Case Study: TATA Group of Companies

This case study provides a critical analysis of TATA Group of Companies, including their strengths, weaknesses, opportunities, and threats. It also discusses their corporate strategy, governance, and ethics.

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LRN Level 7 Diploma in Business Management
Assignment Cover Sheet
Student name: Farhan Ahmed Hashmi
iQualify UK number: iquk0296
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Unit title: Corporate Strategy, Governance & Ethics
Assignment title: Case Study: TATA Group of Companies
Word Count: 3500 Date: 21/06/2019
I confirm this is my own work and have submitted a plagiarism report:
Name FARHAN AHMED HASHMI
Signature: Farhan
Date:21 June 2019
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Assessor:
Signature:
Date:

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Declaration
I Farhan Ahmed Hashmi hereby declare that this work “Corporate Strategy, Governance
& Ethics” submitted by me, under the guidance of (Professors name) of (Your college Name) is
my work and has never been submitted to any other Institution.

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Table of Content

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Background Information
TATA Group of Companies is one of largest multinational companies whose
headquarters are located in Mumbai, India (Srivastava at el., 2012, p.20). It was established in
1868 where it started as a trading company. The companies in more than 80 countries around the
world. Interestingly, more than 100 of its companies operates independently.
Critical Analysis of TATA Group of Companies
Studies reveal that 32 of the 100 companies are listed publicly. This group is composed
of seven major subdivisions. They include; engineering, consumer products, communication and
information technology, chemical, energy, services, and materials (Chakravarthy & Coughlan,
2011). However, TATA group leading companies are, Titan Industries, Tata Power, Tata Motors,
TATA Chemicals, Tata Communications, and Taj Hotels, TATA Steel, TATA Global
Beverages, TATA Consultancy Services (TCS), and TATA Teleservices (Bnerjee, 2011, p.730).
Recent statistics reveal that all the 32 public listed companies had a market capitalization share
of & 138 billion by 2014. Similar statistics show that 58% of Tata revenue comes from outside
India.
TATA product and services (Jahanshahi at el., 2011, p.255)
Automobiles Appliances Agriculture
Housing Hotel Beverages
Retail Telecommunications DTH television
Crockery Leather Jewellery
Watches and Clocks Financial Services Solar appliances
Food Charter flights Holiday homes

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Critical analysis of the organisation’s environment
Internal Analysis - The Strength and Weaknesses of Tata Group
According to studies, Tata managers uses SWOT analysis for planning and analyzing
Tata companies. SWOT analysis is an essential tool used to analyses the organization current
strengths, weaknesses, threats and opportunity of the specific organization (Baskaran, 2012,
p.178). Reports reveal that Tata has dominated most of the world’s market. This is critically
analyzed through the SWOT analysis technique.
Strengths of the Tata group
Recent reports show that Tata has many strengths that make it be a dominant character in the
worlds market (Singh & Shalender, 2014, p.146). Also, these strengths provide Tata with an
opportunity to access new markets. Some of its strengths include-
 A good and strong distribution network. Over the decades, the Tata group of companies
has developed a reliable distribution network that has enabled it to reach most of their
customers all around the globe.
 Reliable material supplies. According to reports, the Tata group have established a strong
base of authentic raw material suppliers, thus enabling them to have continues production
and avoid any supply chain inconveniences (Mishra & Sharma, 2010, p.10).
 A well-skilled workforce. Tata group has developed a well-skilled team of employees
mainly through training programs; this has improved their productivity. Also, the training
programs have enhanced the motivation of employees, thus boosting their morale.

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 Well established brand portfolio. Studies reveal that Tata has invested most of its
resources in creating a good brand portfolio (Karagiorgos, Drogalas & Giovanis, 2011,
p.21). This approach has enabled Tata to expand their products.
 A strong relationship with the dealer community. Tata has an established a good culture
with dealers, who promote their products and trains their sales team on how to deal with
customers.
Weakness of Tata
According to SWOT analysis on Tata group of companies. The organization has the
following weaknesses-
 Reports show that Tata profitability ratio and their net contribution are below average.
 There is poor financial planning. According to reports, their current ratio and the overall
liquid assets show that the organization can make good use of the cash available
effectively than what is happening now.
 There are still existing gaps in Tata’s product range. Thus, this can give competitors to
penetrate the market quickly and become dominant.
 Also, Tata lacks proper market positioning, which can allow the competitors to penetrate
in most of their market segments.
 Tata experiences high attrition in its workforce. According to reports, Tata uses most of
its resources on development and training as compared to their competitors.
Opportunities of Tata group
 Tata established a taxation policy which aims at opening new opportunities to the
organization, thus maximizing on their profitability.

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 The establishment of new environmental policies which will assist the Tata Group of
companies to obtain a large market share in the product category.
 There have been reported slow industrial growth in the past years. Thus, this serves as a
better opportunity for the Tata group to obtain a significant market share and remain
dominant in their market segments.
 There has been the development of new trends, mainly in customer behavior, this gives
Tata a better opportunity to increase their revenue and develop new products.
Threats facing the Tata group
 The competitors are coming up with new technologies to improves their products, thus
posing a threat to Tata.
 In most cases, the most profitable products are only demanded in peak seasons; this may
affect the profitability of Tata in low seasons.
 Tata has been experiencing stiff competition from its competitors over the last few years.
 Tata is a multinational company. Therefore, it has been experiencing currency
fluctuations in some countries.
Tata organization culture
According to reports Tata group are aiming to transform their organizational culture. It is
argued that the group has been more prone to sourcing technology that is concentrating on
customer’s feedback (Haugh & Talwar, 2010, p.390). It is also, evident that Tata group portfolio,
has been more inclined on business to business to consumer companies. Therefore, they are
trying to identify the solution to that problem. Studies reveal that the Tata group has had some
reported success in the past, for instance, the Tata Tea, Titan, and Air India. Also, Tata Telecom

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and Tata Motors had experienced high growth. Currently, some companies are struggling to put
their products in the market.
However, the individual Tata companies are trying to embed organization culture by
identifying various talents within the organization. For instance, they were capable of detecting
and posting talented employees to fill various positions such as chief transformation officer,
customer champion, and chief culture officer (Jinhui, Zhang & Schroeder, 2011, p.270). This
enhances better operation within the companies. Also, the well-being of any organization
depends on its organizational culture. Therefore, the Tata group been able to provide better and
quality products and services to their customers, thus achieving a better competitive
environment.
STEEPLE Analysis of Tata external environment
Managers at Tata Group of companies use STEEPLE analysis when planning the Tata
companies strategic positioning (Doh at el., 2014, p.100). This analysis involves carrying
investigation of external factors affecting the organization. These factors include-
Social factors
According to studies, social factors include- labor, demographic changes, distribution of
income, and changes in lifestyle. This factors profoundly impacts organization such as Tata.
Availability of cheap work in India contributes to high production in companies such as Tata.
Also, the availability of the Tata group of companies creates employment opportunities for the
local population.
Economic factors

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Authors argue that the GDP of a state is a critical factor for the success of any
organization. For instance, in a country like India, 7.1% of its GDP is realized from automotive
industries such as Tata Motors. The availability of credit, high income and increase in GDP in a
country like India contributes to improvement in automotive industries like Tata Motors.
Environmental factors
Tata companies are making a lot of ecological strategies aimed at protecting the
environment. For instance, Tata Motors is developing environmentally friendly electric vehicles.
Also, the company is innovation fuel-efficient cars such as hybrid cars to reduce the effects of
carbon emissions.
Legal factors
Studies show that government policies have profoundly affected Tata companies in India.
For instance, the taxation rules have impacted the automotive sector by lowering its profitability.
Also, the government is coming up with strategies to scrape petrol and diesel vehicles, thus
posing a significant threat to Tata Motors.
Tata Company corporate governance
Tata Company corporate strategies were founded upon the establishment of fair,
transparent, and ethical governance practices. Most of these practices were being utilized even
before they were authorized, through the adoption of better standards of integrity,
professionalism, honesty and ethical behavior (Chakrabarty, 2012). Tata group of companies
follows corporate governance practices which align with the international standards. Therefore,
the board with its committees is responsible to its stakeholders by enhancing independence,
transparency, fairness and better decision making.

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Tata has a well-developed business model which strengthens its corporate governance.
Also, it implements the concept of balanced scorecard to track the company’s progress on a long-
term basis. Additionally, Tata a well-established code of conduct which guides the company
through the enhancement of, ethics, values and business principles.
Competitors
Studies reveal that the Tata Group faces heavy competition locally and international
level. At the local level, the Tata group faces stiff competition from its old competitors (Becker
& Bruche, 2012, p.234). Whereas, at the International level, the competition is more stringent,
mainly in the automobile industry. For instance, companies like General Motors and Ford serves
as significant competitors to Tata Motors company. However, the Tata group has a dominant
market position at the international level; hence beside the stiff competition, the group remain a
major dominant both at national and international level. For, instance, industries like automobile
and steel has obtained a vast market share globally. However, Tata group efforts to gain a
competitive advantage is facilitated by two main factors:
• It can lower their product prices as compared to competitors.
• It is capable of making changes to their products, making them different from those of
competitors.
Handling, social, ethical, legal and governance issues at Tata group
Tata Corporate Governance
Tata Company corporate strategies were founded upon the establishment of fair,
transparent, and ethical governance practices. Most of these practices were being utilized even

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before they were authorized, through the adoption of better standards of integrity,
professionalism, honesty and ethical behavior. Tata group of companies follows corporate
governance practices which align with the international standards. Therefore, the board with its
committees is responsible to its stakeholders by enhancing independence, transparency, fairness
and better decision making.
Tata has a well-developed business model which strengthens its corporate governance.
Also, it implements the concept of balanced scorecard to track the company’s progress on a long-
term basis. Additionally, Tata a well-established code of conduct which guides the company
through the enhancement of, ethics, values and business principles.
Studies reveal that corporate failures have led to the realization of the proper method for
corporate governance (Khafid, 2012). Therefore, corporate governance establishes a balance
between the social and economic goals among various individuals and organizations. The
process of governance ensures efficiency resources utilization and encourages accountability in
the use of those resources. Also, it aims to enhance the interest of the organizations, individuals,
and the overall society. Appropriate utilization of governance standards enhances the
achievement of corporate goals and attracts investment.
Tata group is a combination of many companies; therefore, it needs to have a sound
governance system to enhance proper ethics among the employees and ensure efficient flow of
activities within the companies mainly during the context of changing the world economy.
Corporate governance is essential at the enhancement of ethical, fair, and transparent practices
( Guna & Herawaty, 2010, p. 54). One if the significant part of the transparency of the Tata
Group is giving its employees the right to know the company activities and practices. Also, they

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ensure their shareholders, who are also granted rights to investigate the internal working of the
company.
The importance of corporate governance among the Tata Group of companies
• Well-Established corporate governance enhances resilience in the capital market as well as
protecting the investors.
• Also, the corporate governance system act as a tool for preventing insider trading.
• Good corporate governance protects the interest of the shareholders and all stakeholders
within their companies.
• Corporate governance act as a tool for obtaining global sustainability among the Tata Group
of companies and enhance them to achieve a significant global market share across the globe.
• It contributes to the creation of more wealth among the Tata Group of companies and enables
them to improves efficiency in terms of business operations.
Evaluation of how Tata Group influences various issues in its strategy
 Healthcare projects. Tata Steel established a Centenary Project during its 100th year. The
health care projects included immunization and childcare, AIDS awareness programs,
and child educations programs (Sharma & Waknaghat, 2014, P.38)
 Economic empowerment. Tata group established economic empowerment programs such
as agriculture in various blocks of India. Therefore, the group estimated around Rs 100
crore aimed at facilitating those programs which were expected to benefit more than 40,
000 tribes living in villages.
 Pollution control. Studies reveal that Tata Motors was the first Indian Company to
establish vehicles with Euro norms. It has taken proper strategies to develop emission

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control technology in India. Also, the company has collaborated with other companies
such as Ricardo to make environmentally friendly engines.
 Restoration of ecological balance. Tata Motors has played a significant role in the
recovery of environmental balance. It has facilitated the plantation of more than 80 000
trees within the townships and other 2.4 million trees which was planted within the
Jamshedpur region. Also, more than half a million trees were planted within the Poona
region. Also, the company has encouraged its suppliers to look for alternative packages
instead of using wood.
 Human Capital. Studies show that Tata Motors introduced various scholarship programs
for the education of their children. Therefore, the company sponsors more than 211
students. Interestingly, 132 of those students are from marginalized sections. Also, the
company provides those students with books and other reading materials.
Tata Group Corporate Social Responsibilities
Scholars argue that social responsibility is the principal role of decision makers to
formulate actions that aim at protecting and improving community welfare (Cricastava at el.,
2012. P.20). Therefore, it the obligations of any business organization to legal effects that can
have positive social implications.
Studies reveal that opinions, beliefs, and attitude of various stakeholders in any company
affects the performance of that particular organization (Berad, 2011, p.102). The culture and
attitude of various company stakeholders, such as the CEO, President, investors, and consumers,
determine the profitability and the future of a particular company. Therefore, different Tata
group of companies such as Tata Motors integrates with foreign companies to achieve success
through knowledge sharing.

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Studies also reveal that the Tata Group has established a various model that enhance
their employees to guide themselves in their day to day business activities, which ensures that
corporate governance is effective. For instance, Tata quality management services utilize the
model of business excellence and proper ethics (Jahananshahi, at el., 2011, p.254). Quality
management model aims at enhancing the Tata companies to attain their set objectives through
specific processes. These processes include business excellence and ethics. Thus, the process has
shaped the dynamic and strong Tata companies. These two models are utilized throughout their
companies, thus enhancing the highest ethical standards.
Reports show that Tata Group has annual awards for those companies that practice
quality ethics in their businesses. The awards named JRD quality value awards, which are
presented year on July 29th during the birth o JRD Tata. However, the Tata group also continued
to enhance ethical practices through benchmarking quality at standards to evaluate business
excellence among their different companies. Also, Tata Group supports its companies through
various incentives, thus strengthening those companies to improve their quality services.
Why does the Tata Group need to be socially responsible?
• Any business organization should make an effort to meet the needs of society.
• Any improvement in the social environment has a significant advantage to the organization
itself and the community.
• When an organization or a company is socially responsible, it becomes free from government
interventions and regulations.
• Social responsibility improves the overall image of the company of an organization.

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• The concept of social responsibility is crucial since the interests of the shareholders and
stakeholders are protected.
• It also provides the organization with enough resources to solve various problems.
• Social responsibilities give better solutions to address multiple issues.
• Studies also reveal that there is a need for social responsibility since the internal activities of
an organization affects the external environment of that organization.
Kansal, Joshi & Batra (2014, p.220) argue that the concept of social responsibility aims
at enhancing the well-being of humankind, through raising concerns on the impact an
organization or a company might have on employees, customers, suppliers, stakeholders,
shareholders, and the communities. Also, organizations have realized the need to establish and
sustainable relationships with the overall community. Therefore, corporate social responsibility
has enhanced a significant advantage in the Indian corporate approach.
Studies reveal that corporate social responsibility was established during the 1970s, after
the formation of various international corporations. CRS is also, defined as the principle
behavior of an organization to the general public, applied in the different noble program
established by the non-profit organizations. Statistics indicate that India is one of the most
developing countries in terms of economy. However, some social, economic issues such as
illiteracy, poor healthcare, and poverty are still present in India. Reports show that their
government lacks enough resources to cope up with those challenges. Therefore, the state of
affair has initiated the establishment of businesses and companies to enhance social development
in that place.

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Therefore, companies such as Tata Group has established corporate social responsibility
programs aimed at helping society (Banerjee, 2011, p.720). Consequently, they have enabled
CSR to become part of their corporate strategy. Moreover, Tata Group of companies has a well-
established CSR team that come up with policies, strategies, and goals for their CSR programs.
These programs are established in the bases of well-defined social approaches and matches with
the organization business expertise. Tata Group employees dedicate part of their time and their
knowledge to be part of various initiatives such as healthcare, education, and environment which
are part of the CSR programs.
Tata Group is mainly focused on social developments whereby they provide sanitation
and medication facilities, building houses, and schools for the well-being of society. Tata group
also partners with non-government organizations to enhance better corporate social responsibility
programs.
The need for CRS to the Tata Group of companies
• It creates consumer awareness
• It enhances better legislation, code of conduct, and sustainability.
• Facilitates the adoption of best practices globally
Business advantages of CSR among the Tata Group of companies
• It boosts the employee's morale.
• It builds brand loyalty to its customers.
• It enhances the company’s reputation.
• It enhances better ethical practice.

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• It facilitates the better internal and external relationship
• It leads to better management and establishment of suitable strategies
How Tata Group is managing tensions between corporate responsibility and maximizing
shareholder value.
 Tata Group agenda about shareholders' interests is to maximize their earnings by
developing strategies that aim at improving the profit margins (Mitra, 2011, p.393).
Therefore, the Tata group manages the tension between corporate social responsibility
and shareholders value through the following means;
 It enhances collaboration among their companies, through various tools such as consumer
goods forum and index sustainability. They support various social activities and social
welfare, such as maintaining better healthcare and environmental protection.
 They integrate different functions such as logistics, human resources, sourcing,
technology, and store operations through various tools such as leadership practices,
Organization roles, and operational processes.
How Tata Group enhanced shareholders value.
The organization announced strategic efforts to boost shareholders value. More capital
was allocated to facilitate shareholders value. The chairman of the Tata group made diplomatic
efforts to promote higher shareholder value, which aims at enhancing positive social impacts
(Gubbi at el., 2010, p.398). He also, mentioned that code of conduct had been the basis of his
commitment to the value system. According to him working together, would enhance them to
rank at the top among many other companies. It is also evident that Tata group brands are always
appealing to customers, thus provides a sense of trust and social responsibility.

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Reports also reveal that the Tata group of Companies has been very successful in recent
years at enhancing value system to their shareholders (Haugh & Talwar, 2010, p.385). Therefore,
the group intends to improve is the business performance, through the creation of shareholder
value. Also, they aim at enhancing long-lasting social impacts on the community. Thus, the
organization tends to focus on its customers by determining their expectations and wants and
provision of products and services to meet their demand.
Conclusion
Tata group main focus has been to acquire a higher market position across the globe. To
gain the international market position, Tata Group has implemented various strategies. Price has
been one of its competitive tools. They provide their products and services at a fair and
affordable price, thus gaining a competitive advantage in the market. The price strategy mainly
focuses on price-sensitive consumers. Also, all their companies have maintained high-quality
products and services which have enabled them to keep the top position at the international
markets.
For every company or organization to maintain a balance between social and economic
objective, it is good to think about corporate social responsibility. Studies reveal that any
company or business organization is entitled to various responsibilities towards the nation,
society, and the overall world. However, corporate social responsibilities are inevitable. Tata
Group has gone a long way at accomplishing its responsibilities and duties to the society and
nation.
Studies reveal that the Tata Group has carried out various initiatives to develop the
overall society. It has led to the advancement and development of human welfare in the
community. Moreover, Tata Group developed various strategies to increase the financial returns.

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Social and environmental protection has been one of their top vital factors. It also has enhanced
moral responsibilities to their employees, shareholders, the society, and consumers. Tata group
has integrated its companies to provide better and quality products and services to consumers, to
meet their satisfaction and expectations.

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