Features of International Management: Tata group - Case Study Example

?International Management Table of Contents International Management Table of Contents 2 Introduction 3 Analysis of Case 4 Leadership 4 BCG Model 5SWOT Analysis 6 Strengths 6 Weakness 7 Opportunities 7 Threats 7 Ethics and Corporate Social Responsibility 7 Conclusion 8 References 10 Bibliography 11 Introduction Successful businesses organizations are often associated with a dynamic leadership. Examples of real life show how large business organizations have succeeded in the global competitive markets because of a visionary leadership1. Some notable examples can very well include legendary business leaders like Steve Jobs (Apple Inc), Bill Gates (Microsoft) as well as NR Narayana Murthy (Infosys Technologies)2. These leaders have shown very effective leadership by way of farsightedness and vision to succeed in markets and bring about large and successful business organizations. The importance of leadership can not only be analysed from success stories in the real life business world but also from cases of failure. This includes the fall of the famous energy giant Enron3 or the fallout of the Indian software major Satyam. These examples show a true authentication of the aspect and the importance of leadership and effective management as the key for success in a business organization4. The leaders should have a personality so that he/she sets up an example for the rest of the others in the organization to admire and imbibe. The leader should have vision and attitude so as to foresee opportunities and threats and overcome them with the strengths and opportunities5. The present report would analyse the case of Ratan Tata and the Tata Group as a whole with regards to various perspectives including the aspect of leadership as well as certain other organizational issues that are directly linked to it. Analysis of Case Leadership There are various leadership theories including Great men theories, trait based theories, contingency theories, situational theories, behavioural theories, participative theories, management theories and relationship theories. These theories tend to define the leadership qualities and style for a leader6. In the context of the present case Ratan Tata can be traced to great men theories. Ratan Tata is a born leader and from a very small age has taken over the reins of the company. Under his visionary leadership the company has grown from being a case study of low profits to a global giant. Ratan Tata as defined in the case is also authoritative and does not hesitate to take up bold decisions even in turbulent situations such as the handling of the crisis of disputing labour unions at the company’s Jamshedpur plant. The leadership style of the Ratan Tata is of a transformational nature as the leader is credited with making the company turnaround to growth and profitability7. Ratan Tata is said to have been credited with the conceptualisation of the creation of the world’s cheapest car the Tata Nano that is a technological marvel. He is also credited with the successful merger of the company’s steel unit (Tata Iron and Steel) with the European steel maker Corus to make the company a top notch global player in the steel industry8. Ratan Tata’s leadership style involves a situation in which even at an age of 69 the leader is well versed with even specific and minute details about the company and the large number of diversified business units. The nature of leadership has been so effective that it has become very difficult for the company to find a successor to Ratan Tata who is due to retire early. BCG Model One of the major aspects highlighted in the case goes about the company’s management of a large number of sub-units or business units. Currently the company is engaged in the business of making salt to software that makes it a very diversified and huge business. As reflected in the case Mr. Ratan Tata has acknowledged that one the fronts that needs immediate attention is the skimming up of the business units and generating greater focus areas within the business and the market segment. In order to successfully undertake this aspect the use of the Boston Consultancy Group Matrix can help the company classify and segregate its business units on the basis of market attractiveness and profitability. The BCG matrix can be effectively used in businesses that have multiple sub units9. The Tata Group is an excellence case in this regard with the company having a large number of diversified business units. The BCG matrix classifies the business units into four categories namely, Stars, Cash Cows, Question Marks and Dogs10. Figure 1: BCG Matrix (Source)11 The BCG matrix can be used by the Tata Group to segregate the business units. This would help in siphoning off business units that are branded under the dog segment. It can possibly look for investing into the other three subunits. This would help the company to generate greater focus on the profitable and potential business units that would also help in streamlining the vast scale of business operations. This has also been identified as one of the major issues before the organization as the company has highly diversified business operations and managing each of them effectively leads to loss of focus towards the potential profit generating units. Using the BCG matrix can help the company to solve this very crucial issue that has been plaguing the company and its top management over many years. SWOT Analysis SWOT is an acronym that is used to analyse the Strengths, Weakness, Opportunities and Threats prevailing in a business organization12. SWOT is frequently used to analyse the internal environment prevailing in a particular organization. The SWOT analysis of the Tata Group as summed up from the analysis of the case study is stated below: Strengths The major strength of the organization lies in its formidable brand image and the long years of association within the industry segment. Also the successful management of the organization also contributes towards some of the major strengths of the organization13. The company’s policy of having an effective policy of Corporate Social Responsibility has helped project a sociable face of the organization in the minds of the target market audience. The company is also known for its effective policy of having a good human resource planning strategy that has helped it to attract some of the best talents in the industry. The presence of a large brand portfolio also ensures that the company has a presence in all the customer segments ranging from salt to software14. Presence of an effective and visionary leadership also acts as a unique feather in the cap of the company. Apart from this the company also has many credits to its name including the ambitious launch of the world’s cheapest car Nano15. Tata Group recently through a spate of mergers and acquisitions has also acquired the steel giant Corus and luxury automobile brand Jaguar and Land Rover that has increased the group’s global presence and has also increased the overall brand image of the organization. Weakness Some of the weakness in the organization includes the aspect of having a large number of highly diversified business units and a large number of employees that pose a considerable challenge for the organization with the aspect of losing focus in the long run. Certain other areas of weakness include the aspect of acquisition of Corus and land Rover. Both these units have a large amount of debt in the balance sheets. Apart from cultural issues also exist in the effective merger of the two culturally distinct organizations with the acquired business units. Opportunities The growing opportunities in consulting, software and other areas as well as the growing global presence pose innumerable opportunities for the organization. Tata Sons also has good market opportunities in India where the nation has witnessed phenomenal growth16. Being one of the pioneers in the Indian industry the company can very well take leverage of this aspect and generate competitive advantage for itself in the market. Threats The threats to the organization emerge mainly from the aspect of having an effective leader that can succeed the great Ratan Tata as their business leader. Apart from this fluctuations in the European market where many of its clients in the software and automobile units are based can also pose threats to the organization. Ethics and Corporate Social Responsibility One of the cornerstones of the Tata group is their effective corporate social responsibility strategy. The company is reputed not only in India but also globally for its huge community and social welfare programs. The company is widely credited for having undertaken CSR activities much before the advent of this concept in the modern Western companies. This was also acknowledged by the Corus officials who came to visit the Tata Steel’s Jamshedpur steel plant where they were impressed with the social sustainability measures being undertaken by the organization. Every year the company spends huge amounts towards education, healthcare and other social needs of the entire community as a whole. The company however faces an issue particularly with the aspect of huge spending in CSR activities that has been questioned by some of the critiques. This issue has assumed importance particularly after the merger of Corus and acquisition of luxury automobile brand Jaguar and Land Rover. These expensive acquisitions and mergers have put a severe strain on the finances of the company as Corus has a huge employee base as well as a large amount of debt in the balance sheet of the company. Jaguar and Land Rover also faces considerable challenge in the recessionary market environment. The company is now under pressure from the newly merged units to undertake the same form of CSR activities in their units as well. This has posed considerable challenges before the organization. One possible solution for this can be in the form of closing down some of the unprofitable and potentially unviable business units of the conglomerate. This would help in better financial management for the organization as the funds saved can be used to fund CSR activities in the newly merged business units and to generate greater focus in the business. Conclusion The analysis of the business case of Tata group shows and also illustrates the importance of leadership and the manner in which an effective and visionary leader can create milestones and set the shape for an organization. The case study shows considerable leadership skills of Ratan Tata who has been credited for making the organization grow from a small regional level to a major business conglomerate in the global business arena. The company has a large portfolio of brand under single brand umbrella and is engaged in the business of selling salt to software based products. Ratan Tata is also accredited with taking up the most challenging aspect of manufacturing the world’s smallest car. However the company faces certain challenges in its business sustainability considering the large number of diversified units within the brand umbrella of the organization. This issue has been acknowledged by the organization as one of the most challenging areas for the top management in ensuring sustainability in the business. Certain other challenges include the aspect of finding a suitable successor for Ratan Tata who is approaching 70 years in age. The leadership qualities and the huge and magnanimous nature of the business have made it very difficult for the top management to search for a suitable successor to the legendary business tycoon. In addition to this the company also faces considerable challenges with regards to management of its CSR activities and bridging the cultural and operational gap with the newly acquired business units in Europe. 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