Achieving Improved Relationships among the Group of Companies under Tata - Case Study Example

The paper "Achieving Improved Relationships among the Group of Companies under Tata" is a perfect example of a case study on business.  Established in the 1990s, the Tata Group is a confederation of firms, which have no close links. Ratan Tata took over the leadership of the confederation and made it a priority to improve the inter-relationships of the companies. Professionals within the production sector were of the view that Ratan Tata should dismantle the confederation due to the high cost involved. If ran efficiently, conglomerates can reduce costs for enhanced market efficiency.

Discussion

Recommendations

            Companies under the Tata group face high budgets for advertising. The companies would reduce advertising expenses by paying Tata sons a nominal sum of money. If the manager created a common brand, the groups could benefit mutually. Using a single brand, the companies would be more credible in the market. Rotating the executives in Tata’s group of companies would enhance the management, which would, in turn, streamline prevalent challenges and promote business efficiency. Taking for instance the development of a common code of conduct among the group of companies, Tata would increase the customer base because of the improvement in ethical practices. Managers facing similar challenges should adapt the above strategy.

            Enhancing control on the group of companies would be a strategic move geared towards embracing growth opportunities. Poor coordination amongst the companies under Tata could make the groups compete against themselves. Growth plans would also vary from one company to the other thereby creating a conflicting situation. By exercising group control, the firm would enable the groups to establish in different markets focusing on specific segments thereby benefiting the group of companies. The presence of poorly skilled labor is another challenge. To create value, the manager should initiate a TAS recruitment program and offer good compensation packages. In addition, the firm should rotate the competent individuals in the group of companies.

Assumptions, Strengths, and Weaknesses

            Any business functions under the principle of reducing cost and increasing productivity. Tata is no exception as reducing advertising costs among the group of companies would benefit the business in general. The assumption is that such a step would make the firm extend the number of operations using the saved funds.  Enhancing control requires creating a focused approach in the field of operations. Assuming Tata Chemicals, Tisco and ACC came up with cement plants, the conflict would arise in the nature of operations. It is only right that the companies under Tata compete against those outside of the Tata group. The only technique of accomplishing that is to create proper coordination. Assuming the manager rotated both the executives and new competent recruits in all industries under the companies, co-ordination of activities would improve through greater accountability.

            The only other option that exists for advertising by the whole firm is to advertise under the various brands dealt with by the group of companies. The strength of the movie is that each brand will create in-depth awareness of the product and services. Such a strategy has a weakness that the companies will spend a lot on advertising. A possibility of internal competition among the brands also exists given the poor coordination that would occur to the group of companies. The option regarding exercising control of the group of companies would require increased auditing procedures. The strength would be improved accountability of business operations. The weakness would be the cost involved for such procedures in all the groups of companies. Other strategies cannot apply to do to the sensitive nature of business.  

Conclusion

            To achieve improved relationships among the group of companies under Tata, the firm needs to enhance control by proper co-ordination of operations under a common brand. This would involve reducing costs, rotating executives as well as competent recruits in the industries for better market efficiency. This draws lessons for managers faced with challenges of inefficiency in a group of businesses.