International Management: Analysis of Tata Group's M&A Operations and Alternatives

This article provides an analysis of Tata Group's M&A operations and alternatives. It discusses the source problem, secondary problems, and offers alternatives to improve the company's financial performance, learning growth, and internal business process. The article also suggests the creation of a subsidiary company to augment the organizational structure and sustain the group's cultural values.

Running head: International Management 1
International Management
by
Course:
Tutor:
University:
Department:
Date:

International Management 2
Table of Contents
1.0 Source Problem....................................................................................................................3
2.0 Secondary Problems.............................................................................................................3
2.1 Integration Process...........................................................................................................3
2.2 International Merger and Acquisition..............................................................................3
3.0 Analysis................................................................................................................................3
3.1 M&A Operations..............................................................................................................3
3.2 BCG Matrix......................................................................................................................4
4.0 Alternatives..........................................................................................................................4
4.1 Customer...........................................................................................................................4
4.2 Financial...........................................................................................................................4
4.3 Learning Growth..............................................................................................................5
4.4 Internal business Process..................................................................................................5
5.0 Justification of Recommendations.......................................................................................5
5.1 Creation of Subsidiary Company.....................................................................................5
6.0 Implementation....................................................................................................................5
7.0 References............................................................................................................................7

International Management 3
1.0 Source Problem
The major problems facing the Tata Group are the recruitment of a variety of brilliant people
and sustaining the known value system of the company while establishing a group of
organizations that can survive in the stiff competition in the 21st market as it grows and gets
diversified. Also, the inability of both the old and new companies to meet the exceptional
standards and ethics after the departure of Ratan Tata and attain the standards of the founder
Jamsetji Tata (Hodgetts, Luthans, & Doh, 2006).
2.0 Secondary Problems
Short Term
2.1 Assimilation Process
The group will experience the difficulty in establishing the capability to comprehend the
country’s culture where the acquisition is to occur, in addition to the work environment
(Luthans & Doh, 2009).
Long Term
2.2 International Merger and Acquisition
Tata Steel will face difficulties since it is in possession of Corus whose acquisition possesses
the problems of balancing traditional ways with the current economic trends. The contract
creates a debt of $7.4 billion with the Indian manufacturer of steel; also incorporating the
substantial operating costs of Coru will further harm its profit margins.
3.0 Analysis
3.1 M&A Operations
The management of almost 100 companies is cumbersome as is evidenced in the increasing
inorganic growth of Tata, through subsidized buyouts and in some cases daring transactions,
which poses the problem of assimilation and efficient administration of the range of
companies. The group’s executive has in most cases responded to the challenge of the role of
the business in bringing all these companies under a single umbrella. Tata operates in seven
broad categories namely steel, vehicles, energy, substances, restaurants and buyer
commodities and communication systems (Sen, 2009). For over ten years, the focus of the
group has been establishing a resilient manifestation in the global markets. For instance, the

International Management 4
acquisitions of Tetley for $US432 M has further acquired the majority of the companies in its
area of operation, Anglo-Dutch firm, and Corus which was worth $US11.2 billion. Other
companies with commendable acquisitions include Daewoo Chemical Vehicle Company,
Fords’ Jaguar Land rover acquired by Tata Motors and many others (Mukherjee, 2008).
However, the company should exercise care when assimilating all the companies together.
Forthcoming acquisitions should be focused on methods that will foster easy integration as
they seek to maintain the Tata culture. The Boston Consulting Group (BCG) Growth Share
Matrix is to assist optimize the portfolio companies which are significant to the ever-
increasing inorganic growth.
3.2 BCG Matrix
The exploration shows that Tata Steel, Tata Power, Tata Motors and Indian Hotels are the
best performing with substantial market growth and market share. Therefore, these
companies should be retained, and the own investments improved. Tata Chemicals and Tata
Tea have a significant market share but low market growth and should, therefore, be put on
hold for some time. The rest of the companies like Tata Teleservices and communications
have a small market share and high market growth (Kakani, & Joshi, 2008).
A vital evaluation that would assist the group to improve growth and improve their presence
internationally is to develop a broad business excellence foundation within the group. Such
can be accomplished by adopting the balanced scorecard measured strategy to examine the
company’s performance based on their internal competencies evaluated by the key
performance indicators (KPIs).
The benchmarks of output distinction illustrated by the poised tally are based on four
fundamental aspects that provide equilibrium to each other strategic framework namely
consumer, monetary, in-house commercial practice and Knowledge and development (Tata
Motors Ltd., 2008)
4.0 Alternatives
4.1 Customer
To seek to provide sustained exceptional products to clients with specified customizations,
and to develop Tata Nano to sustain the international standards concurrently.

International Management 5
4.2 Financial
To enhance financial performance about cash flow by guaranteeing positive present current
cash flow value. This will assist in the prompt repayment of the lump sum parts of the debt.
Furthermore, it will also aid in the re-focus into the reward of dividends to shareholders to
ensure continuous payment.
4.3 Learning Growth
To develop several plants in the shortest time possible to meet the service obligations of Tata
Nano (Blitterswijk, & Karadshov, 2009).
4.4 Internal business Process
To achieve that best from the acquisition agreement of Jaguar and Land Rover
5.0 Justification of Recommendations
5.1 Creation of Subsidiary Company
The present sustainability pillars of Tata include Tata Trusts, relief team, societal projects,
and Tata Quality Management Services (TQMS). The establishment of a subsidiary company
can augment well with this organizational structure in addition to sustaining the group’s
cultural values which are ecological agency. It would operate like any other business units of
Tata, with the exception that it would initially exist as a support center instead of a profit
center. Most of the company roles will be centralized by the subsidiary. Also, other functions
of the subsidiary would comprise of both internal and external consultation roles, an
innovation center, a unit of financial reporting and audit, and a team for fundraising both
internally and externally (Freeman, Gopalan, & Bailey, 2008).
6.0 Implementation
Global managers can adopt various methods to implement, control and monitor the
company’s functions (Jha, & Joshi, 2009). Therefore, the company will;
• Implement the first-hand strategy through a complicated communication process of the
company including business unit communications or training in county hall rooms or
permitting the involvement of employees in the process.
• To officially create a distinct capitalized corporate subsidiary. Establish the guidelines for
the use of the additional revenue generated from all company portfolios will be invested for

International Management 6
development in the future. Team up with significant investors while drafting these rules
(Goldstein, 2008).
• Create a cross-company unit comprising of senior managers, to authenticate that all
internal opportunities for continuance have been ascertained and discussed.

International Management 7
7.0 References
Blitterswijk, M. V., & Karadzhov, R. (2009). Financial and Strategic Analysis of Ford Motor
Company and Tata Motors. Studenttheses@ CBS.
Freeman, K., Gopalan, S., & Bailey, J. (2009). Achieving Global Growth through
Acquisition: Tata's Takeover of Corus. Journal of Case Research in Business and
Economics, 1, 1.
Goldstein, A. (2008). The internationalization of Indian companies: the case of Tata. Center
for the Advanced Study of India, Casi working Paper Series, (08-02).
Hodgetts, R. M., Luthans, F., & Doh, J. P. (2006). International management: Culture,
strategy, and behavior. McGraw-Hill Companies.
Jha, V. S., & Joshi, H. (2009). Relevance of total quality management (TQM) or business
excellence strategy implementation for enterprise resource planning (ERP)–a
conceptual study. In 12th International Conference on Information Quality (ICIQ-
2007) at MIT (pp. 9-11).
Kakani, R. K., & Joshi, T. (2008). The Tata group after the JRD period: Management and
ownership structure.
Mukherjee, R. (2008). A Century of Trust: The Story of Tata Steel. Penguin Books India.
Sen, S. (2009). Tata Group: transforming the sleeping elephant. IUP Journal of Business
Strategy, 6(1), 31.
Tata Motors Ltd. (2008) Tata Motors Ltd. Corporate Sustainability Report 2008:
CORPORATE SUSTAINABILITY REPORT, 1-174.