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Tata Group
Company typePrivate
IndustryConglomerate
Founded1868
FounderJamsedji Tata
Headquarters
Mumbai, Maharashtra
,
India
Area served
Worldwide
Key people
Ratan Tata
(Chairman)
Cyrus Pallonji Mistry
(Deputy Chairman)[1]
ProductsAutomotive, steel, telecommunications, metals, financial services, hotels, property development, energy, engineering products, consumer products, chemicals, information technology, retailing
RevenueIncrease US$ 83.3 billion (2010-11)[2]
Increase US$ 05.8 billion (2010-11)[2]
Total assetsIncrease US$ 68.9 billion (2010-11)[2]
OwnerTata Sons
Number of employees
424,365 (2010-11)[2]
SubsidiariesList of subsidiaries
Websitewww.tata.com

Tata Group is an Indian multinational conglomerate company headquartered in Mumbai, Maharashtra, India.[3] It is one of the largest conglomerates in India by market capitalization and revenue. It encompasses several primary business sectors: chemicals, consumer products, energy, engineering, information systems, materials, and services. Tata Group has operations in more than 80 countries across six continents and its companies export products and services to 80 nations. It comprises 114 companies and subsidiaries in eight business sectors,[4] 27 of which are publicly listed. 65.8% of the ownership of Tata Group is held in charitable trusts.[5] Companies which form a major part of the group include Tata Steel (including Tata Steel Europe), Tata Motors (including Jaguar Land Rover), Tata Consultancy Services, Tata Technologies, Tata Tea (including Tetley), Tata Chemicals, Titan Industries, Tata Power, Tata Communications, Tata Sons, Tata Teleservices and the Taj Hotels.

The group takes the name of its founder, Jamsedji Tata, a member of whose family has almost invariably been the chairman of the group. The current chairman of the Tata group is Ratan Tata, who took over from J. R. D. Tata in 1991. The company is currently in its fifth generation of family stewardship.[6] The group has more than 100 companies and Tata Sons is the promoter of all key Tata companies and holds the bulk of shareholding in these companies. The chairman of Tata Sons has traditionally been the chairman of the Tata group. About 66% of the equity capital of Tata Sons is held by philanthropic trusts endowed by members of the Tata family.

The 2009, annual survey by the Reputation Institute ranked Tata Group as the 11th most reputable company in the world.[7] The survey included 600 global companies. The Tata Group has helped establish and finance numerous quality research, educational and cultural institutes in India.[8][9] The group was awarded the Carnegie Medal of Philanthropy in 2007 in recognition of its long history of philanthropic activities.[10] Tata gets more than 2/3 of its revenue from outside India.[11] In June 2011, based on market value Tata Group has become India's wealthiest group with $98.7 billion.[12]

History

The Tata Group was founded as a private trading firm in 1868 by entrepreneur and philanthropist Jamsetji Nusserwanji Tata.[13] In 1902 the group incorporated the Indian Hotels Company to commission the Taj Mahal Palace & Tower, the first luxury hotel in India, which opened the following year. After Jamsetji’s death in 1904, his son Sir Dorab Tata took over as chair of the Tata Group. Under Dorab’s leadership the group quickly diversified, venturing into a vast array of new industries, including steel (1907), electricity (1910), education (1911), consumer goods (1917), and aviation (1932).[14]

Following Dorab’s death in 1932, Sir Nowroji Saklatwala became the group’s chair. Six years later Jehangir Ratanji Dadabhoy Tata (J.R.D.) took over the position. His continued expansion of the company into new sectors—such as chemicals (1939), technology (1945), cosmetics (1952), marketing, engineering, and manufacturing (1954), tea (1962), and software services (1968)—earned Tata Group international recognition. In 1945 Tata Group established the Tata Engineering and Locomotive Company (TELCO) to manufacture engineering and locomotive products; it was renamed Tata Motors in 2003. In 1991 J.R.D.’s nephew, Indian business mogul Ratan Naval Tata, succeeded him as chairman of the Tata Group.[15] Upon assuming leadership of the conglomerate, Ratan aggressively sought to expand it, and increasingly he focused on globalizing its businesses. In 2000 the group acquired London-based Tetley Tea, and in 2004 it purchased the truck-manufacturing operations of South Korea’s Daewoo Motors. In 2001 Tata Group partnered with American International Group, Inc. (AIG) to create the insurance company Tata-AIG. In 2007 Tata Steel completed the biggest corporate takeover by an Indian company when it acquired the giant Anglo-Dutch steel manufacturer Corus Group. The following year the company made headlines worldwide when it ventured into the automotive industry.

Tata Group of Companies

Main article: List of entities associated with Tata Group
Tata Group
Bombay House, the head office of Tata Group
Tata Bus
Tata Nano
Packages of Tata Tea
Himalyan–Tata Mineral Water

This section lists the Tata companies and details their business:

Chemicals

Consumer Products

Energy

Engineering

Information Systems and Communications

Services

Steel

Acquisitions

2

Philanthropy

The Tata Group has helped establish and finance numerous quality research, educational and cultural institutes in India.[8][9] The Tata Group was awarded the Carnegie Medal of Philanthropy in 2007 in recognition of the group's long history of philanthropic activities.[10] Some of the institutes established by the Tata Group are:

The Tata Group has donated a Rs. 220 crore ($50 million) to the prestigious Harvard Business School (HBS) to build an academic and a residential building on the institute’s campus in Boston, Massachusetts. The new building will be called the Tata Hall and used for the institute’s executive education programmes.[17] The amount is the largest from an international donor in the business school's 102-year-old existence.

The recent The Brand Trust Report,[18] 2011 has ranked TATA as the second most trusted brands of India.

In a 2011 investor poll conducted by equity research firm Equitymaster, TATA Group was voted as the most trustworthy among the Indian corporate houses[19]. Over 61% of the respondents "showed their confidence in the Tata Group". The Tata Group retained its "Most Trustworthy" status in the 2012 edition of the poll.

Ratan Tata, the chairman of Tata Group.

One Tata project that brought together Tata Group companies (TCS, Titan Industries and Tata Chemicals) was developing a compact, in-home water-purification device. It was called Tata swach which means “clean” in Hindi and would cost less than 1000 rupees (US $21). The idea of Tata swach was thought of from the 2004 tsunami in the Indian Ocean, which left thousands of people without clean drinking water. This device has filters that last about a year long for a family of five. It is a low-cost product available for people who have no access to safe drinking water in their homes.[20] The advantage of this device is that it does not require the use of electricity.[21]

TCS also designed and donated an innovative software package that teaches illiterate adults how to read in 40 hours. “The children of the people who have been through our literacy program are all in school,” says Pankaj Baliga, global head of corporate social responsibility for TCS.[20]

In 1912, Tata Group expanded their CEO’s concept of community philanthropy to be included in the workplace. They instituted an eight-hour workday, before any other company in the world. In 1917, they recommend a medical-services policy for Tata employees. The company would be among the first worldwide to organise modern pension systems, workers’ compensation, maternity benefits, and profit-sharing plans.[20]

Trusts created by Tata Group control 65.8% of company shares,[22] so it can be said that about 66% of the profits of Tata Group go to charity.[23] The charitable trusts of Tata Group fund a variety of projects, for example the Tata Swach and the TCS project. They founded and still support such cherished institutions as the Indian Institute of Science, Tata Institute of Fundamental Research, the National Centre for the Performing Arts and the Tata Memorial Hospital. Each Tata Group company channels more than 4 percent of its operating income to the trusts and every generation of Tata family members has left a larger portion of its profit to them.[20]

After the Mumbai attacks, Salaries of then heavily attacked Taj Hotel employees were paid despite the hotel being closed for reconstruction. About 1600 employees were provided food, water, sanitation and first aid through employee outreach centres. Ratan Tata personally visited families of all the employees that were affected. The employee’s relatives were flown to Mumbai from outside areas and were all accommodated for 3 weeks. Tata also covered compensation for railway employees, police staff, and pedestrians. The market vendors and shop owners were given care and assistance after the attacks. A psychiatric institution was established with the Tata Group of Social Science to counsel those who were affected from the attacks and needed help. Tata also granted the education of 46 children of the victims of the terrorist attacks.[24][25]

Controversies, and Environmental record

Despite their public commitment to philanthropy the Tata group has attracted several controversies. Here are some:

Munnar, Kerala

The Kerala Government had filed an affidavit in the high court saying that Tata Tea had 'grabbed' forest land of 3,000 acres (12 km2) at Munnar. The Tatas, on the other hand, say they possess 58,741.82 acres (237.7197 km2) of land, which they are allowed to retain under the Kannan Devan Hill (Resumption of Lands) Act, 1971, and there is a shortage of 278.23 hectares in that. The then Chief Minister of KeralaV.S. Achuthanandan, who vowed to evict all government land in Munnar, formed a special squad for the Munnar land takeover mission and started acquiring back of the encroached government properties. However, later he had to abort the mission as there were many influential land grabbers and faced opposition from his own party.

Kalinganagar, Orissa

On 2 January 2006, policemen at Kalinganagar, Orissa, opened fire at a crowd of tribal villagers. The villagers were protesting the construction of a compound wall on land historically owned by them, for a Tata steel plant. Some of the corpses were returned to the families in a mutilated condition. When pushed for comment, TATA officials said the incident was unfortunate but that it would continue with its plans to set up the plant.[26]

Dow Chemical, Bhopal Gas Disaster

In November 2006, survivors of the Bhopal gas disaster were outraged by Ratan Tata’s offer to bail out Union Carbide and facilitate investments by Carbide’s new owner Dow Chemical. Tata had proposed leading a charitable effort to clean-up the toxic wastes abandoned by Carbide in Bhopal. At a time when the Government of India has held Dow Chemical liable for the clean-up and requested Rs. 100 crores from the American MNC, survivor’s groups felt that Tata’s offer was aimed at frustrating legal efforts to hold the company liable, and motivated by a desire to facilitate Dow’s investments in India.[27]

Supplies to Burma’s military regime

Tata Motors reported deals to supply hardware and automobiles to Burma’s oppressive and anti-democratic military junta has come in for criticism from human rights and democracy activists. In December 2006, Gen. Thura Shwe Mann, Myanmar’s chief of general staff visited the Tata Motors plant in Pune.[28] In 2009, TATA Motors announced that it would press ahead with plans to manufacture trucks in Myanmar.[29][30]

Land acquisition in Singur

The Singur controversy[31] in West Bengal led to further questions over Tata’s social record, with protests by locals and political parties(though the involvement of Mamata Banerjee's party is widely criticized as an act for political gains) over the forced acquisition, eviction and inadequate compensation to those farmers displaced for the Tata Nano plant. As the protests grew, and despite having the support of the Communist Party of India (Marxist) state government, Tata eventually pulled the project out of West Bengal, citing safety concerns. The Singur controversy was one of the few occasions when Ratan Tata was forced to publicly address criticisms and concerns on any environmental or social issue. Ratan Tata subsequently embraced Narendra Modi, the Chief Minister of Gujarat, who quickly made land available for the Nano project.[32]

Dhamra Port

On the environmental front, the Port of Dhamara controversy has received significant coverage, both within India and in Tata’s emerging global markets.[33][34]

The Dhamra port, a venture between Tata Steel and Larsen & Toubro, has come in for criticism for its proximity to the Gahirmatha Sanctuary and Bhitarkanika National Park, from Indian and international organisations, including Greenpeace. Gahirmatha Beach is one of the world’s largest mass nesting sites for the Olive Ridley Turtle and Bhitarkanika is a designated Ramsar site and India’s second largest mangrove forest. TATA officials have denied that the port poses an ecological threat, and stated that mitigation measures are being employed with the advice of the IUCN.[35] On the other hand, conservation organisations, including Greenpeace, have pointed out that no proper Environment Impact Analysis has been done for the project, which has undergone changes in size and specifications since it was first proposed and that the port could interfere with mass nesting at the Gahirmtha beaches and the ecology of the Bitharkanika mangrove forest.[36][37]

Protests by Greenpeace to Dhamra Port construction is also alleged to be less on factual data and more on hype and DPCL's (Dhamra Port Company Limited) response to Greenpeace questions harbours on these facts.[38][39]

Soda extraction plant in Tanzania

Tata group, along with a Tanzanian company, joined forces to build a soda ash extraction plant in Tanzania.[40] The Tanzanian government is all for the project.[40] On the other hand, environmental activists are opposing the plant because it would be near Lake Natron, and it could possibly affect the lake's ecosystem and its neighbouring dwellers.[41]

Tata was planning to change the site of the plant so it would be built 32 km from the lake, but the opposition still thinks it would negatively disturb the environment.[41] It could also jeopardise the Lesser Flamingo birds there, which are already endangered. Lake Natron is where two thirds of Lesser Flamingos reproduce.[42] Producing soda ash involves drawing out salt water from the lake, and then disposing the water back to the lake. This process could interrupt the chemical make up of the lake.[40] Twenty-two African nations are against the creation of the project and have signed a petition to stop its construction.[40]

Recognition

The international brand consultancy Brand Finance has ranked the $68-billion conglomerate, Tata Group, as 50th most valuable brand in the world. The most recent Global 500 report by Brand Finance shows that despite the controversies, Tata Group's brand value has soared to $15.08 billion for the current year compared to $11.2 billion last year in 2010.[43]

See also

References

  1. ^ "GEO and GCC". Tata Group. Retrieved 21 June 2009.
  2. ^ a b c d "FY of Tata Group". Tata Group.
  3. ^ "About us." Tata Group. Retrieved on 20 January 2011. "Contact Bombay House 24, Homi Mody Street Fort, Mumbai 400 001 India."
  4. ^ "Tata Companies". Tata Group. Retrieved 21 June 2009.
  5. ^ "A tradition of trust". Community Initiatives. Tata.com. Archived from the original on 23 May 2006. Retrieved 30 October 2006.
  6. ^ "Tata Family Tree". tatacentralarchives.com. Archived from the original (PDF) on 25 March 2007. Retrieved 2 June 2007.
  7. ^ Kneale, Klaus (6 May 2009). "World's Most Reputable Companies: The Rankings". Forbes. Retrieved 21 June 2009.
  8. ^ a b "The rainbow effect". 4 May 2008.
  9. ^ a b "India's Tata Group: Empowering marginalized communities". 4 May 2008.
  10. ^ a b "U.S. and Indian philanthropists recognized for conviction, courage and sustained efforts". 4 May 2008.
  11. ^ a b Timmons, Heather (4 January 2008). "Tata Pulls Ford Units Into Its Orbit". The New York Times. Retrieved 21 June 2009.
  12. ^ Tata becomes India's wealthiest group
  13. ^ "Our Heritage". Tata Group. Retrieved 21 June 2009.
  14. ^ Huggler, Justin (1 February 2007). "From Parsee priests to profits: say hello to Tata". The Independent. UK. Retrieved 21 June 2009.
  15. ^ Hazarika, Sanjoy (28 March 1991). "BUSINESS PEOPLE; Nephew to Take Over [[Tata Company]] in India". The New York Times. Retrieved 21 June 2009. {{cite news}}: URL–wikilink conflict (help)
  16. ^ "Ratan Tata gifts $50m to Cornell varsity". The Economic Times. India. 21 October 2008. Retrieved 21 June 2009.
  17. ^ "Tatas gift Rs220 crore to Harvard Business School – Mumbai – DNA". Dnaindia.com. 16 October 2010. Retrieved 2 February 2011.
  18. ^ http://www.financialexpress.com/news/a-matter-of-trust/747288/0
  19. ^ http://www.equitymaster.com/poll/Most-trustworthy-financial-reporting/index.asp Equitymaster poll 2011 results: Tatas most trustworthy
  20. ^ a b c d "Too good to Fail". February 2010.
  21. ^ "Tata Swach". 14 December 2009.
  22. ^ "Tata Group Heritage".
  23. ^ "Tata, Corporate Social Responsibility and Milton Friedman". 24 October 2005.
  24. ^ "Ratan Tata did for the Mumbai Terrorist Attack Victims". 14 May 2010.
  25. ^ "Salute to Ratan Tata". 8 April 2010.
  26. ^ by Nityanand Jayaraman (24 May 2006). "CorpWatch : Stolen for Steel: Tata Takes Tribal Lands in India". Corpwatch.org. Retrieved 16 July 2010.
  27. ^ [1][dead link‍]
  28. ^ ["Myanmar Ties." 8 December 2006. The Telegraph, Calcutta, India].
  29. ^ "India's Independent Weekly News Magazine". Tehelka. Retrieved 16 July 2010.
  30. ^ "Ansari visits Myanmar tomorrow, 3 MoUs to be signed". Zeenews.com. 4 February 2009. Retrieved 16 July 2010.
  31. ^ [www.rediff.com/money/2006/dec/09tata.htm]
  32. ^ "Singur's loss". Hinduonnet.com. 7 November 2008. Retrieved 2 February 2011.
  33. ^ ‘India – Tata in troubled waters’, Ethical Corporation, November 2007, London, UK
  34. ^ "India – Tata in troubled waters – Ethical Corporation". Ethicalcorp.com. Retrieved 16 July 2010.
  35. ^ http://www.tatasteel.com/dhamra-port-project-and-olive-ridley-turtles.doc
  36. ^ "Documents And Reports | Save the turtles". Greenpeace.in. 12 June 2009. Retrieved 16 July 2010.
  37. ^ "Sea dredging affecting Olive Ridley turtles, says green body". Thaindian.com. 5 April 2008. Retrieved 16 July 2010.
  38. ^ http://www.eco-dhamra.com/environment/pdf/Greenpeace20Reply_July'07.pdf
  39. ^ http://www.eco-dhamra.com/environment/pdf/Greenpeace20Reply_8thMar08.pdf
  40. ^ a b c d "Dar annoys neighbours over $400m soda ash project". The East African. Nation Media Group. 5 November 2007. Retrieved 21 June 2009.
  41. ^ a b Magubira, Patty (16 May 2008). "Tanzania: UK Activists Pile Pressure Against Soda Ash Project". The Citizen. Dar es Salaam: AllAfrica.com. Retrieved 21 June 2009.
  42. ^ Pathak, Maulik (31 October 2007). "Tata Chemicals' African safari hits green hurdle". The Economic Times. India. Retrieved 21 June 2009.
  43. ^ http://www.rediff.com/business/slide-show/slide-show-1-nine-indian-brands-amongst-worlds-500-best/20110324.htm

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