International Management Essay Essays

International Management Essay Essays International Management Essay Essay International Management Essay Essay Executive Summary This written instance analysis study is prepared for the analysis of the instance survey of the Tata Group – â€Å"The Last Rajah: Ratan Tata and Tata’s Global Expansion. † ( Luthans and Doh 2009 ) . It will foremost get down with a brief debut on the Tata Group of India. with the beginning and the secondary ( both short- and long-run ) jobs of this biggest pudding stone in India. to be identified and discussed following. An analysis of the jobs is presented following. followed by the standards of rating. A comprehensive listing of all major executable classs of action are presented before the recommended scheme ( Internet Explorers ) are discussed. The following subdivision will cover the justifications of recommendations followed by the execution. control and follow up. 1. Introduction The Tata Group. India’s biggest pudding stone ( Luthans and Doh 2009 ) . was founded by 29-years old Jamsetji Nusserwanji Tata in 1868. It was foremost established as a trading company in Bombay and started open uping concerns in sectors such as steel. energy. fabrics and cordial reception ( Tata Group 2012 ) . In 1904. Sir Dorab Tata. the senior of Jamsetji’s two boies. succeeded Tata Group in Germany after Jamsetji passed on. Ratan Tata succeeded as the president. following the decease of his uncle – J. R. D. Tata. in 1993 ( Tata Group 2012 ) . Today. the Tata group consists of more than 100 runing companies in seven concern sectors ( Refer to Appendix 1 ) with operations in more than 80 states across six continents. exporting merchandises and services to 85 states. The latest fiscal figures reflected on its web site showed that the entire gross of Tata Group was US $ 83. 3 billion ( around Rs 3. 796. 75 billion ) in 2010-11. an addition of 18. 8 % from 2009-10 ( Tata Group 2012 ) . With its devotedness to strong values and first-class concern moralss. the Tata name has been respected in India for more than 140 old ages. Each Tata company or endeavor operates independently and is answerable to its ain board of managers and stockholders. Traveling frontward. new engineerings and invention will be Tata Group’s focal point. in order to develop its concern in India and internationally. Anchored in India with its traditional values and strong moralss. Tata companies are constructing transnational concerns that will accomplish growing through excellence and invention. while equilibrating the involvements of stockholders. employees and civil society ( Tata Group 2012 ) . 2. Beginning Problems With its broad variegation of concern across six continents. Tata faces several challenges. The first job is to construct a consistent vision while being in many different markets and industries. Another challenge is to explicate schemes for over 100 companies in more than 80 states.Besides this. another job of Tata Group is the high engagement of Ratan Tata. who is the main steward of the group of nine senior executives sitting on the boards of the Tata companies. in both the dialogues of major trades and the inside informations of his auto-making. telecom or steel concerns ( Luthans and Doh 2009 ) . The following challenge for Tata is on how to absorb the fighting Corus Millss. Other challenges for the future include make up ones minding on which concerns to by-product and which to prosecute. what will go on to the pudding stone during an economic system slow-down. The most challenge issue for Tata Group possibly would be to make full the nothingness left behind by the energetic an d airy Mr Ratan Tata – Chairman of the Tata Group. when he retire ( Koontz and Weihrich 2010 ) . 3. Secondary Problems 3. 1 Long term3. 1. 1 Diversification of investings and concernsFrom the instance survey. it is apparent that a major job for Tata Group is its variegation of its investings and concerns over so many different states. The group is subjected necessarily to the different market state of affairss and the civilization of each single market. 3. 1. 2 The continuance of operation of Corus MillssAnother long-run job for Tata Group is whether they should go on runing the fighting Corus Millss. As mentioned in the article. the minute Tata Steel took over Corus. it is loaded with a $ 7. 4 billion debt and the high operational cost of Corus weakens the net income borders of Tata Steel ( Luthans and Doh 2009 ) . 3. 1. 3 Sustainability of its concern versus sustainability of its corporate societal duty during economic system slow-down Should there be an economic system slow-down. the ability of Tat Group to prolong its concerns versus their ability to prolong the societal responsible civilization. which is developed by Ratan’s ascendants ( Griffin and Moorhead 2010 ) . remains a challenge for Tata Group. The Rata pudding stone will hold to make up ones mind between prolonging its concerns and carry throughing this civilization. This will be particularly tough with a $ 7. 4 billion debt already on its books. 3. 1. 4 Management control in Tata GroupAs mentioned in the article. Mr Ratan is the main steward. of his squad of nine senior executives in the Group Corporate Office. who negotiates major trades himself and immerses himself in the inside informations of his concerns. Ratan Tata is besides the major determination shaper in most of Tata Group’s major trades. At the clip when the article was written. Tata Group has non found a suited replacement. The fact that Mr Ratan Tata is individual and childless ( Luthans and Doh 2009 ) therefore poses the toughest challenge of who is to make full the nothingness for Tata Group. when Mr Ratan retires. 4. Analysis 4. 1 Diversification of investings and concernsThis long term job will turn out to be an obstruction towards its planetary enlargement and the development of the company to its full potency. as there is no 1 common group scheme with a common aim. The deficiency of a common corporate scheme may move as a keeping force ( Singh 2012 ; mention to Appendix 2 ) against traveling Tata Group to its coveted place in the planetary market and besides against accomplishing overall productiveness of the organisation. 4. 2 The continuance of operation of Corus MillssA first expression at this job of the Tata Group would evidently be to stop the operation of Corus Millss. However. one of the strengths and competitory advantage that Tata Group has over its rivals. is backward integrating ( Hill and Jones 2011 ) like what Hill and Jones ( 2011. 180 ) described – steel companies providing its Fe ore demands from company-owned Fe ore mines. Having its ain abundant coal and Fe ore militias enables Tata Group to bring forth natural steel at low cost in India. and transport it to Corus’ first-class Millss overseas to bring forth steel merchandises. Furthermore. by looking at the fiscal information provided in the instance survey. Tata Motors was the least profitableness concern in 2007 for Tata Group. With the acquisition of Corus Millss and Tata’s competitory advantage of backward integrating. Tata Group can do usage of Tata Steel and Corus Millss to bring forth low cost steel auto parts in order to cut down the cost of gross revenues for Tata Motors. The gross net income borders for Tata Motors can be increased with the cost of gross revenues reduced ( Needles. Powers. and Crosson. 2010 ) . 4. 3 Sustainability of its concern versus sustainability of its corporate societal duty during economic system slow-down When there is an economic system slow-down. it will subject Tata Group’s determination on prolonging its concern or still keep its expensive corporate societal duty. to a great trial. A fast and immediate solution. during an economic system down-turn will be to cut down the parts for charitable causes. such as cut downing or ending the one-year $ 40 million part for charitable Acts of the Apostless in Jamshedpur. in order to prolong its concerns. However. Tata Group will hold to see about the long-run deductions of such drastic immediate decrease or expiration of charitable financess. The repute of Tata Group may have a whipping in the long tally. due to negative imperativeness and media coverages ( Davies et al. 2003 ) . should such steps are implemented drastically and instantly. in order to prolong its concerns. 4. 4 Management control in Tata GroupFrom the description of the article. the direction manner of Tata Group seemed to follow an ethnocentric strategic sensitivity and an organisational civilization of â€Å"family culture† . A cultural strategic sensitivity refers to the peculiar manner which most multi-national companies ( MNCs ) have towards making things ( Luthans and Doh 2009 ; Aswathappa 2010 ) . A MNC with an ethnocentric sensitivity will usually depend on the values. and involvements of the parent company in formulating and implementing a strategic program. Their primary accent is on profitableness and the company will seek to run its abroad operations in line with how they are run back at place ( Loke 2008 ; Aswathappa 2010 ) . Tata Group is likened to be run with an ethnocentric sensitivity as Mr Ratan Tata is the main dealmaker who is closely involved in all major trades dialogues and besides inside informations of his different concerns. This sensitivity will necessarily ensue in parochialism in Mr Tata. which may impact his logical strategic thought. Tata Group has adopted a â€Å"family† type of organisational civilization. â€Å"Family culture† type of organisations besides concentrating on hierarchy. orientation to individuals. leader heads the company like a lovingness parent. the direction besides takes good attention of employees. ensures employees are good treated and bask continued employment ( Trompenaars and Hampden-Turner 1998 ) . This is clearly reflected in their disbursement of $ 40 million yearly in the company’s place base of Jamshedpur and their first-class employee wage policy of workers still acquiring paid to the full till the age of 60 old ages old and womb-to-tomb wellness attention. even if they retire early. This will ensue in extra disbursals for Tata Group in order to carry through this â€Å"corporate societal responsibility† . Harmonizing to the article. Tata Group has non found a suited replacement at the clip when the article was written. The toughest challenge will be happening a suited campaigner of who is able to make full the nothingness for Tata Group. when Mr Ratan retires. 5. Standards of Evaluation 1. To place and distinguish between the â€Å"Cash cows† and â€Å"Stars† ( Phadtare 2011 ; mention to Appendix 3 ) concerns and the â€Å"Question Mark ( or Problem Child ) † and â€Å"Dog† concerns ( Phadtare 2011 ; mention to Appendix 3 ) within the following 6 months. 2. To cut down the $ 7. 4 billion debt of Corus within the following 5 old ages. 3. To cut down their one-year â€Å"charitable spending† bit by bit within the following 5 old ages. but yet non neglect or waive their corporate societal duty. 4. To place a replacement within the following two to three old ages. 6. Alternate schemes A comprehensive listing of all executable schemes will be presented for Tata Group before the recommended scheme ( Internet Explorers ) will discussed. 6. 1 Short term ( S ) :Targeted short-run aims to accomplish within the following few months to 1 twelvemonth from the clip of execution. S1To place and group the concerns into â€Å"Cash cows† . â€Å"Stars† . â€Å"Question Mark ( or Problem Child ) † or â€Å"Dog† concerns ( Phadtare 2011 ; mention to Appendix 3 ) within the following 6 months. S2To make up ones mind on which concern ( Es ) to maintain and concentrate on and which concern ( Es ) to neutralize. 6. 2 Long term ( L ) :Targeted long-run aims to accomplish within the following 3 – 5 old ages and beyond. L1To cut down the $ 7. 4 billion debt of Corus Millss within the following 5 old ages by possibly re-looking into refinancing the debt loan with a lower involvement rate. in order to strength their net income borders. This is to change over Corus Millss into a profitable concern unit which will enable Tata Group to go on edifice on its competitory advantage over its rivals. of incorporating backward integrating. with the coaction of Tata Steel and Corus Millss. for Tata Motors. L2To cut down their one-year â€Å"charitable spending† of S $ 40 million for Jamshedpur bit by bit – 5 % per twelvemonth in the first four twelvemonth and a concluding 10 % in the 5th twelvemonth. and besides to cut down the employees’ benefits bit by bit. This will enable Tata Group to prolong its concerns better. but yet non neglect or waive their corporate societal duty. L3To place a replacement within the following two to three old ages and besides to bit by bit alter their ethnocentric sensitivity manner of running the concern and besides their â€Å"family† type of organisational civilization. Strategy statement as per Hofer and Schendel’s features: Tata Group’s scheme for the following 3 – 5 old ages is to â€Å"tidy up† it’s widely diversified investings and concerns and work on its competitory advantage of backward integrating ( of having Fe ore mines ) in order to assist its car concern addition net income border. By bit by bit cut downing their one-year â€Å"charitable spending† . Tata Group will be able to impart these capital to prolong and spread out its concern globally. By placing a replacement for its president. this will guarantee the sustainability of the Tata concerns and besides to convey Tata Group to the following frontier. 7. Recommended scheme ( Internet Explorers )In order for this concern program for Tata Group to be successful. the schemes presented demands to be both accomplishable and sustainable with an accurate rating of its current resources. nucleus competences and capablenesss. With both short term and long term schemes listed supra and analyzed via the Strategy Feasibility Table listed in Appendix 4. the recommended schemes ( best 3 out of 5 ) are as follows: S1: To place and group the concerns. S2: To make up ones mind on which concern ( Es ) to maintain. which concern ( Es ) to neutralize.L2: To cut down their one-year â€Å"charitable spending† . 8. Justifications of recommendations After analysing the options schemes via the Strategy Feasibility Table ( Refer to Appendix 4 ) . it was decided that the most executable schemes are S1. S2 and L2 to decide the beginning and secondary jobs above. Schemes S1 and S2 are chosen to outdo decide the variegation of concerns that resulted in the absence of a common group scheme with a common aim for Tata Group. The following scheme for Tata Group to implement is the decrease of their one-year â€Å"charitable spending† . This will liberate up more capital for Tata Group to airt them to tout their â€Å"Stars† concerns. The staying two long-run schemes of L1 and L3. with a somewhat higher mark of 15 and 14 severally. in the feasibleness trial. may be considered to be implemented at the same time with lesser precedences. This is because it will non be easy for Tata Group to cut down the $ 7. 4 billion debt within a short period of clip and besides non easy for any company to beginning for. identify and name a replacement for its Chairman and to alter the civilization within a short period of clip excessively. The most critical issue now is for Tata Group to carry on the most effectual and efficient schemes. 9. Implementation. Control and Follow-up For any MNCs. e. g. Tata Group. it is non easy to implement concern consolidation like S1 and S2. S1 and S2 described supra will merely be the â€Å"identification† phase to find the type of concern each belongs to. The physical execution of the consolidation has to be executed with utmost cautiousness as consolidation may ensue in employees redundancy. After the consolidation exercising is successfully. the Group Corporate Office ( GCO ) of Tata Group will hold to guarantee that they do non establish monolithic concern variegation programs without careful considerations. The followup on the execution of S1 and S2 will hold to be monitor by the GCO closely with a clear timeline listed out as a usher to forestall any cunctation or holds. As for the execution of scheme L2. Tata Group has to put to death it with cautiousness excessively. It is non be implemented excessively hurriedly to forestall any harm to the company’s image due to any to negative imperativeness and media coverages ( Davies et al. 2003 ) . Any other hereafter â€Å"charitable spending† will hold to be discussed and decided more strictly. As stated above under Section 6. 2. L2. the decrease will be done bit by bit over a timeline of 5 old ages and the GCO of Tata Group will hold to adhere closely to this timeline. 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Coleman A ; Co. Ltd. hypertext transfer protocol: //economictimes. indiatimes. com/topic/Ratan-Tata. Trompenaars. Alfons. and Charles Hampden-Turner. 1998. Riding the Waves of Culture: Understanding Diverseness in Global Business. 2nd erectile dysfunction. New York. USA: McGraw-Hill. Appendix Appendix 1: The seven concern sectors of the Tata groupThe seven concern sectors of the Tata group:1 ) Communications and information engineering2 ) Technology3 ) Materials4 ) Servicess5 ) Energy6 ) Consumer merchandises7 ) Chemicals( Tata Group 2012 ) Appendix 2: Kurt Lewin’s Force Field Analysis Beginning: hypertext transfer protocol: //www. change-management-coach. com/force-field-analysis. hypertext markup language ( Change Management Coach 2012 ) Appendix 3: The Boston Consulting Group ( BCG ) Growth Share Matrix Beginning: hypertext transfer protocol: //www. quickmba. com/strategy/matrix/bcg/( QuickMBA 2010 )