Ratan Tata: How Enterprise Can Be a Force for Good in Society

Ratan Tata's virtues far outweighed his faults; so, even his toughest critic would encounter the dominant view that Ratan Tata’s life and career was a huge force for good—both for enterprise, public governance, and for society

R Gopalakrishnan

Ratan Tata’s departure from amongst us has been widely commented upon. As per the expected norm, almost all that has been written or commented are tributes. A tribute is distinct from an obituary, which purports to analyse the persona and strengths/weaknesses of the person. A serious obituary would surely include references to his or her peccadillos or idiosyncrasies. This is the reason why an intellectual might argue that Ratan has been eulogised to a fault. It is not the intent of this piece to discuss this view.

Truth be told, Ratan did have faults like the best among all of us. However, his faults were of a micro nature. They were visible only to those who interacted with him closely, just like the faults of a spouse appear clear to the person who is close much of the time. His virtues far outweighed his faults; so, even his toughest critic would encounter the dominant view that Ratan Tata’s life and career was a huge force for good—both for enterprise, public governance, and for society. What was this huge force for good that Ratan practiced and was a votary of?

Ratan believed deep within his heart that responsible enterprise is a force for upliftment of society.  Some of his ‘failed’ projects can be mentioned as the successful ones are operational testimonies to his predilection. Here are three examples.

Were he not committed to community-centricity he would not have considered Bengal for his ambitious NANO plant. He imagined the beneficial force that an automobile factory could be for the re-industrialization of a once industrialized state like Bengal. It is a different matter that the plan did not fructify in the manner that TATA group had visualized.

Ratan’s attitude and behaviour was akin to JRD Tata’s when in the 1950s, JRD was advised that Tata cannot make the Tata Chemicals factory in Mithapur successful. Critics said that the factory was in the wrong place with the wrong technology at the wrong time. JRD said Tata would persist because when Tata invest in any location, they raise the hopes of the people there. Ratan had the same approach to locating a plant in Singur.

As a second example, consider his master plan in the early 2000s to invest USD 3 billion in Bangladesh. It is an example of the same instinct. Tata could put up an integrated, mutually supporting clutch of three plants—a steel plant, a power plant, and a urea plant. The employment creation and economic do-good for that nation was actively mentioned in advocacy efforts, while, of course, the project would derive synergies from Tata steel, power, and urea plants in India.

Here again, risks were matched against social returns, with the foresight that economic returns would come in due course consequently. Unfortunately, the response from Bangladesh suppressed the project idea and few recall the attempt today. However, it does symbolize the community-centricity of Ratan Tata, indeed the group.

A final example is the NSAM (natural soda ash mining) project in Tanzania. On the banks of their Lake Natron, Tanzania had reserves of natural soda ash. Mining and beneficiating such a resource would deliver low cost, environment-friendly sodium carbonate. The more conventional method for soda ash was to produce through SSAM (synthetic soda ash manufacture), a costly chemical process that uses lots of energy.

The involved company, Tata Chemicals, was mandated to spend the required money to investigate the economic and do-good of the project. While expenses in spades were being incurred, a message alerted the company to the likelihood that such a project, if implemented, would disturb the natural habitat and nesting habits of the little flamingo bird. After board and leadership discussions on emerging facts, the project was stopped, and a write-off was taken in one single quarter. Why? Because the little flamingo could not become extinct because of a Tata project even if the project made money!

It would be a fitting tribute to Ratan Tata if Indian industry would commit itself once again to thinking, behaving, and acting with the concept of ‘perpetual value’ rather than only ‘economic value.’ This means that enterprise is an essential source of good for the public and community.

R Gopalakrishnan is an author, former Director, Tata Sons and former Vice Chairman, Hindustan Lever. Views are personal and do not represent the stand of this publication.