Tata’s Top Executive Embraces Philanthropy

He is the most generous overseas donor to Harvard Business School to date, not to mention the chairman of the largest Indian conglomerate company, but Ratan N. Tata remains an understated man.

According to both American and Indian intellectuals, humility and integrity are the two distinctive traits of a man considered nearly as powerful as the greatest political leaders in India.

For instance, the Tata Group billionaire refuses to let others carry his bag for him, according to Harvard Business School Professor Krishna G. Palepu, who has worked with Tata personally.

“We’re talking about a businessman who the current Indian prime minister publicly praises—and the leader of a company that commands the respect of the country,” Harvard Business School Professor Karthik Ramanna says.

In his nearly 20 years as chairman of Tata Group—India’s largest conglomerate that boasts holdings of over 200 companies—Tata has expanded the industrial empire’s international and domestic reach without “playing the bribery game,” according to Fareed Zakaria, editor-at-large of TIME Magazine.

Zakaria, who has spoken extensively with Tata, says that the $50 million donation to the Business School is part of Tata’s general efforts at expanding the international scope of his conglomerate.

“Tata is ultimately a worldwide company, so the Harvard Business School is a natural place to make an impact,” Zakaria says. “There are lots of things that they do in India, but this was an unusual opportunity; this was a way to establish the Tata name in a global context.”

SIZEABLE SUM FROM AN ALUM

Tata’s $50 million donation to the Business School will be used to develop a new building called Tata Hall. The structure will house classrooms and residential space for the school’s executive education program, which trains professionals in an accelerated management program and is currently housed in MacArthur and Baker Halls.

Because of the global reach of the executive education program, from which Tata graduated in 1975, the benefits of his donation “extend far beyond HBS,” Harvard Business School Dean Nitin Nohria says.

“Executives come to our programs here in Allston,” Nohria writes in a statement. “They learn from our faculty and one another, and then they return to their companies with new and improved skills.”

“Since this process will be repeated year after year, over time the benefits from the ripple effect will be enormous,” Nohria adds.

Harvard Business School Assistant Professor Lakshmi Ramarajan says she believes that Tata’s gift not only reflects the businessman’s relationship with the program as an alum, but also his role as a global leader and citizen.

“His gift has tremendous importance in understanding how he sees himself a global citizen,” Ramarajan says. “Charitable giving and many of these kinds of acts of generosity often have to do with how we see ourselves.”

MORE THAN A LEADER

Tata has gained more global recognition for his contributions to the Tata Group. During his tenure as chairman, he increased the corporation’s market share in respective industry markets and its market capitalization to a combined $80 billion.

Tata Group is “pretty much in every industry,” says Rohit Deshpande, a professor of marketing at the Business School.

Tata Group, considered a crucial part of the development of the entire country, is the leading presence in various industries, such as steel, automobile, information technology, and hotels, according to Deshpande.

“It’s almost impossible to overestimate the economic footprint of the Tata companies in India,” Deshpande says, calling the Group “a huge global player.”

The Group is comprised of more than 100 companies, one of the oldest of which is Taj Hotels Resorts and Palaces, which recently bought the Ritz-Carlton Boston in 2006 and renamed it as the Taj Boston. Industrial giant Tata Motors recently bought Jaguar Land Rover in 2008, and multinational Tata Steel purchased the large Anglo-Dutch steel company Corus in 2007.

“[Tata] was able to transform all these companies into becoming much larger institutions,” Zakaria says. “All these companies [within Tata Group] are becoming world-class companies.”

In particular, Tata won much praise for developing the Tato Nano, a car that costs $2,500 and is marketed for the “ordinary man,” according to Palepu, who says that this demonstration of empathy is unique at such a high executive level.

A HIGHER STANDARD

When Tata announced that he would market a car that would sell for under 100,000 rupees ($2,500), his mission was to manufacture an affordable car to sell to the lower classes in India.

“All you need to do is look at a family of four sitting dangerously on a two-wheeler as it drives through slippery roads flooded with rain to understand why this car is so significant,” Palepu says. “[Tata] is probably the simplest executive with the most amount of empathy that I have met—and that empathy is what allowed for this car to happen.”

In spite of its juggernaut size, Tata Group has been equated with commitment to service and integrity, many say.

“He cares about his country, his company, and his employees,” Nohria says. “And no organization in the world has a greater commitment to integrity and doing things ‘right.’”

The company is itself controlled by a collection of non-profit, charitable trusts, to which two-thirds of the profit of these companies contribute. This collection of trusts sponsors free cancer hospitals and education through grants and scholarships.

“This is a company that has a very solid reputation for doing good,” Ramanna says.

Professors note that this reputation is particularly noteworthy in a country that is riddled with high-profile corruption debacles.

“Tatas are known for values,” writes Sunita Singh-Sengupta, professor in management studies at Delhi University, in an e-mail.

“The moment any one who is familiar with the name, sees his photo image anywhere—the only thing that comes to one’s mind is respect, integrity, honesty, and contribution beyond business,” Singla writes.

The high regard that Tata has attained for himself all throughout India has only been amplified by his recent contributions to Harvard Business School.

“As a person of Indian origin,” Palepu says, “his donation makes me really proud to have someone like Mr. Tata step up and show the kind of commitment to Harvard Business School.”

—Staff writer Gautam S. Kumar can be reached at gkumar@college.harvard.edu.

—Staff writer Xi Yu can be reached at xyu@college.harvard.edu.