Can the Good Guys Prosper?
When Ratan Tata, former Chairman of Tata Sons died at
the age of 86 on 9 October 2024, it felt like someone personally important had
left the stage. I never met Mr. Tata but I had the privilege of interacting with
Tata Brand on several occasions, including doing a very small PR job for them
back in 2019, when I helped to get some coverage for Tata Crucible, a quiz
event that Tata Sons organized in Singapore.
Given that I’ve had several interactions with the Tata
Brand, I thought I’d try and see what it was that made them so special. I mean,
Tata is undoubtedly a behemoth by any standards. Back when Mr. Ratan Tata was at
the helm, the group was valued at around US$400 billion, which the Indian media
took great pleasure in pointing out, larger than the GDP of Pakistan, India’s
perpetual rival in just about everything (Or as one Indian executive said “Partner
in Destructive Competition.”)
However, these are things you could probably say about
any company. What makes the Tata particularly unique is the fact that, as far
as corporate entities are concerned, they known as the “good guys.” No other
firm in India has the reputation that Tata has. The entire commercial organization
is known for being “good.” Let’s look at the great American philanthropist of
the last two decades, who have given away billions to causes. All of them,
started out as ruthless businessmen before they became good guys. Bill Gates for
example was known as ruthless monopoliser in the IT space before he became the
world’s nicest guy.
Despite the economic dominance of the Tata Companies, Ratan
Tata was never on anyone’s rich list. In fact, nobody in the Tata family is (this
is not to say that they’re living normal middle-class lives). The nearest rival
to the Tata Group is the Reliance Industries, which has made its chairman,
Mukesh Ambani, one of the richest men in the world with a net worth of some US$107
billion. Mr. Ambani is known for being the owner of the world’s most expensive
private house and host of the most expensive weddings.
So, whilst Tata and Reliance are around the same size,
how is it that the family behind Reliance has acquired so much wealth whilst
the Tata’s avoided the “wealth” of the Ambani’s? Well, if you look at the amount
the Tata’s have given away, its around US$102 billion, which is nearly the same
as Mukesh Ambani’s net worth:
So, are the Tata’s more inclined to being nice when
compared to everyone else? Well, the answer may lie in the fact that even if
there was a Tata who wanted to be a greedy little p****, he’d (they usually
are), the corporate structure of the Tata Group is ultimately controlled by a charitable
trust. Tata Trust controls some 66 percent of the Tata Group.
Tata Trust, works on delivering a number of
philanthropic services to India and the wider world:
https://www.tatatrusts.org/about-tatatrusts
https://www.ft.com/content/5a405ffe-e9ef-4ebf-9203-ce2283f6d203
In a way, the closest comparison is Bertelsmann in Germany,
which dominates the German and European media market. The majority of shares
are owned by private foundations and charitable trust. Bertelsman has revenues
of around 20 billion Euros a year.
In a way, the most interesting thing for the world,
will be for companies like Tata and Bertelsman to become case studies of how
companies can be “good” and “prosperous.” They’ve made the relationship between
non-profit foundations and businesses work. Ultimately, the world becomes a
better place when companies prosper by doing good.
No comments
Post a Comment