Businesses thriving in harsh environment have an ideal higher than personal profit. There is a common thread that drives them forward for years. This common thread is represented in the core values established by the founding fathers. Businesses that integrate people with the broader goal of sustainability by this common cord are those that live. There is a pioneer of these value driven business practices in the history of corporate India, the TATA group. Understanding the journey of Tata group in the perspective of HR practices can help us examine the role of people or employees in the success of an organization. For this let us understand the core values of the founding father of this business community.
Jamsetji started the business when India was entering the final phase of colonization. Having met with obstruction and harassment in pre-independence India he adopted a new ideal for his business ‘Community capitalism’. According to eminent Japanese scholar Haruo Funabashi ‘Jamsetji had a more holistic perspective, however. His focus was not the trees but the forest—that is, not the individual stakeholders but the community in the largest sense’.
All his efforts whether building a world class hotel or sprawling townships, had been aimed at the greater good of community and nation. Community capitalism is a ‘people first’ approach to business. Jamsetji was the stalwart of HR innovations. In a time when workers were treated as ‘Cogs in wheel’, he voluntarily considered their functional limitations. He provided them with benefits like eight hour working day, free medical aid and maternity benefits long before the government mandated these provisions. By aligning his business aspirations with nation building he engaged in greater community development. All this contributed towards creating a motivated workforce.
The ideals of Jamsetji were carried forward by subsequent Tata leaders. Each leader synergized these core values with new ones that were the call of his times. JRD Tata sometimes referred to as 'Chairmen’s chairmen’ brought about a ‘value shift’ in the HR practices. He was a strong believer in a merit and believed in professional management of the group companies. It was this conviction that led him to steer the policies from Human Resource management to Human Resource development by nurturing leaders. His commitment to merit and professionalism ultimately led him to form Tata Administrative services and Tata Management training centre that became breeding grounds for future business leaders. His vision served the group well. Russi Mody, Sumant Moolgaokar and Darbari Seth became beacons of Tata leadership and were instrumental in generating wealth for the group and the country.JRD also understood the crux of successful labour relations.
Tata steel became one of the first companies to have a dedicated Human resource department to make workers feel valued after there were frequent tense labour situation despite being treated exceptionally well; indicating worker discontent. JRD was quick to sense that workers had started to feel like parts of a machine. So he made them feel wanted by forming a department just for them. This is why Tata group is considered champions in personnel relations.
The next generation witnessed Ratan Tata’s phenomenal leadership that coincided with unprecedented economic liberalization in India. He envisioned a strategic plan of institutionalizing a stronger collective identity of the Tata group in changing times. The new value he created can be held as ‘Osmosis’, a process of conveying cultures, beliefs and values across group. Efforts like displaying a common logo helped to ingrain common ethos in all Tata companies. But a bigger change had to be dealt with too, The Changing employee aspirations.
Ratan Tata soon realized that the generation of employees he is dealing with wanted personal growth and career advancement. Ratan Tata aligned these personal pursuits with business goals by HR practices that can fall under ‘Disruptive innovation’. Integrated HR system, BSC, Brockbank model, HR gurukul, TBEM etc are all part of this alignment. Some may argue that such performance oriented system is against the core values of Jamsetji, who never believed in punishing the weak and rewarding the strong. But it cannot be ignored that with their present policies Tatas do reward the best but do not punish the weak. Performance based layoffs in Tata group are highly uncommon. To sum up Ratan Tata’s vision of Osmosis has only strengthened the foundations of Tata values across group. This belief is mirrored in the chivalry displayed by the Taj hotel staffs during the terrorist attack that was preceded by similar acts of the staff of another Taj group hotel in Maldives during the Tsunami in 2004.
The future for both these companies throws the challenge of working in a Flat world. With the Tatas going global with M&As and software industry expansion communicating common values across cultures has become a problem. HR initiatives to meet this challenge are yet to be seen. The future roadmap for HR practices in the Tata group should account for the cultural dimension. The HR heads should also be prepared for a new generation of potential employees that is being prepared by a changed society and educational environment. Gauging needs and ambitions of this generation is especially important. Moreover with a change in top leadership this year speculations are high on the changes in HR management of Tata group
Toward a Sustainable Business Model for the 21st Century Haruo Funabashi
www.tata.com – visited on 10 September 2012
----------------------- BEST PRACTICES IN HR- THE JOURNEY OF TATA GROUP
‘THE OSMOSIS’ – PERPETUATING CORE VALUES ACROSS COMPANIES AND CULTURES IN TATA GROUP
‘THE VALUE SHIFT’-FROM HUMAN RESOURCE MANAGEMNET TO HUMAN RESOURCE DEVELOPMENT
‘COMMUNITY CAPITALISM’- BUSINESS AIMED AT COMMUNITY BASED DEVELOPMENT FORNATION BUILDING
‘In a free enterprise, the community is not just another stakeholder in business, but is in fact the very purpose’ –Jamsetji Tata
“To be a leader, you have got to lead human beings with affection” – JRD TATA
‘’One hundred years from now, I expect the Tatas to be much bigger than it is now. More importantly, I hope the Group comes to be regarded as being the best in India, best in the manner in which we operate, best in the products we deliver and best in our value systems and ethics’’ – Ratan Tata