Nandwana 1

Kapil Nandwana
Prof. Peter M. Burrell
BA 7010
3 August 2015
TATA Group: Leadership with Trust
The TATA group is a global enterprise headquartered in India. It comprises of more than 100
companies ranging from steel, automobiles, software to consumer goods and
telecommunications, with operations spread across six continents. The revenue of TATA
companies, taken together, was $115 billion in FY 2014-2015 and it employs over 620,470
people worldwide [1].
Sixty-seven percent of the equity of Tata Sons, the promoter holding company of TATA Group, is
held by philanthropic trusts. The largest of these trusts are the Sir Dorabji Tata Trust and the Sir
Ratan Tata Trust, which were created by the families of the sons of J.R.D Tata, the founder of
TATA Group. The wealth that accrues to the Tata trusts is deployed to support a wide range of
causes. This unique ownership structure has fostered within the group and its enterprise enduring
ethos of serving the wider community. Tata group spent nearly $157 million on corporate social
responsibility activities in FY2014 and has spent over $1.2 billion in the last decade [2].
This essay is an attempt to understand the Corporate Social Responsibility (CSR) policies of
TATA, their CSR activities, the reasons behind why TATA adopted this business model way
before the term CSR was even coined and why other companies, especially those in
developing countries, should learn and implement this business model in their operations.

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Groups Purpose and Mission Statement

In a free enterprise, the community is not just another stakeholder in the business but in fact the
very purpose of its existence.

J.R.D Tata

It is with this mindset of its founding father, that the company was established in 1868.
The groups mission statement [3] reads as follows:
At the Tata group we are committed to improving the quality of life of the communities we
serve. We do this by striving for leadership and global competitiveness in the business sectors in
which we operate.
Our practice of returning to society what we earn evokes trust among consumers, employees,
shareholders and the community. We are committed to protecting this heritage of leadership with
trust through the manner in which we conduct our business
Global Awards and Recognition

The Tata Group was awarded the Carnegie Medal of Philanthropy in 2007 in recognition
of the group's long history of philanthropic activities

TATA Steel/TATA Power has been in the list of most ethical companies by Ethisphere
since 2009. Tata Steel received the '2015 World's Most Ethical Company' Award in the
'Metals' category from Ethisphere Institute [4].

The international brand consultancy Brand Finance has ranked, Tata Group, as 39th most
valuable brand in the world.[2] . In 2011 and 2012, Tata was ranked as India's second most
trusted brand by The Brand Trust Report.[2]

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In 2009 the Tata Group was ranked 11 in the world's top 100 reputable companies by
Forbes Magazine[2]

In a 2011 investor poll conducted by equity research firm Equitymaster, TATA Group was
voted as the most trustworthy among the Indian corporate houses.[2]
TATAs contribution to improving quality of life in India

TATAs commitment to labor reforms [5]

True to their words, the TATA Group has made noteworthy contributions to uplifting the
communities they have done business in. They have spearheaded several labor welfare reforms
in India all ahead of national recognition and many years before adoption in western nations

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(See table below).

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TATAs commitment to social innovations

In India, the Group has pioneered several industries of national importance: Steel, power,
hospitality, Airlines. Most recently, the Group received global accolades for TATA motors Nano
car: a safe, low cost and affordable (only $2,200 USD) transportation solution for Indias middle
class. TATA chemicals Swach was another remarkable example of social innovation, offering
base-of-pyramid consumers a sustainable and affordable solution to the persistent problem of
water borne diseases. This replaceable filter based product, delivers safe drinking water at only
50 cents per month to a family of five. It produces clean water without using electric power,
which is often not available in rural areas. Fourteen patents have been filed for the technology
and the product [6].
TATAs contribution to Indias Education Sector
The Tata Group has helped establish and finance numerous educational and sports institutes in
India. Some of the institutes established by the Tata Group are: Tata Institute of Fundamental
Research, Tata Institute of Social Sciences, Indian Institute of Science, National Centre for
Performing Arts, Tata Football Academy, The Energy and Resources Institute.
The Tata Group has also donated $50 million to the prestigious Harvard Business School [7] .The
amount is the largest from an international donor in the business school's 102-year-old existence.

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CSR Activities of various Tata Companies [8]

The following section lists the noteworthy CSR activities of the various TATA companies:
Tata Council for Community Initiatives (TCCI)
Established in 1994, TCCI is involved in assisting Tata companies reports their sustainability
performance in accordance with Global Reporting Initiative (GRI) guidelines. It is the focal point
for the UN Global Compact in India, which has 42 Tata companies as signatories, the highest in
the world from a single business group.
Tata Relief Committee (TRC)
TRC works to provide relief at disaster affected areas. After the Gujarat earthquake the group
built 200 schools in two years and they rendered help during the Orissa floods. Even after the
Tsunami disaster members of TRC immediately reached the affected places and supplied
required materials.
Tata Steel
Tata Steel spends 5-7 per cent of its profit after tax on several CSR initiatives.

Self-Help Groups (SHGs): Over 500 self-help groups are currently operating under
poverty alleviation programs.

Economic Empowerment: A program aiming at economic empowerment through

improvised agriculture is benefitting 40,000 tribal living in over 400 villages.

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Assistance to government: Tata Steel has hosted 12 Lifeline Trains in association with the
Ministry of Railways. It has served over 50,000 people. Five thousand people have got
surgical facilities and over 1,000 people received aids and appliances.

Tata Motors:

Tata Motors is the first Indian Company to introduce vehicles with Euro norms. Tata
Motors' joint venture with Cummins Engine Company, USA, in 1992, was a major effort
to introduce emission control technology in India.

Tata Motors has planted more than 2.4 million trees in Jamshedpur region. Over half a
million trees have been planted in the Poona region.

Tata Tea
Tata Tea has been working hard since the 1980s to fulfill the needs of specially-abled people. It
has set up the Srishti Welfare Centre at Munnar, Kerala; its various programs provide education,
training and rehabilitation of children and young adults with special needs.
TISCO
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. TISCO was conferred the Global Business Coalition Award in 2003 for
its efforts in spreading awareness about HIV/AIDS.
Tata Consultancy Services (TCS)
TCS has conducted various IT educational programs in India. In partnership with the Indian
government, they launched Saakshar Bharat, an adult education program in 2009. The

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program, aims to impart education to 70 million people, of which at least 85 percent will be
women. The program has already been rolled out in 167 districts across 19 states.

Conclusion
Having lived in India for 25 years, I have firsthand experience of the contribution of TATA
towards the upliftment of the India society and their various humanitarian activities. Despite
being a for-profit organization, they enjoy tremendous public support and trust due to their
philanthropic activities and they have rarely made the news for wrong reasons.
Business corporations, especially in developing countries must learn from TATAs tremendous
success in India. The success of the Tata group over the years shows that it is possible to
reconcile social objectives with profitability and other corporate needs. Corporations should
adopt such business practices, not just because it makes financial sense (See exhibit 1) but also
because it is their moral obligation to do so. As Mr. Ratan Tata, groups chairman from 19912012, said:
Taking advantage of Indias rapid growth requires responsible leadership. I think it is
wrong for a company in India to operate in exactly the same way, without any additional
responsibilities, as if it were operating in the Unites States, for example. Companies that
are not good corporate citizens that dont hold to standards and that allow the
environment and the community to suffer are really criminals in todays world.
The governments of the western world have a strong social security net, so corporate can
concentrate on making prop fits and paying taxes regularly, but in this regard India still

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lags behind. We are far away from reaching that phase of economic development where
government is solely responsible for the basic needs of the public. We dont have a social
security, adequate health and education services. So till then, corporate houses should fill
the gaps.
References
[1] https://en.wikipedia.org/wiki/Tata_Group. Web. 2 August, 2015
[2] http://timesofindia.indiatimes.com/business/india-business/Tatas-spent-Rs-1k-cr-oncorporate-social-responsibility-activities-in-FY14/articleshow/38444133.cms. Web. 2 August,
2015
[3] http://www.tata.com/aboutus/articlesinside/Values-and-purpose. Web. 2 August, 2015
[4] http://ethisphere.com/worlds-most-ethical/wme-honorees/. Web. 2 August, 2015
[5] Branzei, O. (2010). Tata: Leadership with Trust, Ivey Publishing, 2010 Aspen Business &
Society International Case Competition.
[6] http://www.tatachemicals.com/media/releases/200912dec/20091207.htm#.Vb-FE_lVhBc.
Web. 2 August, 2015
[7] http://www.hbs.edu/news/releases/Pages/tatagift.aspx. Web. 2 August, 2015
[8] Corporate Social Responsibility: A Case Study Of TATA Group, IOSR Journal of Business
and Management (IOSRJBM), ISSN: 2278-487X Volume 3, Issue 5, pages17-27

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Exhibit 1
Investing in ethics is beneficial for any company, even in a recession. The below graph compares
the WME Index, or all publicly traded 2011 Worlds Most Ethical Company honorees, against
the S&P 500 since the initial Worlds Most Ethical Companies recognition from 2007.
Percent Returns: Worlds most ethical companies vs S&P 500