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Added values

The Tata Group, India’s largest conglomerate, spends millions each year on education, renewable energy, health care and charity. Can the Tata brand of compassionate capitalism take on-and take over-the global economy?

Against a background of imposing steelworks chimneys, the offices and green parks of Jamshedpur are graced with statues: of Jamsetji, naturally, but also of J.R.D. Tata, who led the firm more than 50 years ago and under whose direction it became involved in so many industries. Almost without exception, the statues are respectfully draped with fresh flowers.

From its Jamshedpur base, the Tatas’ business model developed into an example of a compassionate brand of capitalism. “Their social responsibility has always distinguished itself from other people’s, and still does,” says Meera Mitra, a development specialist and author of It’s Only Business: India’s Corporate Social Responsiveness in a Globalized World, published last year. “The Tatas are not unique in engaging in philanthropic activities in India. But while others focus on ‘patchwork philanthropy,’ the Tatas focus on constructive philanthropy.”

What she means is many charities feed and help the very poorest, while Tata, by contrast, focuses on sustainable development, setting up and supporting institutes and schools that help the country thrive in the long term. “The Tatas were the first to have institutionalized it into their corporate business,” she says.

At every level of the Tata Group, initiatives and instruments are developed to safeguard and encourage the company philosophy. Thus, a list was drawn up containing 25 provisos to which all Tata companies and their employees must adhere: no taking bribes; no supporting political parties; all business activities must benefit the country.

To ensure compliance, an ethics counselor—a kind of ombudsman—is appointed at every Tata company. Rekha Seal has fulfilled the function at Tata Steel in Jamshedpur for five years. “It is a position of trust where wrongs within the company can be broached at all levels,” says Seal, who wears a green sari. Her motto hangs in a frame behind her on the wall: We Manage with Trust.

“To keep our values means that it’s a matter of surviving on the long term,” Partha Sengupta, Tata Steel’s vice-president of business services, adds later in the company’s guest accommodations. He’s tired after a long trip that morning to the iron ore mines over dusty, potholed roads. “Instead of us compromising on our values, [the Tata model] is taking over the world.”

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