Source: https://www.businesstoday.in/bt-tv/easynomics/video/jamsetji-tata-the-learnings-for-corporate-success-439794-2024-08-01

The post Jamsetji Tata & The Learnings For Corporate Success appeared first on The MindWorks.

He had started the ‘Tata Line’, the first ever business of the Tata Group which bore the Tata name, with a view to challenge the monopoly of the English P.&O., the pre-eminent shipping line that carried exports from India during the 1880s and 1890s.

The English P.&O. which had the support of the then British India government, had a virtual monopoly on shipping from India and charged Indian merchants exorbitant freight rates, while providing greater rebates on British and Jewish firms thereby creating an uneven playing field for Indians, according to the book titled ‘Jamsetji Tata – Powerful Learnings For Corporate Success’.

“Jamsetji Tata, who was in the textile business at that time, was adversely impacted, and he felt that this was very unfair to Indians,” wrote the authors, R Gopalakrishnan and Harish Bhat, two Tata group veterans, in their recently released book published by Penguin Random House India.

The pioneer of modern Indian industry then travelled to Japan to strike a collaboration with Nippon Yusen Kaisha (NYK), the largest shipping line of that country, which agreed to partner provided Jamsetji took “an equal risk in the venture and ran the ships on his own”.

Afterwards, he chartered an English ship ‘Annie Barrow’ at a fixed rate of 1,050 pounds per month and made it the first vessel of the new shipping company, which he called the ‘Tata Line’ — this was the first ever business of the Tata Group which bore the Tata name.

Jamsetji felt that this venture would benefit not only his textile business but also the entire Indian textile industry through lower shipping rates of Rs 12 per tonne of freight as compared to Rs 19 per tonne charged by P.&O and break the latter’s monopoly.

A second ship ‘Lindisfarne’ was also chartered soon afterwards.

The Tribune newspaper in October 1894 wrote that Jamsetji’s effort had “been the subject of general praise in the industrial centre of India”.

P.&O. reacted immediately “announcing that it would reduce rates dramatically Rs 1.8 per ton. However, merchants could obtain this rate if they signed an agreement with P.&0. that they would not use the Tata Line or ships belonging to NYK”.

The English shipping line had also offered some specific merchants to carry their cotton to Japan free of charge, while starting to disparage Tata Line spreading word that one of its ships ‘Lindisfarne’ was unfit to carry cotton.

Jamsetji took up with the British Indian government against the unfair practices of P.&O. in vain.

Gradually, Indian merchants withdrew from their contracts with Tata Line despite Jamsetji’s warning that if his shipping company closed, P.&O. would raise rates steeply one again.

The ‘War of Freights’ between Tata Line and P.&O. spread even to newspapers when anonymous letters were published in local newspapers questioning Jamsetji’s “patriotic motives in starting the Tata Line’.

He had already spent over Rs 1 lakh on Tata Line and each month the business was “costing him losses running up to tens of thousands of rupees” which were very large amounts in the 1980s.

Jamsetji was deeply distressed but thought through the situation deeply.

“At the end of this strategic reflection, he appears to have reached the conclusion that there was no sustainable or feasible way forward for Tata Line,” according to the book.

He then decided, quite clinically, to shut down this business, notwithstanding the risks this closure could pose for his reputation as a very successful entrepreneur.

“He sent back to England the ships he had leased, and the Tata Line was, sadly, shut down.”
Most of Jamsetji Tata’s ventures — Empress Mills, Svadeshi Mills, Ahmedabad Advance Mills, Tata Steel and Tata Power — succeeded. The Tata Line is the one that did not.

“The story of this venture, Jamsetji’s initial vision as well as his decision to exit from it when he saw no ray of hope, as the industry was dominated by an unfair monopoly strongly supported by the then government, tells us that he did not shy away from making the right strategic choices untainted by emotions,” wrote the authors.

Soruce: https://www.business-standard.com/india-news/when-jamsetji-did-not-shy-away-from-shutting-the-1st-biz-of-tata-group-124080400135_1.html

The post When Jamsetji did not shy away from shutting the 1st biz of Tata Group appeared first on The MindWorks.

Known for the successful ventures he established, Jamsetji Tata, founder of the Tata Group, did not shy away from taking tough calls and making strategic choices to exit from unviable business as shown by the shutting of Tata Shipping Line in the 1890s, according to a new book.

He had started the ‘Tata Line’, the first-ever business of the Tata Group which bore the Tata name, with a view to challenge the monopoly of the English P.&O., the pre-eminent shipping line that carried exports from India during the 1880s and 1890s.

The English P.&O. which had the support of the then British India government, had a virtual monopoly on shipping from India and charged Indian merchants exorbitant freight rates, while providing greater rebates on British and Jewish firms thereby creating an uneven playing field for Indians, according to the book titled ‘Jamsetji Tata – Powerful Learnings For Corporate Success’.

“Jamsetji Tata, who was in the textile business at that time, was adversely impacted, and he felt that this was very unfair to Indians,” wrote the authors, R. Gopalakrishnan and Harish Bhat, two Tata group veterans, in their recently released book published by Penguin Random House India.

The pioneer of modern Indian industry then travelled to Japan to strike a collaboration with Nippon Yusen Kaisha (NYK), the largest shipping line of that country, which agreed to partner provided Jamsetji took “an equal risk in the venture and ran the ships on his own”.

Afterwards, he chartered an English ship ‘Annie Barrow’ at a fixed rate of 1,050 pounds per month and made it the first vessel of the new shipping company, which he called the ‘Tata Line’ — this was the first ever business of the Tata Group which bore the Tata name.

Jamsetji felt that this venture would benefit not only his textile business but also the entire Indian textile industry through lower shipping rates of ₹12 per tonne of freight as compared to ₹19 per tonne charged by P.&O and break the latter’s monopoly.

A second ship ‘Lindisfarne’ was also chartered soon afterwards.

The Tribune newspaper in October 1894 wrote that Jamsetji’s effort had “been the subject of general praise in the industrial centre of India”.

P.&O. reacted immediately “announcing that it would reduce rates dramatically ₹1.8 per ton. However, merchants could obtain this rate if they signed an agreement with P.&0. that they would not use the Tata Line or ships belonging to NYK”.

The English shipping line had also offered some specific merchants to carry their cotton to Japan free of charge, while starting to disparage Tata Line spreading word that one of its ships ‘Lindisfarne’ was unfit to carry cotton.

Jamsetji took up with the British Indian government against the unfair practices of P.&O. in vain.

Gradually, Indian merchants withdrew from their contracts with Tata Line despite Jamsetji’s warning that if his shipping company closed, P.&O. would raise rates steeply one again.

The ‘War of Freights’ between Tata Line and P.&O. spread even to newspapers when anonymous letters were published in local newspapers questioning Jamsetji’s “patriotic motives in starting the Tata Line’.

He had already spent over ₹1 lakh on Tata Line and each month the business was “costing him losses running up to tens of thousands of rupees” which were very large amounts in the 1980s.

Jamsetji was deeply distressed but thought through the situation deeply.

“At the end of this strategic reflection, he appears to have reached the conclusion that there was no sustainable or feasible way forward for Tata Line,” according to the book.

He then decided, quite clinically, to shut down this business, notwithstanding the risks this closure could pose for his reputation as a very successful entrepreneur.

“He sent back to England the ships he had leased, and the Tata Line was, sadly, shut down.” Most of Jamsetji Tata’s ventures — Empress Mills, Svadeshi Mills, Ahmedabad Advance Mills, Tata Steel and Tata Power — succeeded. The Tata Line is the one that did not.

“The story of this venture, Jamsetji’s initial vision as well as his decision to exit from it when he saw no ray of hope, as the industry was dominated by an unfair monopoly strongly supported by the then government, tells us that he did not shy away from making the right strategic choices untainted by emotions,” wrote the authors.

Source: https://www.thehindu.com/business/Industry/when-jamsetji-tata-did-not-shy-away-from-shutting-first-business-of-tata-group/article68484251.ece

The post When Jamsetji did not shy away from shutting the first business of Tata Group that bore the Tata name appeared first on The MindWorks.

Jamsetji Tata’s textile business suffered due to P.&O.’s exorbitant freight rates and discriminatory practices. Determined to challenge this, he traveled to Japan to collaborate with Nippon Yusen Kaisha (NYK), the largest shipping line in Japan. NYK agreed to partner with Jamsetji, provided he took equal risks and managed the ships himself. To launch the ‘Tata Line,’ he chartered an English ship named ‘Annie Barrow’ at a fixed rate of 1,050 pounds per month, marking the first venture bearing .

Believing the Tata Line would lower freight rates for the entire Indian textile industry, Jamsetji set the rates at Rs 12 per tonne, compared to P.&O.’s Rs 19 per tonne. Soon after, he chartered a second ship, ‘Lindisfarne.’ His efforts received praise, with The Tribune newspaper commenting in October 1894 that it had “been the subject of general praise in the industrial centre of India.”

However, P.&O. countered aggressively, slashing rates to Rs 1.8 per ton but requiring merchants to agree not to use the Tata Line or NYK ships. They also offered some merchants free passage for their cotton to Japan and started a smear campaign against the Tata Line, questioning the seaworthiness of ‘Lindisfarne.’

Jamsetji’s complaints to the British Indian government about P.&O.’s unfair practices went unheard. Over time, Indian merchants withdrew from Tata Line, heeding Jamsetji’s warnings that P.&O. would hike rates once again if his venture failed. The battle spilled into newspapers, with anonymous letters questioning Jamsetji’s “patriotic motives in starting the Tata Line.”

Despite investing over Rs 1 lakh in Tata Line and incurring monthly losses of tens of thousands of rupees, Jamsetji remained steadfast. However, upon reflection, he concluded that there was no sustainable or feasible path forward for Tata Line, given the unfair monopoly supported by the government.

“At the end of this strategic reflection, he appears to have reached the conclusion that there was no sustainable or feasible way forward for Tata Line.”

In a decisive and clinical move, Jamsetji shut down the Tata Line, returning the leased ships to England. This decision, although painful, showcased his ability to make strategic choices unswayed by emotions.

“He sent back to England the ships he had leased, and the Tata Line was, sadly, shut down.”

Jamsetji Tata’s ventures such as Empress Mills, Svadeshi Mills, Ahmedabad Advance Mills, Tata Steel, and Tata Power were successful. The Tata Line, however, did not achieve the same fate.

“The story of this venture, Jamsetji’s initial vision as well as his decision to exit from it when he saw no ray of hope, as the industry was dominated by an unfair monopoly strongly supported by the then government, tells us that he did not shy away from making the right strategic choices untainted by emotions.”

The book, ‘Jamsetji Tata – Powerful Learnings For Corporate Success’ by R Gopalakrishnan and Harish Bhat, chronicles this period, illustrating Jamsetji’s resilience and strategic acumen in the face of overwhelming challenges.

The post When Jamsetji Tata closed the first Tata enterprise without hesitation appeared first on The MindWorks.

Jamsetji started the ‘Tata Line’, the first business to bear the Tata name, to challenge the monopoly of the English P.&O., which dominated shipping from India in the 1880s and 1890s. The P.&O., supported by the British India government, charged Indian merchants exorbitant freight rates and offered greater rebates to British and Jewish firms, creating an uneven playing field for Indians, as outlined in “Jamsetji Tata – Powerful Learnings For Corporate Success” by R Gopalakrishnan and Harish Bhat, two Tata group veterans.

Feeling the adverse impact on his textile business, Jamsetji traveled to Japan to collaborate with Nippon Yusen Kaisha (NYK), Japan’s largest shipping line. NYK agreed to partner only if Jamsetji took an equal risk and managed the ships himself. He chartered an English ship, ‘Annie Barrow’, at a fixed rate of 1,050 pounds per month, making it the first vessel of the ‘Tata Line’.

Jamsetji believed this venture would lower shipping rates for the entire Indian textile industry, from Rs 19 to Rs 12 per tonne of freight, breaking P.&O.’s monopoly. Soon, a second ship, ‘Lindisfarne’, was chartered. In October 1894, The Tribune praised Jamsetji’s efforts, noting their significance in India’s industrial sector.

P.&O. quickly retaliated by slashing rates to Rs 1.8 per tonne, but only for merchants who agreed not to use the Tata Line or NYK ships. They also offered free shipping to some merchants and spread rumors that ‘Lindisfarne’ was unfit to carry cotton. Despite Jamsetji’s protests to the British Indian government, the unfair practices continued.

Gradually, Indian merchants withdrew their support from the Tata Line, fearing P.&O.’s influence. Despite warning them of future rate hikes if Tata Line closed, Jamsetji faced mounting losses. By the end of the ‘War of Freights’, he had spent over Rs 1 lakh on Tata Line, with monthly losses in the tens of thousands of rupees.

After careful consideration, Jamsetji concluded that there was no sustainable way forward for Tata Line. He decided to shut down the business, even though it risked his reputation as a successful entrepreneur. He sent back the leased ships to England, ending the Tata Line.

Most of Jamsetji Tata’s ventures, including Empress Mills, Svadeshi Mills, Ahmedabad Advance Mills, Tata Steel, and Tata Power, succeeded. However, the Tata Line was one that did not. This story, as detailed in the book, shows Jamsetji’s ability to make tough, strategic decisions without letting emotions cloud his judgment.

Source: https://www.businesstoday.in/latest/corporate/story/when-jamsetji-made-the-bold-move-to-shut-down-tata-groups-first-venture-440063-2024-08-04

The post When Jamsetji made the bold move to shut down Tata Group’s first venture appeared first on The MindWorks.

He had started the ‘Tata Line’, the first ever business of the Tata Group which bore the Tata name, with a view to challenge the monopoly of the English P.&O., the pre-eminent shipping line that carried exports from India during the 1880s and 1890s.

The English P.&O. Which had the support of the then British India government, had a virtual monopoly on shipping from India and charged Indian merchants exorbitant freight rates, while providing greater rebates on British and Jewish firms thereby creating an uneven playing field for Indians, according to the book titled ‘Jamsetji Tata – Powerful Learnings For Corporate Success’.

“Jamsetji Tata, who was in the textile business at that time, was adversely impacted, and he felt that this was very unfair to Indians,” wrote the authors, R Gopalakrishnan and Harish Bhat, two Tata group veterans, in their recently released book published by Penguin Random House India.

The pioneer of modern Indian industry then travelled to Japan to strike a collaboration with Nippon Yusen Kaisha (NYK), the largest shipping line of that country, which agreed to partner provided Jamsetji took “an equal risk in the venture and ran the ships on his own”.

Afterwards, he chartered an English ship ‘Annie Barrow’ at a fixed rate of 1,050 pounds per month and made it the first vessel of the new shipping company, which he called the ‘Tata Line’ — this was the first ever business of the Tata Group which bore the Tata name.

Jamsetji felt that this venture would benefit not only his textile business but also the entire Indian textile industry through lower shipping rates of Rs 12 per tonne of freight as compared to Rs 19 per tonne charged by P.&O and break the latter’s monopoly.

A second ship ‘Lindisfarne’ was also chartered soon afterwards.

The Tribune newspaper in October 1894 wrote that Jamsetji’s effort had “been the subject of general praise in the industrial centre of India”.

P.&O. Reacted immediately “announcing that it would reduce rates dramatically Rs 1.8 per ton. However, merchants could obtain this rate if they signed an agreement with P.&0. That they would not use the Tata Line or ships belonging to NYK”.

The English shipping line had also offered some specific merchants to carry their cotton to Japan free of charge, while starting to disparage Tata Line spreading word that one of its ships ‘Lindisfarne’ was unfit to carry cotton.

Jamsetji took up with the British Indian government against the unfair practices of P.&O. In vain.

Gradually, Indian merchants withdrew from their contracts with Tata Line despite Jamsetji’s warning that if his shipping company closed, P.&O. Would raise rates steeply one again.

The ‘War of Freights’ between Tata Line and P.&O. Spread even to newspapers when anonymous letters were published in local newspapers questioning Jamsetji’s “patriotic motives in starting the Tata Line’.

He had already spent over Rs 1 lakh on Tata Line and each month the business was “costing him losses running up to tens of thousands of rupees” which were very large amounts in the 1980s.

Jamsetji was deeply distressed but thought through the situation deeply.

“At the end of this strategic reflection, he appears to have reached the conclusion that there was no sustainable or feasible way forward for Tata Line,” according to the book.

He then decided, quite clinically, to shut down this business, notwithstanding the risks this closure could pose for his reputation as a very successful entrepreneur.

“He sent back to England the ships he had leased, and the Tata Line was, sadly, shut down.”

Most of Jamsetji Tata’s ventures — Empress Mills, Svadeshi Mills, Ahmedabad Advance Mills, Tata Steel and Tata Power — succeeded. The Tata Line is the one that did not.

“The story of this venture, Jamsetji’s initial vision as well as his decision to exit from it when he saw no ray of hope, as the industry was dominated by an unfair monopoly strongly supported by the then government, tells us that he did not shy away from making the right strategic choices untainted by emotions,” wrote the authors. (PTI)

The post When Jamsetji did not shy away from shutting the 1st biz of Tata Group that bore Tata name appeared first on The MindWorks.