TCS, has a job rotation policy that
exposes its employees to new responsibilities, functions or geographies on a regular basis.

3. Corporate Social Responsibility

Considered as pioneers in the area of CSR, the Tata group has played an active role in nation
building and socio-economic development since the early 1900s. A survey conducted by the
website www.indianngos.com revealed that Tatas spent Rs. 1.5 billion on community
development and social services during the fiscal 2001-02 - the highest by any corporate house
in India.

The Tata group has long accepted the idea that CSR makes business sense. This was realized by
JN Tata way back in 1895, when he stated, "We do not claim to be more unselfish, more
generous or more philanthropic than others, but we think we started on sound and
straightforward business principles considering the interests of the shareholders, our own and the
health and welfare of our employees... the sure foundation of prosperity."

Since inception, the Tata group has placed equal importance on maximizing financial returns as
on fulfilling its social and environmental responsibilities - popularly known as the triple bottom
line. After decades of corporate philanthropy, the efforts of the group in recent years have been
directed towards synchronization of the Triple Bottom Line (TBL). Through its TBL initiative,
the Tata group aimed at harmonizing environmental factors by reducing the negative impact of
its commercial activities and initiating drives encouraging environment- friendly practices. In
order to build social capital in the community, the group has got its senior management involved
in social programs, and has encouraged employees to share their skills with others and work with
community-based organizations.
In corporate social responsibility, Ratan Tata has given new direction and focus to the Tata
Groups disparate activities with the creation of the Tata Council for Community Initiatives
(TCCI) in 1996.
In the early days, philanthropy was about creating development institutions such as hospitals,
and initiatives of a nature which at the time were more about nation building than ours are today.
Today, the companys philanthropic initiatives have greater focus, for example, on creation of
awareness of things like discrimination against the girl child; on microfinance, to get people
away from moneylenders; on water harvesting and conservation; in moving more to small
community initiatives. From their own grant giving, they have found that the greatest challenge
is to find appropriate, professionally managed grantees or NGOs.
Some of their water conservation grantees have transformed the areas in which they are working,
and whatever they have seen there is just amazing. A number of their grantees have worked with
villages -- villages starved of water that have had no livelihoods -- and with water harvesting and
conservation, theyve created year-round water supply and changed the entire fabric of these
villages. Thanks to a partnership between the research lab of software giant Tata Consultancy
Services (TCS) and a range of local NGOs, clean and safe drinking water is available for the first
time for thousands of households in rural Maharashtra.
Developed specifically for rural areas, the filter is the result of years of research and field trials
by scientists at the Tata Research Development and Design Centre (TRDDC), the Pune-based
R&D division of TCS. "Theyve been trying to bridge the divide between the IT world and the
rest of India, and this has come out of that effort," explains Ratan N. Tata. While the connection
between information technology and low-tech water filters may not be obvious, the project
exemplifies Tata philanthropies emphasis on rural communities and water conservation and is
squarely in keeping with TRDDCs mission to use research to transform lives.
The different group companies have received several awards for their fulfillment of social
responsibility. For instance, TISCO was awarded The Energy Research Institute (TERI) award
for Corporate Social Responsibility (CSR) for the fiscal year 2002-03 in recognition of its
corporate citizenship and sustainability initiatives. As the only Indian company trying to put into

practice the Global Compact principles on human rights, labor and environment, TISCO was also
conferred the Global Business Coalition Award in 2003 for its efforts in spreading awareness
about HIV/AIDS.
In fact, the Tata Group spent Rs 1,000 crore on corporate social responsibility (CSR) in 2013-14.
If one were to exclude the salt-to-software enterprise's philanthropic trusts, the Tata Group
companies spent Rs 660 crore on CSR in the just ended fiscal. The diversified Indian
multinational's CSR spend was well above 2% of its net profit, a minimum requirement for an
Indian company under the Companies Act. A significant amount of the total CSR spend by the
Tata Group has gone into skill development, health and education, with Tata Steel emerging as
the biggest spender within the group.
To conclude with a quote by the founder of the Tata Group, Jamshedji N. Tata,
"In a free enterprise, the community is not just another stakeholder in business but is in fact the
very purpose of its existence."