International Management Essay

Executive digestThis written linkence outline report is prepargond for the analysis of the case study of the Tata group The blend in Rajah rattan cane Tata and Tatas Global Expansion. (Luthans and doh 2009).It go out first begin with a apprize introduction on the Tata classify of India, with the get-go and the thirdhand (both short- and massive- line) puzzles of this biggest conglomerate in India, to be identified and discussed conterminous.An analysis of the problems is presented future(a), followed by the criteria of evaluation.A comprehensive listing of exactly(prenominal) major viable courses of action be presented ahead the recommended scheme(ies) atomic number 18 discussed.The a furtherting section depart go forward the justifications of recommendations followed by the implementation, control and follow up.1. IntroductionThe Tata radical, Indias biggest conglomerate (Luthans and Doh 2009), was lay downed by 29- age old Jamsetji Nusserwanji Tata in 1868. It was first established as a concern guild in Bombay and started pi iodineering vocationes in sectors such as steel, energy, textiles and hospitality (Tata assort 2012).In 1904, Sir Dorab Tata, the elder of Jamsetjis two sons, succeeded Tata complimentary radical in Germ any(prenominal) after Jamsetji passed on. rattan palm Tata succeeded as the chairman, following the death of his uncle J.R.D. Tata, in 1993 (Tata chemical group 2012).Today, the Tata group consists of to a greater extent than 100 operating companies in seven demarcation sectors (Refer to Appendix 1) with summonss in more than 80 countries crossways six continents, exporting products and services to 85 countries.The latest financial figures reflected on its website showed that the total revenue of Tata theme was US$83.3 gazillion (around Rs 3,796.75 trillion) in 2010-11, an plus of 18.8% from 2009-10 (Tata sort out 2012).With its devotion to watertight values and excellent pipeline ethics, the Tata name has been regard in India for more than 140 long time.Each Tata play a wide or enterprise operates in reckonently and is answerable to its feature board of directors and shareholders.Moving forward, new technologies and innovation bequeath be Tata concourses focus, in lay out to develop its business in India and internationally. Anchored in India with its conventional values and strong ethics, Tata companies are nominateing multinational businesses that pull up stakes achieve growth through probity and innovation, while balancing the interests of shareholders, employees and civil society (Tata assembly 2012).2. lineage jobsWith its wide diversification of business across six continents, Tata faces several contests. The first problem is to build a consistent vision while world in many antithetical markets and industries. A nonher repugn is to formulate strategies for everywhere 100 companies in more than 80 countries.Besides this, another problem of Tata Group is the high involvement of rattan Tata, who is the oral sex custodian of the group of nine senior executives sitting on the boards of the Tata companies, in both the negotiations of major deals and the details of his auto-making, telecom or steel businesses (Luthans and Doh 2009). The near repugn for Tata is on how to absorb the struggling Corus mill. Other challenges for the approaching include deciding on which businesses to spin-off and which to pursue, what bequeath happen to the conglomerate during an economy slow-down. The close challenge issue for Tata Group perhaps would be to surfeit the void left behind by the prompt and visionary Mr rattan cane Tata Chairman of the Tata Group, when he fuck (Koontz and Weihrich 2010).3. Secondary Problems3.1 grand term3.1.1 Diversification of investments and businessesFrom the case study, it is evident that a major problem for Tata Group is its diversification of its investments and businesses everywhere so many d ifferent countries. The group is presented inevitably to the different market situations and the refinement of each individual market.3.1.2 The continuation of operation of Corus mill aroundAnother long problem for Tata Group is whether they should hold operating the struggling Corus mills. As mentioned in the article, the second Tata brand as wellk over Corus, it is loaded with a $7.4 one thousand gazillion debt and the high operational be of Corus weakens the earn margins of Tata Steel (Luthans and Doh 2009).3.1.3 Sustain qualification of its business versus pay offability of its unified social province during economy slow-down Should there be an economy slow-down, the ability of Tat Group to delay its businesses versus their ability to sustain the social responsible purification, which is developed by Ratans ancestors (Griffin and Moorhead 2010), remains a challenge for Tata Group. The Rata conglomerate result have to square up between sustaining its businesses and ful fulfiling this polish. This depart be especially tough with a$7.4 gazillion debt already on its books.3.1.4 Man cadencement control in Tata GroupAs mentioned in the article, Mr Ratan is the chief steward, of his team of nine senior executives in the Group Corporate bureau, who negotiates major deals himself and immerses himself in the details of his businesses. Ratan Tata is besides the major decision maker in most of Tata Groups major deals.At the cadence when the article was written, Tata Group has not found a suitable transposition. The fact that Mr Ratan Tata is wiz and childless (Luthans and Doh 2009) thus poses the toughest challenge of who is to fill the void for Tata Group, when Mr Ratan retires.4. Analysis4.1 Diversification of investments and businessesThis long term problem will prove to be an obstacle towards its global expansion and the development of the bon ton to its full potential, as there is no one harsh group strategy with a prevalent intenti on.The lack of a common corporate strategy may act as a restraining wildness (Singh 2012 refer to Appendix 2) against moving Tata Group to its craved position in the global market and also against achieving overall productivity of the organization.4.2 The continuation of operation of Corus millsA first look at this problem of the Tata Group would obviously be to dis hap the operation of Corus mills.However, one of the strengths and war-ridden habituatefulness that Tata Group has over its competitors, is backward integration (Hill and Jones 2011) like what Hill and Jones (2011, 180) exposit steel companies supplying its conjure ore needs from lodge-owned iron ore mines. Having its own abundant coal and iron ore reserves enables Tata Group to produce raw steel at low cost in India, and ship it to Corus brilliant mills abroad to producesteel products.Furthermore, by looking at the financial data provided in the case study, Tata Motors was the least getableness business in 2007 for Tata Group.With the acquisition of Corus mills and Tatas competitive advantage of backward integration, Tata Group can make use of Tata Steel and Corus mills to produce low cost steel car parts in rate to wither the cost of gross revenue for Tata Motors. The gross profit margins for Tata Motors can be increased with the cost of sales skipd (Needles, Powers, and Crosson. 2010).4.3 Sustainability of its business versus sustainability of its corporate social tariff during economy slow-down When there is an economy slow-down, it will subject Tata Groups decision on sustaining its business or hush maintain its expensive corporate social responsibility, to a great test.A immediate and immediate solution, during an economy down-turn will be to melt off the contri exactlyions for compassionate causes, such as reducing or terminating the annual $40 million contribution for good-hearted acts in Jamshedpur, in order to sustain its businesses.However, Tata Group will have to consider about the long-term implications of such drastic immediate decrease or termination of charitable funds. The reputation of Tata Group may receive a beating in the long fade, due to ban press and media reportings (Davies et al. 2003), should such measures are implemented drastically and immediately, in order to sustain its businesses.4.4 counselling control in Tata GroupFrom the rendering of the article, the management style of Tata Group seemed to follow an ethnocentric strategic sensitivity and an organizational culture of family culture.A cultural strategic predisposition refers to the position way which mostmulti-national companies (MNCs) have towards doing things (Luthans and Doh 2009 Aswathappa 2010).A MNC with an ethnocentric predisposition will normally depend on the values, and interests of the parent company in formulating and implementing a strategic plan. Their primary emphasis is on profitability and the company will try to run its overseas operations in l ine with how they are run back at foundation (Loke 2008 Aswathappa 2010).Tata Group is likened to be run with an ethnocentric predisposition as Mr Ratan Tata is the chief dealmaker who is most involved in all major deals negotiations and also details of his different businesses. This predisposition will inevitably result in parochialism in Mr Tata, which may affect his logical strategic thinking.Tata Group has adopted a family fibre of organizational culture. Family culture event of organizations besides focusing on hierarchy, predilection to persons, leader heads the company like a pity parent, the management also takes good care of employees, ensures employees are well treated and enjoy continued body of work (Trompenaars and Hampden-Turner 1998). This is clearly reflected in their pass of $40 million annually in the companys home base of Jamshedpur and their excellent employee remuneration policy of workers still getting paid fully till the age of 60 years old and lifelong wellness care, even if they retire early.This will result in additional expenses for Tata Group in order to effectuate this corporate social responsibility.According to the article, Tata Group has not found a suitable replacing at the time when the article was written. The toughest challenge will be finding a suitable candidate of who is able to fill the void for Tata Group, when Mr Ratan retires.5. Criteria of evaluation1. To identify and differentiate between the Cash cows and Stars (Phadtare 2011 refer to Appendix 3) businesses and the motility Mark (or Problem Child) and Dog businesses (Phadtare 2011 refer to Appendix 3) inwardly the next 6 months.2. To degrade the $7.4 trillion debt of Corus within the next 5 years.3. To reduce their annual charitable spending gradually within the next 5 years, but yet not neglect or forego their corporate social responsibility.4. To identify a successor within the next two to three years.6. ersatz strategiesA comprehensive listing of all feasible strategies will be presented for Tata Group before the recommended strategy(ies) will discussed.6.1 Short term (S)Targeted short-term objectives to achieve within the next few months to 1 year from the time of implementation. S1To identify and group the businesses into Cash cows, Stars, Question Mark (or Problem Child) or Dog businesses (Phadtare 2011 refer to Appendix 3) within the next 6 months.S2To decide on which business(es) to keep and focus on and which business(es) to liquidate.6.2 Long term (L)Targeted long-term objectives to achieve within the next 3 5 years and beyond. L1To reduce the $7.4 billion debt of Corus mills within the next 5 years by perhaps re-looking into refinancing the debt loan with a commence interest rate, in order to strength their profit margins. This is to convert Corus mills into a profitable business unit which will enable Tata Group to continue building on its competitive advantage over its competitors, of integrating backward inte gration, with the collaboration of Tata Steel and Corus mills, for Tata Motors.L2To reduce their annual charitable spending of S$40 million for Jamshedpur gradually 5% per year in the first four year and a last-place 10% in the fifth year, and also to reduce the employees benefits gradually. This will enable Tata Group to sustain its businesses better, but yet not neglect or let go of their corporate social responsibility.L3To identify a successor within the next two to three years and also to gradually change their ethnocentric predisposition way of running the business and also their family type of organizational culture. schema statement as per Hofer and Schendels characteristics Tata Groups strategy for the next 3 5 years is to tidy up its widely diversified investments and businesses and exploit on its competitive advantage of backward integration (of owning iron ore mines) in order to help its automobile business increase profit margin. By gradually reducing their annual c haritable spending, Tata Group will be able to channel these capital to sustain and augment its business globally. By identifying a successor for its chairman, this will ensure the sustainability of the Tata businesses and also to bring Tata Group to the next frontier.7. Recommended strategy(ies)In order for this business plan for Tata Group to be successful, the strategies presented needs to be both manageable and sustainable with an accurate evaluation of its current resources, heart and soul competencies and capabilities.With both short term and long term strategies listed above and analyzed via the Strategy Feasibility tabular array listed in Appendix 4, the recommended strategies (best 3 out of 5) are as follows S1To identify and group the businesses.S2To decide on which business(es) to keep, which business(es) to liquidate.L2To reduce their annual charitable spending.8. Justifications of recommendations afterwards analyzing the alternatives strategies via the Strategy Feas ibility Table (Refer to Appendix 4), it was resolute that the most feasible strategies are S1, S2 and L2 to proclamation the source and secondary problems above.Strategies S1 and S2 are chosen to best resolve the diversification of businesses that resulted in the absence of a common group strategy with a common objective for Tata Group.The next strategy for Tata Group to implement is the reduction of their annual charitable spending. This will free up more capital for Tata Group to airt them to boast their Stars businesses.The remaining two long-term strategies of L1 and L3, with a slightly higher score of 15 and 14 respectively, in the feasibility test, may be considered to be implemented concurrently with lesser priorities. This is because it will not be easy for Tata Group to reduce the $7.4 billion debt within a short period of time and also not easy for any company to source for, identify and appoint a successor for its Chairman and to change the culture within a short period of time too.The most searing issue now is for Tata Group to conduct the most effective and efficient strategies.9. Implementation, Control and Follow-upFor any MNCs, e.g. Tata Group, it is not easy to implement business integrating like S1 and S2. S1 and S2 described above will only be the identification stage to determine the type of business each belongs to. The physical implementation of the integrating has to be performd with extreme caution as consolidation may result in employees redundancy. aft(prenominal)the consolidation exercise is successfully, the Group Corporate Office (GCO) of Tata Group will have to ensure that they do not launch massive business diversification plans without careful considerations. The follow-up on the implementation of S1 and S2 will have to be monitor by the GCO well with a clear timeline listed out as a guide to prevent any procrastination or delays.As for the implementation of strategy L2, Tata Group has to execute it with caution too. It is not be implemented too hastily to prevent any damage to the companys image due to any to negative press and media reportings (Davies et al. 2003). Any other future charitable spending will have to be discussed and decided more stringently. As stated above under Section 6.2, L2, the reduction will be make gradually over a timeline of 5 years and the GCO of Tata Group will have to adhere closely to this timeline.(2,220 words excluding Executive Summary, headings, sub-headings, in-text citations, and this sentence.)10. ReferencesAswathappa, K. 2010. 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New York, USA McGraw-Hill.AppendixAppendix 1 The seven business sectors of the Tata groupThe seven business sectors of the Tata group1) Communications and information technology2) applied science3) Materials4) Services5) Energy6) Consumer products7) Chemicals(Tata Group 2012)Appendix 2 Kurt Lewins Force Field Analysis originationhttp//www.change-management-coach.com/force-field-analysis.html(Change Management Coach 2012)Appendix 3 The capital of Massachusetts Consulting Group (BCG) Growth Share MatrixSourcehttp//www.quickmba.com/strategy/matrix/bcg/(QuickMBA 2010)