Inside the Tata Group - a multinational giant conglomerate run by one family

One of the most successful business houses in the world has its headquarters in India. The Tata group has been in the news a lot recently. Yet despite the status of Tata steel concerns in the UK grabbing headlines on a weekly basis, the company is thriving and there are regular announcements about its latest developments or expansion in new areas. Tata is always surprising analysts with innovation.

The building blocks of what would become the Tata Group were laid in 1868 by Jamsetji Nusserwanji Tata [below]. He was 29, and had learnt the basics of  business while working in his father’s banking firm - when he established a trading company in Bombay.

Jamsetji Tata was an entrepreneur with a vision, a philanthropist who loved his country. He played a pioneering role in the industrialisation of India. Tata created businesses in sectors such as steel, energy, textiles and hospitality. The success of Tata is worldwide and there are few who have not sampled any aspect of it at some point.

To take just one example, Tata’s Taj Group of hotels are known for their luxury, efficiency, reliability, luxury and comfort. Today Tata hotels, known as the Taj Group, are famous all over. Tata is a legendary brand in India that is held in high respect for its strong family ethics in work, education and philanthropy.

Empress Mills, a textiles business set up in central India in 1877, was the first of the large industrial projects organised by the Tata group. Jamsetji Tata was passionate about putting into practise the three great ideas of his life: creating an iron and steel company, generating hydroelectric power and giving birth to an institution that would tutor Indians in the sciences.

None of these ideas materialised while Jamsetji Tata lived, but they were realised by those who succeeded him.

In 1892, Jamsetji Tata created the J.N.Tata Endowment to encourage Indian scholars to pursue higher studies. It was the first of many philanthropic initiatives by the Tata Group. Over generations, members of the Tata family have handed down much of their personal wealth to the many trusts they originated.

Today, these trusts control 66 per cent of the shares of Tata Sons, the holding company of the group, and they support different causes, institutions and individuals.

Read: Do parents make more successful leaders?

The Taj Mahal Hotel in Bombay opened in 1903. Legend has it that Jamsetji Tata set his mind on building it after being denied entry into one of the city's fancy hotels for being an Indian. It is so iconic it was the unfortunate target of a murderous terrorist attack in 2008 but has now largely been rebuilt.

After Jamsetji Tata’s death, the chairmanship of the Tata group passed to the elder of his two sons, Sir Dorabji Tata, who turned his father’s ideas into reality. (The younger of the two sons was Sir Ratanji Tata.)

Sir Dorabji was the power behind the setting up, in 1907, of the Tata Iron and Steel Company. After seven years, India's first iron and steel plant, in the eastern part of the country, started production. Sir Ratanji assisted in making the Tata Iron and Steel Company the largest privately owned steelmaker in India.

In 1915, the Tata group again broke a record by generating hydroelectric power from a site near Bombay.

In 1911, the dream of establishing an institution where Indians could cultivate their scientific temper was realised. The Indian Institute of Science, set up in Bangalore, would nurture some of the brightest minds in the country.

It was the first of a clutch of Tata supported centres of learning and research.

Read: Is entrepreneurship in your genes?

Tata companies employ over 581,000 people worldwide. Tata Steel introduced eight-hour working days in 1912, well before it became statutory in much of the west, and the first Tata provident fund scheme was started in 1920. The Tata townships, and the facilities they have, are another example of the way in which the Group cares for its employees.

When Sir Dorabji died in 1932, one of the founder’s nephews, became chairman of the Tata Group.

On his death in 1938, Jehangir Ratanji Dadabhoy Tata , whose father, R.D. Tata, had been a cousin and partner of the founder, became chairman.

J.R.D. Tata founded Tata Airlines in 1932 It was nationalised a year later and divided up to form India’s chief domestic and international air carriers: Indian Airlines Corporation and Air-India, respectively.

By the late 1950s the Tata Group controlled the largest single bulk of Indian industry. J.R.D. Tata was succeeded as chairman by his nephew, Ratan Tata [right], in 1991. 

Ratan expanded the Tata Group, acquiring such companies as the London-based Tetley Tea in 2000, and the Anglo-Dutch steel manufacturer Corus Group in 2007. In 2008 he oversaw Tata Motors’ purchase of British car brands Jaguar and Land Rover from the Ford Motor Company. In 2012 Ratan retired as chairman and was succeeded by Cyrus Mistry.

It is rare for one family to successfully dominate a company for so many generations and for the company to grow from strength to strength. While we may never know about bitter internal rivalries that may have occurred between relatives and colleagues, the fact that family members ran the show meant that the original spirit of J.N.Tata was always kept in mind as a guiding principle.

This is a guest blog and may not represent the views of Virgin.com. Please see virgin.com/terms for more details. Thumbnail from gettyimages.

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