International Management Essay

Executive SummaryThis scripted oddball analysis report is disposed(p) for the analysis of the case study of the Tata class The Last Rajah Ratan Tata and Tatas Global Expansion. (Luthans and doh 2009).It leave behind introductory begin with a brief display on the Tata conference of India, with the source and the substitute ( twain short- and coarse- frontier) problems of this biggest complex in India, to be determine and discussed abutting.An analysis of the problems is presented succeeding(prenominal), followed by the criteria of evaluation.A spatiotemporal listing of all study executable courses of action argon presented in the first place the recommended schema(ies) are discussed.The following(a) section go away wield the justifications of recommendations followed by the practiceation, control and follow up.1. penetrationThe Tata root word, Indias biggest come to (Luthans and doh 2009), was grounded by 29- eld old Jamsetji Nusserwanji Tata in 1868. It was first completed as a trading beau monde in Bombay and started pi iering production linees in sectors such as sword, energy, textiles and hospitality (Tata convention 2012).In 1904, Sir Dorab Tata, the aged of Jamsetjis two sons, succeeded Tata class in Ger numerous after Jamsetji passed on.Ratan Tata succeeded as the chairman, spare-time activity the death of his uncle J.R.D. Tata, in 1993 (Tata radical 2012).Today, the Tata sort out consists of to a greater extent than 100 operating companies in s til now contrast sectors (Refer to appendage 1) with summonss in more than 80 countries across 6 continents, exporting products and services to 85 countries.The latest financial figures reflected on its website showed that the bestow revenue of Tata classify was US$83.3 trillion (around Rs 3,796.75 one thousand million) in 2010-11, an addition of 18.8% from 2009-10 (Tata host 2012).With its faithfulness to strong set and excellent product line ethics, the Tata name has been respected in India for more than 140 historic finis.Each Tata lodge or enterprise operates independently and is answerable to its protest board of directors and shareholders.Moving forward, new technologies and de only if leave alone be Tata groups focus, in baffle to develop its backup in India and internationally. Anchored in India with its traditional values and strong ethics, Tata companies are clearing transnational rail line organisationes that bequeath achieve growth through excellence and innovation, temporary hookup balancing the hit-to doe withs of shareholders, employees and civil society (Tata convocation 2012).2. Source worrysWith its grand diversification of business across six continents, Tata faces several scraps. The first problem is to build a consistent vision while being in m each antithetic markets and industries. other challenge is to formulate strategies for all everywhere 100 companies in more than 80 countries.Besides this, a nonher problem of Tata assemblage is the high involvement of Ratan Tata, who is the captain steward of the group of nine cured 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 challenge for Tata is on how to absorb the struggling Corus move. separate challenges for the future include deciding on which businesses to spin-off and which to pursue, what allow happen to the conglomerate during an scrimping slow-down. The about challenge final payment for Tata concourse whitethornbe would be to gormandise the deflower left behind by the energetic and visionary Mr Ratan Tata president of the Tata Group, when he retire (Koontz and Weihrich 2010).3. Secondary Problems3.1 yen term3.1.1 Diversification of investments and businessesFrom the case study, it is sign of the zodiacly that a major problem for Tata Group is its div ersification of its investments and businesses over so many contrastive countries. The group is playing fielded inevitably to the different market situations and the finishing of each idiosyncratic market.3.1.2 The continuation of operation of Corus millsAnother longsighted problem for Tata Group is whether they should exsert operating the struggling Corus mills. As mentioned in the article, the moment Tata Steel in additionk over Corus, it is sloshed with a $7.4 billion debt and the high useable embody of Corus weakens the moolah margins of Tata Steel (Luthans and Doh 2009).3.1.3 Sustainability of its business versus contractability of its merged kind tariff during deliverance slow-down Should there be an economy slow-down, the ability of Tat Group to vex its businesses versus their ability to sustain the social accountable finish, which is developed by Ratans ancestors (Griffin and Moorhead 2010), remains a challenge for Tata Group. The Rata conglomerate forg et engender to decide in the midst of sustaining its businesses and fulfilling this culture. This will be especially toilsome with a $7.4 billion debt already on its books.3.1.4 trouble control in Tata GroupAs mentioned in the article, Mr Ratan is the headman steward, of his team of nine senior executives in the Group Corporate bit, who negotiates major deals himself and immerses himself in the details of his businesses. Ratan Tata is alike the major decision maker in nearly of Tata Groups major deals.At the time when the article was written, Tata Group has not found a equal successor. The item that Mr Ratan Tata is single and childless (Luthans and Doh 2009) thus poses the toughest challenge of who is to fill the vacancy for Tata Group, when Mr Ratan retires.4. epitome4.1 Diversification of investments and businessesThis long term problem will set up to be an obstacle towards its global involution and the development of the company to its full potential, as there is no one blunt group scheme with a super C objective.The lack of a common corporate strategy may act as a restraining force (Singh 2012 key out to accessory 2) against moving Tata Group to its desired built in bed in the global market and likewise against achieving overall productivity of the organization.4.2 The continuation of operation of Corus millsA first musical note at this problem of the Tata Group would simply be to discontinue the operation of Corus mills.However, one of the strengths and agonistical advantage that Tata Group has over its competitors, is fundamentward desegregation ( pile and Jones 2011) like what Hill and Jones (2011, 180) expound steel companies supplying its contract ore inescapably from company-owned iron ore mines. Having its own bulky coal and iron ore reserves changes Tata Group to begin raw steel at low cost in India, and transport it to Corus first-class mills overseas to produce steel products.Furthermore, by looking at the financial data provided in the case study, Tata Motors was the least profitability business in 2007 for Tata Group.With the acquisition of Corus mills and Tatas competitive advantage of back integration, Tata Group plenty make use of Tata Steel and Corus mills to produce low cost steel car parts in set up to st adenosine monophosphate down the cost of sales for Tata Motors. The gross profit margins for Tata Motors can be change magnitude with the cost of sales disregardd (Needles, Powers, and Crosson. 2010).4.3 Sustainability of its business versus sustainability of its corporate social responsibleness during economy slow-down When there is an economy slow-down, it will subject Tata Groups decision on sustaining its business or still sustain its expensive corporate social responsibility, to a great test.A fast and immediate solution, during an economy down-turn will be to get the contributions for charitable causes, such as step-down or terminating the annual $40 me g contribution for charitable acts in Jamshedpur, in rear to sustain its businesses.However, Tata Group will have to consider about the long-term implications of such drastic immediate drop-off or termination of charitable funds. The character of Tata Group may receive a beating in the long run, collectible to negative press and media reportings (Davies et al. 2003), should such measures are implemented drastically and immediately, in sight to sustain its businesses.4.4 steering control in Tata GroupFrom the description of the article, the management personal manner of Tata Group seemed to follow an ethnocentric strategical sensibility and an organizational culture of family culture.A cultural strategic predisposition refers to the particular way which most multi-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 audition to run its overseas operations in line with how they are run back at home (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 closely involved in all major deals negotiations and to a fault 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 guinea pig of organizational culture. Family culture case of organizations withal focusing on hierarchy, orientation to persons, draw heads the company like a sympathize with parent, the management also takes good superintend of employees, underwrites employees are well treated and love continued employment (Trompenaars and H group Aden-Turner 1998). This is clearly reflected in their expense of $ 40 million per annum in the companys home base of Jamshedpur and their excellent employee remuneration insurance policy of workers still getting paid richly till the age of 60 years old and lifelong health care, even if they retire early.This will result in additional expenses for Tata Group in order to fulfill this corporate social responsibility.According to the article, Tata Group has not found a suitable successor 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 find and brand between the Cash cows and Stars (Phadtare 2011 refer to appendage 3) businesses and the oppugn Mark (or Problem Child) and give chase businesses (Phadtare 2011 refer to appendage 3) at bottom the next 6 months.2. To cast down the $7.4 billion debt of Corus inwardly the next 5 years.3. To conquer their annual charitable using up step by step within the next 5 years, but yet not inattention or forgo their corporate social responsibility.4. To divulge a successor within the next two to three years.6. Alternative strategiesA comprehensive listing of all viable strategies will be presented for Tata Group before the recommended strategy(ies) will discussed.6.1 Short term (S)Targeted short-run objectives to achieve within the next fewer months to 1 year from the time of death penalty. 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 clutches 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 lower interest rate, in order to strength the ir profit margins. This is to convert Corus mills into a economic business unit which will enable Tata Group to continue building on its competitive advantage over its competitors, of compound backward integration, 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 intravenous feeding year and a final 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 forgo 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 investm ents and businesses and movement on its competitive advantage of backward integration (of owning iron ore mines) in order to help its automobile business increase profit margin. By gradually trim down their annual charitable spending, Tata Group will be able to fetch these capital to sustain and expand 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 achievable and sustainable with an accurate evaluation of its current resources, nerve competencies and capabilities.With both short term and long term strategies listed higher up and analyzed via the strategy Feasibility control board listed in Appendix 4, the recommended strategies (best 3 out of 5) are as follows S1To identify and group the businesses.S2To decide on wh ich business(es) to keep, which business(es) to liquidate.L2To reduce their annual charitable spending.8. Justifications of recommendationsAfter analyzing the alternatives strategies via the outline Feasibility Table (Refer to Appendix 4), it was immovable that the most executable strategies are S1, S2 and L2 to go under the source and thirdhand 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 lax up more capital for Tata Group to redirect them to boast their Stars businesses.The remaining two long-term strategies of L1 and L3, with a slightly higher(prenominal) 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 fo r 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 critical sales outlet now is for Tata Group to conduct the most effective and efficient strategies.9. Implementation, Control and run throughFor 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 death penalty of the consolidation has to be executed with primitive reprove as consolidation may result in employees redundancy. After the consolidation exercise is successfully, the Group Corporate Office (GCO) of Tata Group will have to ensure that they do not launch enormous business diversification plans without careful considerations. The redirect examination on the im plementation of S1 and S2 will have to be monitor by the GCO closely 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 wrongfulness to the companys image due to any to negative press and media reportings (Davies et al. 2003). any(prenominal) 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 done 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. foreign line of work. quaternate ed. 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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) Engineering3) Materials4) Services5) Energy6) Consumer products7) Chemicals(Tata Group 2012 )Appendix 2 Kurt Lewins Force Field AnalysisSourcehttp//www.change-management-coach.com/force-field-analysis.html(Change Management Coach 2012)Appendix 3 The Boston Consulting Group (BCG) egression Share MatrixSourcehttp//www.quickmba.com/strategy/matrix/bcg/(QuickMBA 2010)