The Last Rahaj: Retan Tata - Challenges Faced by Tata Group

The case study of The Last Rahaj: Retan Tata discusses the challenges faced by Tata Group due to their aggressive expansion. The emergence of two different organizational structures, divergence of ventures and investments, and human resource issues are some of the problems faced by the company. The article provides an analysis of these issues and suggests alternatives such as employing development practitioners, considering the successor, retaining older workers, and forming a team of outside professionals. The implementation, control, and follow-up of these alternatives are also discussed.

Running head: THE LAST RAHAJ: RETAN TATA 1
The Last Rahaj: Retan Tata
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Table of Contents
1.0 Source problem..........................................................................................................3
2.0 Secondary problems...................................................................................................3
2.1 Emerging organization structure............................................................................3
2.2 Divergence of ventures and investments...............................................................4
2.3 Human resource - Tata Global Beverages.............................................................4
3.0 Analysis.....................................................................................................................4
3.1 Organization structure, the divergence of ventures and investments....................4
3.2 Human resource Tata Global Beverages...............................................................5
4.0 Alternatives................................................................................................................6
4.1 Tata group may consider employing development practitioner............................6
4.2 Ratan Tata will have to consider the successor Ratan...........................................6
4.3 Retaining older and experienced workers..............................................................6
4.4 Forming a team consisting of outside professionals..............................................7
5.0 Recommendations and justifications.........................................................................7
6.0 Implementation, control, and follow-up....................................................................7
7.0 References..................................................................................................................9
APPENDIX A................................................................................................................11

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1.0 Source problem
Among the business titans in Asia, Ratan N. Tata stands out for his modesty. The Tata
group is a global enterprise that was found in 1868, by Jamsetji Tata (Sen, 1975). With their
headquarters based in India, the group operates in more than 100 countries worldwide with more
than 100 independent companies (Thomsen, 2011). The company is involved in goods and
services including; software, beverages, steel, cars, consulting services, hotels, and phones. As at
2015/2016, the revenue earned by Tata was $103.5 billion and the employee strength was of over
660,000 people ("Standalone Results", 2018)
The case explains the aggressive expansion implemented by Tata group in the last several
years under the leadership of Ratan Tata. This aggressiveness and diversification led to
challenges and issues that affected the company on a long term and short-term basis as discussed.
2.0 Secondary problems
The rapid growth of Tata group resulted in the emergence of 300 subsidiaries companies
in different 50 businesses ("Standalone Results", 2018). This aggressive growth resulted in
different problems, which were short-term and long-term. They included:
2.1 Emerging organization structure
According to Osagie (2012), the emergence of two different organizational structure in
different geographical location can represent a significant problem in productivity and quality
when the aggressive acquisition of business occurs. From the case study of Tata, the group tried
to trade their motors from their production under another company in Britain named “Rover,”
but the venture did not succeed as it lasted for only two years along with critics about quality
(Ramamurti and Sigh, 2009). Dailymail (2012), Listed the car as the least reliable car in the UK

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with a failure rate of about 70%. It was followed by another affiliate of Tata jaguar with the
failure rate of 45% (Massey, 2012).
2.2 Divergence of ventures and investments
The aggressive growth of Tata led to the acquisition of several companies and other
companies merged such as the acquisition of Tata BP solar limited and Daewoo’s truck unit.
Therefore, in case of acquisition of merger, a process should be installed to manage cultural
differences between organizations. This created a long-term issue for Tata group since it is
almost impossible to create one strategy to serve more than 100 companies with 300 subsidiaries
(Taylor, 2000). A more aggressive risk deal is faced by Tata group at the global level where
some measures are being implemented by Tata to compensate for their global competitive
weakness.
2.3 Human resource - Tata Global Beverages
Due to complaints by workers against corporation concerning abuse and exploitation of
tea pickers, an investigation was launched against international Finance Corporation. The
workers were complaining about poor working conditions, long working hours with poor wages,
and being forced to buy shares without adequate information ("Standalone Results", 2018).
The investigations realized that ICFC could not address and identify some issues
regarding social, labor, and environment that could violate the international and India law.
3.0 Analysis
3.1 Organization structure, the divergence of ventures and investments.
Cross-Cultural management must be applied in MNC’s such as Tata Group to overcome
future obstacles that will create conflict within the organization, further insight whether the new

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employ or current employee may want to continue with their previous culture, which in turn may
lead, to lack of cooperation in the organization should be looked at. This may result to emotional
conflict thereafter affect the impact on job performance, individual performance and Tata group
success (Genc and Cuervo-Cazurra, 2008). Tata group operates more than 300 subsidiaries from
100 companies. Therefore, an old strategy or an organized structures with no reforms will results
in critical emotional conflict, high staff turnover, and reduce in social assimilation between the
employees in the firm. As acquisitions and simultaneous structural integration still being used, it
may result in favoritism and biased atmosphere within the firm (F.Pinar, 2010). Accordingly,
deep-level diversity is the variances in delicate, complexity to perceive attributes such as
attitude, value, and personality. While surface-level diversity is characterized by an obvious
variance and easier to distinguish such as gender, race, and age (F.Pinar, 2010). Refer to
Appendix A.
3.2 Human resource Tata Global Beverages
Tata tea is number one brand in India and is the large brand by value and volume. The
Tata Global Beverage (TGB) is ranked second in the world and host many regional and global
brands in the world according to Tata Global Beverage (2016), Tata tea had a turnover
contribution of 36%.
The pride of Tata as mentioned by Srivastava et al., (2012) comes from its strong
corporate social responsibility across all their business entities. The TGB’s culture is helped by
five core values that act as a guiding principle for the entire organization. One of their core value
is doing well which ensures that they do the right thing to both community and environment and
their actions are ethical.

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Having strong corporate responsibility image, it was a blow for the company to be linked
to human and labor rights abuse (Shah, 2014). The image and the reputation of the company
were affected, and the trust that the company received from the shareholders, suppliers,
consumers, and employees was compromised. When the image of the company has been
tarnished, it is hard for the public and stakeholders to restore belief in the company. This may
affect the sale of production, as consumers will neglect the company that has broken their trust
(Thite, 2013).
4.0 Alternatives
4.1 Tata group may consider employing development practitioner
Tata group may consider employing development practitioner who is an expert in applied
behavioral science, experience in organizational development, and conversant with different
culture (Khanna and Palepu, 2010)s. This will help in bringing different groups together and
making strategies that will favor all parties
4.2 Ratan Tata will have to consider the successor Ratan
Tata will have to consider the successor (Hult, Snow and Kandemir, 2003), who will
implement strategies that will be welcomed by both groups. The successor must work in hand
with strategists to ensure all workers recognize the culture of the organization. Establishment of
(TQM) total quality management facilities should also be employed to ensure brands such as
Land Rover and Jaguar stabilize in quality.
4.3 Retaining older and experienced workers
With the increase in the development of technology, managers tend to neglect older
employs for reasons such that they are resistant toward new technology (Henkens, 2005).
According to Heywood et al (2010)., older workers have are productive, experienced and have

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higher motives. The successor Natarajan Chandrasekaran should consider mixing old workers
and new workers for better performance.
4.4 Forming a team consisting of outside professionals.
Plans have been made by the new CEO taking over the operations of the firm, small
firms of Tata that do not bring many profits are going to be merged. This will increase the
efficiency of the company (Mohile, 2017). One of the directors of the board Ajay Piramal
suggested that a group of outside professional be brought up. This was in an attempt of creating
independence and unbiased decisions and inputs.
5.0 Recommendations and justifications
Culture conflict management will be supervising, monitoring, and integrating harmony
between cultures within the firm (Choi, 2013). This implies that in hiring an expert, the expert
must be well conversant with the different cultures within Tata Group organization.
Forming group consisting of outside professionals
It is important to have the contribution of older workers who have been with the firm for
long. This will help in creating more productive decision-making. When these decisions are
blended with those of hired expertise, the new C.E.O will have an easy time in making a
decision.
6.0 Implementation, control, and follow-up
Adopting Macoby and Scudder 5 steps of managing conflicts associated with different
background
1. Except – conflict can be foreseen by getting information

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2. Stop – a strategy can be formed that prevents conflict from occurring
3. Identify – you must understand what the conflict is all about
4. Manage – be diplomatic in managing conflicts
5. Resolve – get good ways of solving your conflicts (Maccoby, 2012).
About internal and the external team, it is important to delegate work to different groups
regarding their expertise. This will ensure that specialization is maintained and a good response
is gotten from all areas.

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7.0 References
Acar, F. P. (2010). Analyzing the effects of diversity perceptions and shared leadership on emotional
conflict: A dynamic approach. The International Journal of Human Resource Management,
21(10), 1733-1753.
Belo-Osagie, H. (2012). Financial management digest: Emerging risk management challenges.
Journal of Financial Management & Analysis, 25(1), 91.
Choi, Y. (2013). The influence of conflict management culture on job satisfaction. Social Behavior
and Personality: an international journal, 41(4), 687-692.
Cuervo-Cazurra, A., & Genc, M. (2008). Transforming disadvantages into advantages: Developing-
country MNEs in the least developed countries. journal of international Business Studies,
39(6), 957-979.
Heywood, J. S., Jirjahn, U., & Tsertsvardze, G. (2010). Hiring older workers and employing older
workers: German evidence. Journal of population economics, 23(2), 595-615.
Hult, G. T. M., Snow, C. C., & Kandemir, D. (2003). The role of entrepreneurship in building
cultural competitiveness in different organizational types. Journal of management, 29(3),
401-426.
Maccoby, M. (2012). Managing Conflict between Bureaucratics and Interactives. Research-
Technology Management, 55(2), 55.
Srivastava, A. K., Negi, G., Mishra, V., & Pandey, S. (2012). Corporate social responsibility: A case
study of TATA group. IOSR Journal of Business and Management, 3(5), 17-27.

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Standalone Results. (2018). Tataglobalbeverages.com. Retrieved 18 February 2018, from
http://www.tataglobalbeverages.com/investors/investor-relations/results-and-
presentation/Standalone-results
Taylor, C. R. (2000). Emerging issues in marketing. Psychology & Marketing, 17(6), 441-447.
Ramamurti, R., & Singh, J. V. (Eds.). (2009). Emerging multinationals in emerging markets.
Cambridge University Press.
Khanna, T., & Palepu, K. G. (2010). Winning in emerging markets: A road map for strategy and
execution. Harvard Business Press.
Sen, S. K. (1975). The house of Tata, 1839-1939. Calcutta: Progressive Publishers.
Thomsen, S. (2011). Trust ownership of the Tata Group.
Thite, M. (2013). Interview with Ratan Tata, Chairman Emeritus, Tata Group. Global Business
Review, 14(3), 549-552.
Shah, S. (2014). Corporate social responsibility: a way of life at the Tata Group. Journal of Human
Values, 20(1), 59-74.

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APPENDIX A