The Tata Group Business - Case Study Example

Tata Report Name ID Number Lecturer’s Name Date Question one The Tata group business has been transformed into one of the leading conglomerate in the world. This can be largely attributed to one individual Ratan Tata who as the group leader contributed a lot to having the business transformed. Ratan had a vision for the group that seemed impossible but he worked to turn it into a reality. When he took over as the group leader he introduced a retirement policy of the group’s top management. This policy saw many of the top management people being thrown out because they were great hindrances to change and growth of the company. This was his element of change that he wanted to bring into the business. This policy paved way for young people with fresh brains who will come up with new ideas. Ratan also worked to create and implement a Group Executive Office who were representatives all the individual companies under the Tata Group. The members of Group Executive Office had representatives in the board of the company. He also introduced Tata Business Excellence Model (TBEM) and he put a Tata Quality Management service in place so as implement the TBEM in each of its stages.  As an agent of change and transformation he introduced a democratic way of leadership. This mode of leadership required the players to be open and bring up new ideas. This helped in building confidence of executives and managers because Ratan led from the front and he was very supportive in everything the management could consult. Using the TBEM framework he introduced measures to ensure productivity was enhanced. This led to closing down of out-dated factories and upgrading steelworks. In order gain productivity the workforce was reduced. Due to increased operational costs he introduced a voluntary retirement scheme so as to reduce the workforce and worked to reduce the suppliers by introducing quality assurance measures. He was focusing on marketing rather than manufacturing. He led to launching of range of passenger vehicles that would penetrate the market. In 1998 Ratan started working on offloading the companies that were not contributing to the total sales and revenues of the Tata Group. This was aimed at being among the top three companies in every industry the Tata Group operated. He introduced performance goals for the executives where they would propose what should be done and how it should be done. He had consultative way of leadership and this is evident in his dare quotient where the executive were free to make decisions on their own. He also introduced a common logo for the companies under the Tata Group so as to maintain a single brand image. The company also started sponsoring events where the common logo was displayed. He worked to have the company invest in innovation so as to differentiate the Tata Group from other companies. This led to introduction of products such Indica, Nano, reducing gas generator among others. He led the company in having global acquisition so as to widen the companies market. His policy of acquisition saw the company taking over or partnering with the already existing companies in the global market so as to compete with other companies. This was possible through buying of shares. He also introduced operations in the international market so as to help the company survive in times of economic distress. This was aimed diversifying the risks in that the company could gain profits in one country that will cover losses made in another country. He also ensured that all controversies were solved in the best way possible to avoid hurting anyone in the process. Question two There are many advantages and disadvantages that arise from streamlining of a business. Tata group went through major streamlining and it benefited in the following ways. There is employee empowerment, streamlining leads to laying off of excess manpower. This means that the remaining employees do not need to master a complex production system but only to understand their roles. The employees are motivated because they are aware of what is going on and work to achieve their individual goals and those of the company. The company also benefited from efficiency that comes with streamlining. The reason behind this is that the company remains with the operations that it can handle comfortably and in an efficient way. There is reduced supervisions because there is no complexities in the process. This also leads to reduction of costs that are related to widened operations. The employees are not pushed past their limits and, therefore, they are satisfied in their operations. Another benefit is that there is reconfiguring. This means that the company is only involved in areas where it can comfortably gain without straining. The company let go off the operations that are straining the company without bringing any gain to the company. This increases effectiveness because of efficiency and this leads to customer satisfaction as a result of high quality products. Reconfiguring aims at the company producing in its area of expertise with an aim of increasing company benefits. The Tata group had to let off go the operations that were not profitable to the company. This was according to Ratan Tata’s belief that every Tata’s operation should be among the top three companies in its industry of operation. The company will be able to control the market by improving quality of its products through concentration of few companies. The company will be able to invest in research and development so as to introduce new products that will cater for the customers’ needs. The company introduced Nano so as to cater for the middle class who could not afford the high priced vehicles. There were a lot of businesses that were willing to work with Tata Group because of their reputation. The company had gained a lot of reputation because of Ratan Tata and therefore, it was not hard for the company to have partners in the global market because they knew they would gain from the leadership of Ratan and, therefore, earn profits. The disadvantages of the streamlining process include that the company incurred a lot of costs in the process because it had to introduce policies such as voluntary retirement. This meant that it had to give send-off packages to the employees who retired from their operations. The company also lost a lot of resources and assets in the operations that were laid off because they were sold at a cheaper price than their original costs. Increased reputation meant that the company attracted a lot of companies that were willing to be part of the Tata Group. The acquisition of such companies was detrimental because they were earning losses and this affected the company revenue. As 2009 the company had got rid of the unprofitable business and acquired others that they felt could benefit the company. Therefore, the company was involved in businesses that it was comfortable running. Question 3 Ratan believed in having the only beneficial companies. Therefore, he introduced a policy that would see the Tata group get rid of the companies that were earning losses and not contributing to the company’s revenue and productivity. The policy could also see the company acquire the profitable businesses through the strategy of acquisition. This also saw taking over of companies such as Jaguar-Land Rover and Anglo-Dutch steel company. There were the starting steps of Tata group becoming the largest companies in India. The benefits involved include that the company do not need to start from scratch in a new environment but only plans to start operations in the already acquired company. This helps focus on productivity and marketing in the new environment. Acquisition also helps the company diversify and minimize the risks of a new business and operation in a new environment. Acquisitions helps the company enter into the market as the existing company which would be hard if the company was new. Acquisition also helps the company in saving time that would have been taken to set up a new company including hiring and training of employees this ensures that the operations of the company starts as soon as the acquisition process is complete. Acquisition also helps the company have the market share that was possessed by the company and this allows the company to compete with other existing companies. This is done through maintaining the customers of the company being acquired. A new company will take a lot of time before it adjusts in the global market and, therefore, acquisition of an already existing company will help the company starts its operations immediately. The risks involved in the acquisition policy taken by Ratan Tata are that the company could acquire a business that is earning losses and this could drain the company resources. The acquisition process in some countries is hectic and consumes a lot of time that would be used in production. The global market is competitive and requires a lot of research and development for a company to be competitive and to have a large market share. References ICMR. 2010. Case 10: Ratan Tata: Leading the Tata Group into the 21st Century. Read More