1.The Tata Group has been transformed from a risk-averse, slow-moving giant into a more dynamic and aggressive conglomerate. How much of such a transformation can be attributed to one individual? Discuss the role of the leader in initiating and managing change. Answer
The Tata Group transformation can be greatly attributed to the vision and execution of Ratan Tata. He was greatly responsible for the tremendous transformation because he was able to take his vision for the group and transformed it into a reality. By enforcing a mandatory retirement age policy which removed a lot of top management, who were challenging the core functions of the group and hindering growth, Ratan Tata implemented this as one of the first major changes in is rein.
By replacing these individuals, he made a way for young fresh talent to bring new ideas to the group. In addition he implemented and created a Group Executive Office whose members were represented on the boards of the Tata companies, in addition to Tata Business Excellence Model (TBEM) that he introduced which was the Tata Group’s largest change initiative.
The Tata Business Excellence Model (TBEM) was implemented and maintained through Tata Quality Management Services and its specific processes. Ratan Tata demonstrated a democratic leadership style that entailed openness to ideas with the group. With this his leadership approach he encouraged the executives and managers to be more open, brave and insistent with their ideas and plans and he also played a very supportive role in their proceedings. With the growth vision he had, there were two major goals to be accomplished: I.Targeting the emerging mass market in India through product development and innovations. II.Going global by expanding into new markets with existing products.
Viewing risk as an ability to be where no one has been before, Ratan strongly believed that taking risk was exactly what the group needed. I believe that with these qualities and vision Ratan Tata made it possible for the company to transformed into a more dynamic and aggressive conglomerate that it is todayl. 2.The Tata Group had a presence in a wide range of businesses wince its early days. Later, rattan Tat managed to streamline the Tata Group. What advantages and disadvantages did the group gain through the streamlining of business? Do you think, as of 2009, the Group is still present in too many businesses? Answer
There were a total of 84 companies in several industries under the Tata Group in the early days. With the vision of the new leader, he realized that there was a lot of irrelevant businesses in the group that did not contributed much to the group’s profits and as a result he streamed line and exited a lot of the industries in which the group was not doing well, in order to accomplish his vision and goal and make the group stronger. In my opinion, this was a good move as the benefits outnumbered the disadvantages.
The stream lining made it possible for the group to manage the companies easier. In addition, they were able to cut costs by having a smaller workforce and fewer overheads. Importantly, they improved productivity in the group by eliminating some unnecessary ventures and focusing more resources in certain areas, thus improving revenue. Finally, they were able to gain profits from the sale of some companies.
On the other hand however, this stream lining caused many individuals to lose their jobs, resulting in a lot of homes having decreased incomes. There were also a lot of consumers who were left unsatisfied after the closure of some of these companies. I think that in 2009, many of the businesses are unrelated, they could stream line a little more, seeing that the economy is in a bad condition.
3.The Tata Group has acquired many companies in the last few years. Critically discuss the benefits and the risks associated with Ratan Tata’s growth-through-acquisition strategy, especially in the global context. Answer:
To achieve his goals and make his vision become a reality, acquisition especially in the global context was necessary. These acquisitions for the most part have been good as they allowed the Tata Group to go global, expanding into new markets they didn’t previously imagine of entering. Striving to be India’s best, being present in multiple economies would be one of the best strategies especially in this economy downturn. Expanding into new markets also helps the Tata Group to become more competitive globally. On the other hand, these acquisitions raised the number of company the group was involved with, thus higher costs, and overheads.
Additionally, there may be communication issues as a result of different languages and cultures. The laws and regulations of some countries may prohibit the Tata Group from running their operations in the way they like in certain locations, which could result in losses. Finally acquisitions like these require hefty investments thus with the economy we are facing, business success are not easily guaranteed and as result these acquisitions can fail and investments lost.