Ethical values in business the Tata way

In his On Value and Values, Douglas K. Smith writes: "Values are estimations not of worth but of worthwhileness. There is a deep backward- and forward-looking ualit! to "alues. If "alue is what makes us wealth!# "alues# we assume and regularl! assert# are what make us human. $thical "alues is all about making people human." Tatas are not the onl! ones to pursue ethical "alues in business. %ut their eminent position and tradition stretching well o"er a hundred !ears makes them worth! of stud!. In the public mind# business ethics is mainl! connected with financial integrit!. Important as that is# the real meaning of the word &ethics' goes far be!ond that. The Oxford Dictionary defines ethics as "the science of morals in human conduct# a moral principle or code."
Ethics defined

The word ethics# therefore# encompasses the entire spectrum of human conduct. %usiness ethics e"en co"ers how a person in business deals with his colleagues( staff and workers( shareholders( customers( the communit!( the go"ernment( en"ironment( and the nation and its interest. )n "alues# *lisdair +acInt!re in After Virtue obser"es that "our entire ci"ilisation has forgotten what ethical "alues are( we continue to use man! of the ke! e,pressions# but we ha"e "er! largel! - if not entirel! - lost our comprehension both theoretical and practical of moralit!." .e means to sa! that we use the words# but not the music. The business lingo often co"ers up the "culture of winning" in business# not of rectitude alongside the struggle to win. +ost ha"e stepped into the culture of winning - some e"en b! illegal means# others b! all means short of the illegal. In furtherance of mouthing the words# companies bring out ethical statements. $nron had its &Statement of Values' and T!co a &/uide to $thical 0onduct'. %ut that pre"ented neither compan! from tripping up disastrousl!. * long-standing culture ma! help but it is no guarantee for the future performance. )n the other hand# a compan! without the tradition of integrit! can mo"e into that bracket if the top person supports those who stand up for "alues within the organisation and practices it himself. 1e ha"e seen it happen.
Jamsetji Tata's vision

2amset3i Tata belie"ed in practising the ethical essence of his faith rather than attend to the rituals. 4rophet 5arathustra's main teachings of "good thoughts# good words# good deeds" were inscribed in 2amset3i Tata's mind and heart before he inscribed them in his motto "Humata, Hukta, Huvarashta". +ore than 677 !ears ago# he said: "1e do not claim to be more unselfish# more generous and more philanthropic than other people# %ut we think we started on sound and straightforward business principles# considering the interests of the shareholders our own# and the health and welfare of the emplo!ees# the sure foundation of our

prosperit!." )n the issue of en"ironment# the awakening came during his "isits to *merican steel plants in 6879. .e was impressed b! the technolog! but repulsed b! the li"ing conditions of the workers. .e wrote to his son# Dorab# from there about his own dreams for a steel cit! of the future. "%e sure to la! wide streets# planted with shad! trees# e"er! other of a uick growing "ariet!. %e sure there is plent! of space for lawns and gardens. :eser"e large areas for football# hocke! and parks. $armark areas for .indu temples# +ohammedan mos ues and 0hristian churches." 2amset3i Tata had "isualised it all e"en before the site of the steel plant was disco"ered fi"e !ears later at Sakchi in %ihar. 1hen the steel cit! came up# his successors did plant trees of an alternate "ariet! on both sides of the streets and reser"ed and earmarked areas as he had ad"ised.
Fortune for Science

*s for his concern for the nation# 2amset3i's offer to gi"e almost half his fortune - 6; buildings and four landed properties - to the <ni"ersit! of :esearch =later to be the Indian Institute of Science> came from his lo"e to lift a subdued agricultural India to one as ad"anced as the nations of the 1est he regularl! "isited. Swami Vi"ekananda's 3ournal#Prabuddha Bharata, wrote enthusiasticall!: "1e are not aware of an! pro3ect at once so opportune and so far reaching as beneficial as this was e"er mooted in India... '' )f his four grand pioneering schemes - the <ni"ersit! of :esearch# a steel plant# a h!dro-electric plant# and a world-class hotel# onl! one did 2amset3i li"e to see fulfilled the Ta3 +ahal 4alace .otel. It was an uphill task for his successors to turn his dream into realit!# wading through problem after problem. )nl! their gratitude and lo!alt! affection and care he bestowed /ratitude and lo!alt! as part of his officers and# in return# from
`It is a city'

to him in response to 2amset3i's "ision# plus the on e"er! one of them# enabled the schemes to fructif!. ethical "alues has to work both wa!s from the boss to them to the compan!.

In 689?# at a time when finances were running short# a shareholder accused the Tatas of wasting mone! on building sanitar! hutments and other facilities for workers. :. D. Tata# a nephew of 2amset3i# who was close to him# said: "/entlemen# people who ask these uestions are sadl! lacking in imagination. 1e are not putting up a row of workmen's huts in 2amshedpur - we are building a cit!." * noble "ision strengthens the con"iction to walk along ethical lines. In 689;# there was a telegram from 2amshedpur that there was no mone! to pa! workers their salaries. Sir Dorab3i Tata went with :. D. Tata to the Imperial %ank =now the State %ank of India> and pledged his entire personal fortune of :s 6 crore for a public limited compan! in which the Tatas could not ha"e held more than 66 per cent. .ow man! would do that toda!@ +ercifull!# the compan! turned around.

On moral terms

)n dealing with colleagues on an ethical basis# 2. :. D. Tata =2ul! 98 is his 679nd birth anni"ersar!> related to me a situation he faced in 68?A before he became 0hairman. .e had started the Tata *irlines with an $nglish pilot# Be"ille Vincent# who# under the contract# was entitled to one-third share of the profits. The profit in the first !ear was :s C7#777 and the contract was for fi"e !ears. %ut# b! 68?A# the profit had risen to :s C lakh. *t the time of renewal of the contract# the legal ad"iser to the Tatas told 2:D that the! were not bound to renew the contract on the same terms. 2:D knew in his heart that it was not fair to the man who# with him# was responsible for establishing the airline. So he went to another solicitor who felt that though the Tatas were legall! not bound b! the same terms# morall! the! were. 2:D# who was not e"en the 0hairman# assured the pilot that the terms would be the same as before. "%ut did !ou not consult !our co-directors@" I in uired. "Bo#" replied 2:D. "It was not right and fair and I 3ust told him." )n the nation# when I told him in 68A8 that the Tatas had not e,panded in the 68C7s and the 68A7s as some other groups had# he replied firml!: "I ha"e often thought about that. If we had done some of the things that some other groups ha"e done# we would ha"e been twice as big as we are toda!. %ut we did not# and I would not ha"e it an! other wa!."
No compromises

+r :atan Tata has held fast to these standards. 1hen the managing director of a Tata compan! told him that# in his compan!# straight financial dealings would not work# +r :atan Tata told him that the Tatas would rather e,it the compan! than compromise. *s the +D left his room# +r :atan Tata thought the +D would uit. Instead# si, months later# +r Tata returned to show him much better results. In an epilogue to the 977; edition of The Creation of ealth, +r :atan Tata writes: "I would hope that m! successors would ne"er compromise and turn to soft options to meet their ends." )f course# though ethics is more than not gi"ing or taking bribes# the staff e,pect from those who are their business leaders# in return for their work# due appreciation# gratitude# steadfastness and fairness. The best ethical leaders are those who are not swept off b! their work# but take time to e,tend their human touch to their staff when the! are in need. 2:D once told me# "To lead men !ou ha"e got to lead them with affection." *nd he li"ed what he said. =The author is a biographer of 2. :. D. Tata.>