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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?

Seventy-year-old Ratan Tata—who lives in a self-designed bungalow in Mumbai with his dogs Tito and Tango— is the main guardian of the Tata philosophy within the firm. But he’s also the last Tata scion who’ll lead it, for there is no successor in the family.

Asked in a BusinessWeek interview early this year what the successor to his throne will have to possess, the mild-mannered tycoon replied, “Values. You could play the game that others play, and you would probably grow faster and you would probably be more profitable, but you’d be just like everyone else.”

This leaves unanswered the question of how the ethics in Tata’s business model will hold up in the global economy. After all—66 percent of shares in the possession of charities, $40 million a year spent running a model city of hundreds of thousands of people with no relationship to Tata Steel—in 2008, it all seems expensive, inefficient and far too idealistic.

On a small scale, cracks are already visible in the Jamshedpur city model, where in the past few years, thousands of people have settled in slums outside the city’s green zones, drawn as if to an oasis in the desert. Funds from the trusts can be used to better their living situations—and currently are—but they could also be appropriated for a new international takeover, which would cost billions.

Sengupta, of Tata Steel, has an answer to that: “You Westerners see it only from a cost perspective. But our values, trusts and philosophy are the DNA of our group. That’s what Tata is, in good times and bad times, in India or abroad.”

JACK LEENAARS is a journalist who lives in New Delhi, India.

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