JRD Tata and Management

When talking about India’s greatest leaders, one name just cannot be skipped J.R.D. TATA. For decades the sole Indian businessman, global leaders had ever heard of, was Tata.

It’s different today the Sunday Times, Forbes and even the hallowed Harvard Business Review now carries articles written by Indian mgt. gurus on Indian case studies. But for years the world passed India by. Only J.R.D. Tata made an impact.

When J.R.D. became chairman of Tatas in 1938, British firms dominated the environment, but the House of Tata towered above all others. It had 14 companies with sales of Rs. 280 crores.

The year he died, 1993, it was still India’s biggest business house. Sales had mushroomed to Rs. 15000 crores and there were over 50 large manufacturing companies besides innumerable holdings and concerns. He was a distinguished and respected industrialist who was also awarded the “BHARAT RATNA”, remarkable achievement.

What sort of value system made the great man achieve his greatness?
Following is an analysis of some of the virtues & vices, which J. R. D. displayed through the course of his eventful life:

Virtues:

• Approachable: J.R.D. had no problems making friends easily. He had one of the most comfortable personalities that was probably his benchmark of becoming a successful individual.
• Diplomatic: One of the most difficult talents is to say ‘no’ in a nice manner. But Diplomacy was never a problem for J.R.D. Even when he was angry at Nehru for going against industrialists, he was never rude but made his point diplomatically and walked away friends.
• Realistic: J.R.D. never plunged into unviable projects, howsoever exciting they might be. He briefly flirted with the idea of making bombers with “Tata Aircraft”—but despite his love for flying, he shot down the project himself when it became clear that there was no money to be made.
• Charismatic: When J.R.D. was elected chairman of the group, there was no question about the selection. There was no one else who could have been chosen by the board. J.R.D. by then was a hero. The daring pilot, the shrewd businessman. He was already outstanding.
• Courageous: J.R.D. had always supported Nehru’s views on socialism. Something that the board of Tata sons did not agree with. But J.R.D. refused to sign the manifesto against socialism. It must have required considerable courage for a 30- something to stand up for views, which differed so widely from those of the old guard.
• Compassionate: People talk of Russi Mody but he manipulated people. J.R.D. genuinely felt for workers. His approach to labor was that of Fabian socialism. After J.R.D.’s entry, the management of Tisco changed its policy of confrontation. The trade union became not only acceptable but also an association which was vital to the interests of the workers.
• Supportive towards innovation: Apart from his supportive attitude towards Tisco’s lab technicians, perhaps Tata chemicals provides the best demonstration of J.R.D.’s willingness to support innovation in his business and among his managers.
• Aware of a sense of responsibility: There were opportunities for J.R.D. where he was tempted to joined politics. But he rationalized to himself by concluding that he could do more for the country in business and industry than in politics. He says, “I had no doubt that freedom was on its way. But who knows, I might one day have an opportunity to serve in more useful ways than by going to jail today!
• Committed to values: J.R.D. never believed in paying under the table for getting a license approved. He never believed in exploiting the workers, society and earning more profits. It was believed that wealth and respect are disjoint. J.R.D. was considered to be an exception to this rule
• A visionary: J.R.D. was the only director on the board of the Tata group who supported Ratan Tata’s plan to enter high investment high risk industries like oil manufacturing & computers. He believed, that being that stalwart business house of India, such investments were a responsibility.

Vices:

• Conservative: J.R.D. always preferred the more conservative approach. His conservativeness left Tisco unprepared for the outbreak of the second world war and the license-permit raj of free India.
• Aloof: Unlike G.D. Birla, J.R.D. had kept aloof from the congress leadership. For a group that depends as much as the Tatas did on government patronage, this was a major lacuna.
• Bad tempered: Instead of trying to patch up the differences, J.R.D. withdrew into himself. He rejected Nehru’s invitations to the UN session in Paris, and the invitation to lead Indian Rare Earths, one of the first PSU’s. J.R.D. forgot the Public Relations implications of these prestigious invitations and the signals his refusal emitted.