International Management: Issues and Strategies for Tata Group

The report discusses the international expansion strategy of Tata Group, the issues it faces, and strategies to overcome them. The issues include business sustainability, management control, expansion of businesses, and successor. The recommended strategies are to group the businesses, determine operations to be continued and shut down, and minimize yearly charitable expenses.

Running head: INTERNATIONAL MANAGEMENT
International Management
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Executive Summary:
The current report lays stress on the international expansion strategy of the Tata Group,
which has been undertaken in the past under the leadership of Ratan Tata. It has been found out
that the major issues confronting the global business operations of Tata Group include business
sustainability, management control, expansion of businesses and successor. For eliminating these
issues, it is recommended to the organisation to group the businesses, ascertain the business
operations to be carried out and shut down and finally, minimising the yearly charitable expense.

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Table of Contents
1. Introduction:................................................................................................................................3
2. Source problems:.........................................................................................................................3
3. Secondary problems:...................................................................................................................3
4. Analysis:......................................................................................................................................4
5. Criteria of evaluation:..................................................................................................................5
6. Alternative strategies:..................................................................................................................6
7. Recommended strategies:............................................................................................................7
8. Justification of recommendations:..............................................................................................7
9. Implementation, control and follow-up:......................................................................................7
10. Conclusion:................................................................................................................................8
References:......................................................................................................................................9

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1. Introduction:
The current report lays stress on the international expansion strategy of the Tata Group,
which has been undertaken in the past under the leadership of Ratan Tata. The expansions have
been carried out mainly through stake acquisitions in global firms in steel, automobile, mining
and hotel industries. Hence, the report would shed light on the various issues that the group is
facing along with devising out strategies for minimising the problems.
2. Source problems:
The initial problem of Tata Group is to develop consistent vision while operating in
various markets and industries (Buckley et al., 2016). Another problem is to set out strategies for
more than 100 organisations in above 80 nations. The next problem is to find out a way of
absorbing the struggling Corus mills. Finally, the most challenging problem for the group would
be to fill up the vacant space of the visionary and energetic leader, Ratan Tata, after his
retirement.
3. Secondary problems:
The secondary problems confronting the Tata Group in the global arena include the
following:
 Expansion of businesses and investments, since the group is subject to various market
situations and culture of each market
 Continuing the operation of Corus Mills, since it is loaded with debt of $7.4 billion and
greater operating cost minimises the profit level of Tata Steel (Contractor, Kumar &
Dhanaraj, 2015).

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 Business sustainability against the sustainability of corporate social responsibility during
economic downturn with a debt burden of $7.4 billion already in the books
 Management control in Tata Group, as the organisation has not found an effective
successor of Ratan Tata in accordance with the case study
4. Analysis:
For expansion of businesses and investments, there is absence of common corporate
strategy for Tata Group, which might hinder its overall productivity. This might act as a
restraining force and hence, it could be linked with the force field analysis of Kurt Lewin.
Figure 1: Force field analysis of Kurt Lewin
(Source: Deresky, 2017)
Continuing the operations of Corus Mills is a serious challenge for Tata Group due to
high debt burden of $7.4 billion. However, one of the significant competitive advantages that
Tata Group enjoys over its rivals is backward integration, since it has its own sufficient iron ore

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and coal reserves for manufacturing raw steel at lower cost in India. Raw steel is shipped to the
first-class mills of Corus for manufacturing steel products. However, the financial data of Tata
Motors, as provided in the case study, states that it was the least profitable business in 2007.
With the help of competitive advantage and acquisition of Corus Mills, Tata Group could use
Corus Mills and Tata Steel for manufacturing steel car parts at lower costs in order to minimise
the cost of revenue for Tata Motors (Yadav, Tikoria & Dadhich, 2017).
In order to deal with the sustainability issue, Tata Group could minimise contributions for
charitable causes like minimising or terminating the yearly $40 million contribution for
charitable acts in Jamshedpur for sustaining its business operations. However, it might result in
loss of reputation for the group because of negative media and press reporting (Koontz &
Weihrich, 2015).
In relation to the management control in Tata Group, it has adopted family type
organisational culture, in which it takes adequate care of its staffs along with providing continual
employment. This is depicted in the form of contribution of $40 million yearly in its home base
of Jamshedpur and the remuneration policy of its staffs until they reach the age of 60. This would
increase the overall expenses of Tata Group for achieving its corporate social responsibility.
5. Criteria of evaluation:
 For identifying and segregating between the businesses related to cash cows and stars and
the businesses related to question mark and dog within the next half year.

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Figure 2: Boston Consulting Group (BCG) growth share matrix
(Source: Morschett, Schramm-Klein & Zentes, 2015)
 Minimising the debt burden of $7.4 billion of Corus within the upcoming five years
 Minimising the yearly charitable expense within the upcoming five years
 Finding out a successor within the upcoming two or three years
6. Alternative strategies:
Short-term:
S1: Identifying and grouping the various business segments in accordance with the BCG matrix
S2: Determining the business areas to be focused and those to be liquidated
Long-term:
L1: Minimising the debt burden of $7.4 billion of Corus with the help of refinancing of debt loan
at a lower rate of interest

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L2: Minimising the yearly charitable expense of $40 million by 5% per annum in the initial four
years and 10% in the fifth year along with fall in staff benefits as well
L3: Finding out a successor for changing its family type organisational culture
7. Recommended strategies:
Based on the evaluation of the possible alternatives, the following strategies could be
selected:
S1: Identifying and grouping the businesses
S2: Determining the business operations to be continued and those to be shut down
L2: Minimising the yearly charitable expense
8. Justification of recommendations:
The short-term strategies S1 and S2 are selected, since it would help in resolving the
expansion of businesses due to the absence of common group strategy with an identical objective
for Tata Group. The long-term strategy L2 is chosen, since it would help the group in freeing up
additional capital for boosting the stars businesses.
9. Implementation, control and follow-up:
In order to implement S1 and S2, consolidation needs to be executed with utmost care in
order to avoid staff redundancy (Thite et al., 2016). After successful execution, the corporate
office of Tata Group need not launch extensive business expansion plans without careful
considerations. The corporate office needs to monitor the implementation of the strategies with a
specific timeline developed in the form of a guide for restricting any delay or procrastination.

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For implementing the L2 strategy, utmost caution is needed, since quick implementation
might dampen the reputation of the group because of negative media and press reporting. The
minimisation would be carried out gradually in five years and the corporate office of the group
would have to adhere closely to the timeline (Tung, 2016).
10. Conclusion:
From the above evaluation, it could be inferred that the major issues confronting the
global business operations of Tata Group include business sustainability, management control,
expansion of businesses and successor. For eliminating these issues, it is recommended to the
organisation to group the businesses, ascertain the business operations to be carried out and shut
down and finally, minimising the yearly charitable expense.

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References:
Buckley, P. J., Munjal, S., Enderwick, P., & Forsans, N. (2016). Cross-border acquisitions by
Indian multinationals: Asset exploitation or asset augmentation?.
Contractor, F. J., Kumar, V., & Dhanaraj, C. (2015). Leveraging India: Global
interconnectedness and locational competitive advantage. Management International
Review, 55(2), 159-179.
Deresky, H. (2017). International management: Managing across borders and cultures. Pearson
Education India.
Koontz, H., & Weihrich, H. (2015). Essentials of Management: An International, Innovation,
and Leadership Perspective. McGraw-Hill Education.
Morschett, D., Schramm-Klein, H., & Zentes, J. (2015). Strategic international management (pp.
978-3658078836). Springer.
Thite, M., Wilkinson, A., Budhwar, P., & Mathews, J. A. (2016). Internationalization of
emerging Indian multinationals: Linkage, leverage and learning (LLL)
perspective. International Business Review, 25(1), 435-443.
Tung, R. L. (2016). New perspectives on human resource management in a global
context. Journal of World Business, 51(1), 142-152.
Yadav, N., Tikoria, J., & Dadhich, A. (2017). Pathway towards Competitiveness through
Sustainable Enterprise: A Case Study of Tata Group. International Journal of Global
Business and Competitiveness, 12(1), 45-58.