On reading the blog on ‘Participative management in KDHP’, my friend Mr Dave wanted to know as to why Tatas decided to exit the business of tea estate in first place. Was it due to losses, inefficiency, workers problems or something else? I truly don't know Tata's version. But the deal of Tatas bringing workers participation in the equity and in the operations of the tea estate, has been a win-win situation for both the parties.
From what is being seen today, the deal brings the following two perspectives to the fore:
i) From Tata's perspectives, the selling of shares to the workers provided the Tatas an exit from the loss-making tea estate business. This also enables them to focus on their forte of highly valuable retail tea brands. They package and produce 'Kanan Devan' retail tea outside the town, which shows their interest in operation of consumer brands.
The success of this model, besides becoming a vehicle for resolving the profit crisis of the tea industry, also trumpets the company's socially responsible business ethic.
ii) For the vulnerable workforce in a time of crisis in the industry, this deal gave them an opportunity to save for their futures, besides giving them a sense of financial commitment in the company.
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