Challenges Faced by Tata Group: A Case Study

This case study analyzes the challenges faced by Tata Group, including talent retention, ethical standards, and global expansion. Recommendations are provided for implementation.

Running head: MANAGEMENT
International Management
Name of the student
Name of the university
Author Note:

2
MANAGEMENT
Source Problem
The Tata group is a global enterprise that has its business operations ranging from the
likes of steel, motors, consultancy services, beverages, tele-services along with a large
number of different kinds of telecommunication services and hotels. The large variety of the
businesses operations and the large amount of revenue and expenses incurred by the company
to control the businesses requires a huge employee strength of more than 700,000 people
globally. There are different kind of challenges faced by the business organization which
includes the likes of the talent retention and retention of the founding values of the system.
According to, Pattnaik, Lu & Gaur (2018) the failure to generate the coherent strategy of the
organization in the proper manner can also be the main reason for the creation of different
kinds of the source problems. Apart from this the involvement of Ratan Tata personally in the
different business deals and acquisitions concerning the likes of the steel, automobiles and the
telecommunications industry is also termed as a major problem for the industry. The major
source issue of the organization has thus been identified. The identification of these source
problems can thus be said to be as important achievements in the success and sustainability of
the business organization (Tata.com, 2019).
Secondary Problems
Secondary problem 1
Like the source program of the organization, a number of different kinds of the
secondary problems are also found in the following company. The expansion policy of the
business organization has resulted in an increase in the management bandwidth with the
maintenance of a number of different kinds of ethical standards (Contractor, 2016). The
following is generally considered to be the vast number of different types of the individual
business operations that re located across a number of global geographical locations. The

3
MANAGEMENT
national culture of the company can be referred to as the unavoidable consequence (Singh et
al., 2018). The Tata Group finds it difficult to manage the founding ethical and CSR
standards all across its different units around the globe.
Secondary problem 2
The Tata group of industries has taken huge advantage of the cheap labour and
technological talent along with the vast amount of raw material availability in India.
However, the company fails in the long run as because the management of the company faces
constant threat from the other companies in order to acquire the talent and finally the share in
the competitive market from that of the local competitors and the deep pocketed
multinationals (Özcan, Mondragon & Harindranath, 2018).
The two different secondary problems that has been identified have thus proved to be
the main hurdles for the company in their quest for expansion across the globe. The global
expansion must be completed in a proper manner in order to ensure a smooth range of
business operations (Yin & Jamali, 2016).
Analysis of two secondary problems
Analysis 1
The consideration of the hugeness of the Tata Group, Ratan Tata himself admitted
that his company was up against a number of business challenges that can lead to the
underlying of the identity of the Company’s commitment to the presentation of a corporate
social responsibility. According to, Jain (2018) the maintenance of the CSR initiatives is one
of the most important in the business as because the policies and the procedures of the
company clearly provided a separate entity for the organization and the business
organization. The group’s internal commitment to its staff, some of which were offered full
pay till retirement age and the lifelong health care (Kolk, 2016). The strategy of the business

4
MANAGEMENT
organization will have to be reviewed in the future as the company as it rolls out its CSR
programs in the different areas where the company has its business and manufacturing units
(Kennedy, Welch & Monshipouri, 2017).
Analysis 2:
The analysis of the case study reveals that Tata Company was facing challenges in
acquiring talents. The companies held by Tata faced several issues like unsafe working
environment coupled with diversity issues. There was a huge disparity in the income of the
high designation managers and the lower level staff (Luetge, Armbrüster & Müller, 2016).
Alternatives:
Alternatives 1:
Tata could restructure its human resource policy by considering the issue of disparity
in payments of the employees. The company, under the leadership of the apex management
should restructure the compensation structure of all the employees to ensure that the
employees paid legitimately. This would enable the company to create a more employee
centric organisational culture (Schmitt et al. 2015).
Alternatives 2:
Tata should divest in companies like Corus and invest in more profitable ventures.
This is because, in order to acquire companies, Tata has to invest immense amount of capital.
Now, if the company incurs a debt and fails to generate sufficient profits, it would add to the
immense expenditure Tata has borne to acquire the company. It is advisable in this case that
the Indian global business conglomerate should acquire more profitable ventures (Krapl,
2015). This would enable the company to make the loss incurred on the acquisition of non-
profitable ventures.

5
MANAGEMENT
Alternatives 3:
The company namely, Tata should diversify its losses incurred on loss bearing
ventures on its different business verticals and markets. It can be pointed out that Tata has
investment in different sectors which includes food and beverage, metal business, automobile
and share market. This means that the business conglomerate can diversify its losses over its
different business units (Aguilera-Caracuel, Guerrero-Villegas & García-Sánchez, 2017).
Alternatives 4:
Tata should invest more capital in its existing ventures in which the company has
global leadership. For example, globally, Tata holds high position in the trucking market.
This means that the company should inject more capital in its trucking business to
manufacture more advanced trucks. This would enable the company to generate higher
revenue (García-Kuhnert, Marchica & Mura, 2015).
Recommendations and Justification
Alternative 1 or Alternative 2:
It can be recommended that Tata should establish a parity in the salary packages of
employees of different designations. This would enable the company to retain its employees.
Alternative 3 or Alternative 4:
The company should diversify the losses over the existing business units. This means
that the company should make strategies to increase profit generation in verticals like steel
and automobile. This would enable the company to diversify its losses.
Implementation Control and follow up:

6
MANAGEMENT
The implementation strategy should commence under leadership of the apex
management of Tata seated in Mumbai, India. The company should all the employees
employed with its global branches. The implementation strategy should aim to deal with the
presents problems which Tata is facing. The apex management should follow up the
development with the business managers.

7
MANAGEMENT
References:
Aguilera-Caracuel, J., Guerrero-Villegas, J., & García-Sánchez, E. (2017). Reputation of
multinational companies: Corporate social responsibility and
internationalization. European Journal of Management and Business
Economics, 26(3), 329-346.
Contractor, F. J. (2016). Tax avoidance by multinational companies: Methods, policies, and
ethics.
García-Kuhnert, Y., Marchica, M. T., & Mura, R. (2015). Shareholder diversification and
bank risk-taking. Journal of Financial Intermediation, 24(4), 602-635.
Jain, D. (2018). Who’s at Fault? Tata Sons in 2012 or Mistry in 2016: A Case Study on Tata
Group. IIUM Journal of Case Studies in Management, 9(1), 1-6.
Kennedy, E. T., Welch, C. E., & Monshipouri, M. (2017). Multinational corporations and the
ethics of global responsibility: Problems and possibilities. In Human Rights and
Corporations (pp. 123-147). Routledge.
Kolk, A. (2016). The social responsibility of international business: From ethics and the
environment to CSR and sustainable development. Journal of World Business, 51(1),
23-34.
Krapl, A. A. (2015). Corporate international diversification and risk. International Review of
Financial Analysis, 37, 1-13.\
Lanthier, P. (2018). Tata becoming multinational: a long-term process. Entreprises et histoire,
(1), 76-87.
Luetge, C., Armbrüster, T., & Müller, J. (2016). Order ethics: Bridging the gap between
contractarianism and business ethics. Journal of Business Ethics, 136(4), 687-697.

8
MANAGEMENT
Özcan, G. B., Mondragon, A. E. C., & Harindranath, G. (2018). Strategic entry and
operational integration of emerging market firms: The case of Cemex, Beko and Tata
Steel in the UK. Journal of Business Research, 93, 242-254.
Pattnaik, C., Lu, Q., & Gaur, A. S. (2018). Group affiliation and entry barriers: The dark side
of business groups in emerging markets. Journal of Business Ethics, 153(4), 1051-
1066.
Schmitt, A. J., Sun, S. A., Snyder, L. V., & Shen, Z. J. M. (2015). Centralization versus
decentralization: Risk pooling, risk diversification, and supply chain
disruptions. Omega, 52, 201-212.
Singh, D., Pattnaik, C., Gaur, A. S., & Ketencioglu, E. (2018). Corporate expansion during
pro-market reforms in emerging markets: The contingent value of group affiliation
and diversification. Journal of Business Research, 82, 220-229.
Tata.com. (2019). Retrieved from https://www.tata.com/
Yin, J., & Jamali, D. (2016). Strategic corporate social responsibility of multinational
companies subsidiaries in emerging markets: Evidence from China. Long Range
Planning, 49(5), 541-558.