Analyzing Enterprise Risk Management Framework for Tata Motors, India

This report provides a comprehensive analysis of the Enterprise Risk Management (ERM) framework implemented by Tata Motors, India. It begins with an introduction to Tata Motors, highlighting its position as a leading automobile company and the need for an effective ERM framework to mitigate risks. The report then delves into the core components of the ERM framework, including event identification and risk assessment, focusing on the identification of key dependencies and impacts on manufacturing operations. It discusses risk responses, addressing challenges such as rapid technological changes, evolving customer demands, and competitive efficiency within the business. The report also explores control activities implemented by Tata Motors, such as board reviews, documentation, adherence to the Tata Code of Conduct, and the use of ERP systems. Furthermore, it emphasizes the role of information and communication technology in risk management, detailing how these technologies help in monitoring industry trends and external environments. The conclusion summarizes the key findings and reinforces the importance of a robust ERM framework for Tata Motors' continued success.

Running head: ENTERPRISE RISK MANAGEMENT FRAMEWORK FOR TATA MOTORS, INDIA
Enterprise Risk Management Framework for Tata Motors, India
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1ENTERPRISE RISK MANAGEMENT FRAMEWORK FOR TATA MOTORS, INDIA
Table of Contents
1. Introduction..................................................................................................................................2
2. Discussion....................................................................................................................................3
2.1 The Enterprise Risk Management Framework......................................................................3
2.1.1 Event Identification and Risk Assessment.....................................................................3
2.1.2 Risk Response.................................................................................................................4
2.1.3 Control Activities............................................................................................................6
2.1.4 Information and Communication....................................................................................8
2.1.5 Oversight and Monitoring.............................................................................................10
3. Conclusion.................................................................................................................................11
References......................................................................................................................................13

2ENTERPRISE RISK MANAGEMENT FRAMEWORK FOR TATA MOTORS, INDIA
1. Introduction
Tata Motors Limited (TML) is considered as a $42 billion organization. It is also
regarded as one of the largest automobile company in India. The company is the largest and
leading producer and global manufacturer of utility vehicles, trucks, buses, cars and defence
vehicles. The company has a large global footprint and have thus consolidated their position by
making various acquisitions and mergers (Sekar, Gowri and Ramya 2014). Tata Motors has
made a remarkable position within the global marketplace with their diverse portfolio of both
commercial and passenger vehicles. Hence, they have established their position in the Indian
vehicle marketplace by leading the industry for several years.
With the growth of the organization in the leading market, the company also requires the
need of implementing an efficient enterprise risk management framework. This kind of
framework would help the organization in mitigating the risks approaching the organization
(Gandhi 2017). In Tata Motors, the Board of Directors and Enterprise Risk Management team
are primarily responsible to deal with the approachable risks and take necessary decisions to
avoid them in the future. The implementation of Enterprise Risk Management program would
help the business units in addressing the risks associated within the objectives of the company.
The risks approaching the business of the organization would be managed with the help of cross-
functional involvement and communication throughout the processes of business (Gupta and
Sharma 2014). This report thus discusses about the identification of risk events, techniques of
assessment for approachable risks, response to risks, different control activities, communication,
oversight and monitoring over the events.

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2. Discussion
2.1 The Enterprise Risk Management Framework
2.1.1 Event Identification and Risk Assessment
With the rise of upcoming risks, the Tata Motors Limited (TML) have conducted several
assessments for the identification of key dependencies and impacts over the manufacturing
operations. During the conduction of assessments, the company had primarily sought to establish
a value over the associated externalities. The primary purpose of conducting the assessment to is
to understand the different forms of embedded risks within the supply chain of the business
(Grant 2016). This would also help in tackling the risks approaching towards the business. There
are various situations of risks based on several aspects that could incur within the organization.
The various situations of risks might put a negative impact towards the organization.
The high demand for new automobiles within the market can be determined with the help
of different economic conditions, disposable income of their customers, credit availability,
interest rates, tax and environmental policies. The various opportunities and risks can be
prioritized at TML based on the potential of recurrence, frequency of occurrence and the history
of occurrence of risks (Hallegatte and Rentschler 2015). The potential impacts that might affect
TML are generally measured with the help of different variables such as operation, reduction,
revenue and many others.
The different risks that might affect TML are differentiated in three sections. These risks
are classified as – social, environmental and economic. Based on a proper understanding of the
lacking areas, it would be easy for TML to analyse the current systems and thus take necessary
take necessary actions for mitigating them. The TML also considers the safety of their customers
and their employees against any situation of risks that might approach the organization (Patel and

4ENTERPRISE RISK MANAGEMENT FRAMEWORK FOR TATA MOTORS, INDIA
Prajapati 2014). In order to gain control over the risks approaching the organization, TML also
conducts several kind of training program for their employees so that they would be able to
understand the different probable situations of risks and thus take proactive steps to mitigate
them.
The training programs that are organized within TML are mainly conducted by several
industrial experts who have more than 40 years of experience in their particular fields (Goodall
2014). These trainers of risk management programs discuss about the basic knowledge of experts
regarding the requirements. They also discuss about the techniques of risk identification,
management of risks and different recovery methods (Kale 2017). There are also various kind of
areas such as risks based on car safety that would help the organization in designing an efficient
methods for their innovative model of cars. This would help in the prevention of accidents on
roads and thus also preventing several cases of accidents on the roads.
2.1.2 Risk Response
Based on certain observations over the situations of risks, there are some areas that need
to be assessed. Some of the discussed risks within the context are:
1. Rapid Changes in Evolving Technology
Context – In the recent times, there has been a huge shift in the automobile industry of
TML. This is due to reason of rapid advances that are made with new technologies such as
autonomous cars and electrification (Sharmelly and Ray 2018). This kind of significant changes
made within the industry would majorly increase situations of risks based on delivering bigger
products that are mainly demanded by the present and future customers.

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Mitigation Procedures – TML in order to mitigate the various risks that approach the
organization primarily invest in R&D. The R&D department also continue to focus on the key
areas of technology that would include connectivity, electrification and autonomy. The
organization is also striving to work hard in the areas regarding performance of their products
(Carlos 2015). They have also invested in developing such vehicles that would be efficient in
reducing the consumption of fuel.
2. Evolving Demands of Customers
Context – The preferences of customers often change in the mature markets. The
customers are mainly putting their focus on small and environment friendly vehicles. There are
many markets in which the customer preferences are mainly been driven by the concerns
regarding the environment. The increasing prices of fuel are also an important matter of concern
for consumers and hence they always choose such vehicles that would reduce their monthly
budget (Goswami and Kumar 2018). The changing preferences of customers often poses a huge
risk towards the organization in understanding their demands and also meeting up the
expectations.
Mitigation – In order to mitigate the risks based on changing demands of customers,
TML is focused on the development of new model of vehicles based on different price segments.
These vehicles would also have different capabilities that would suffice to the needs of the
customers. One such example of the innovation in their vehicular models is the launch of the first
bio-methane engine for buses in India (Buckley and Hashai 2014). With the help of high-level of
innovation and advancement in technological aspects, the portfolio of their product and services
have increased in the recent years. The high amount of innovation among the various services
could be developed according to the changing preferences of the consumer.

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3. Competitive Efficiency within Business
Context – The TML has initiated various programs to optimise the efficiency of their
performances. Although, TML have optimised their several operation programmes based on
innovative nature of their product, there is a certain risk that the program might not be able to
deliver the predictable efficiencies (Kotabe and Kothari 2016). If the company does not provides
the desired results to the business, there is also a risk that the company might not be able to
achieve their targets.
Mitigation – The company had also launched different kind of initiatives that would be
able reduce the complexities arising within the business and product complexity. The company
would also not be able to benefit the economy of the organization on a larger scale. TML should
implement a robust project that would be able to ensure that the set targets of the organization
are met as per proper standards. In order to tackle the challenges, TML has also initiated
different projects that are dependent on Balanced Score Card (BSC) (Khameneh, Taheri and
Ershadi 2016). In order to mitigate the various challenges faced by the organization, TML is also
in the process of developing different analytical data tools that would aid the business in making
intelligent decisions.
2.1.3 Control Activities
In response to the various activities based on risks, TML also puts focus on certain
activities for controlling the situations of risks. The various controls have mainly been planned
and designed for providing an assurance in regards to the risks based on financial reporting,
protection of business assets from unauthorized loss, monitoring over business operations,
regulations and compliances (Mangla, Kumar and Barua 2015). The different activities of control

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over the risks approaching the organization mostly align with the business processes and
practices.
Some of the necessary control activities based on the associated risks that could be
implemented by TLM are:
1. The Board of Directors should perform a review over the audit plans, adequacy of
internal controls, and significant findings of audit. They should also perform a regular check over
the various accounting practices and policies in order to gain control over the business related
activities. This would further help them in the identification of the approached risks that might be
faced by the organization.
2. The organization should also perform regular documentation over their project and
other business processes. They should also conduct tests over financial closing, entity level
controls and computer controls (Kumar Singal and Kumar Jain 2014). The focus over these
processes of control are mainly been defined under the Sarbanes-Oxley Act.
3. TML is also undertaking an ongoing program based on the reinforcement of the Tata
Code of Conduct. This particular Code of Conduct is able to cover different activities based on
the integrity of ethical conduct, financial reporting, and conflicts over the review of interest,
report over concerns and regulatory compliance (Rodrigues et al. 2017). Observing this code of
conduct within the organization would mostly help the organization in complying with the
several standards of business.
4. TML should also undertake the State of the Art Enterprise Resource Planning (ERP)
Procedure. This procedure helps in maintaining of an efficient relationship between suppliers and
customers. This procedure would also help the organization in dealing with various vendors and

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dealers to deal with a seamless and efficient exchange of information between the company and
the various stakeholders (Dong, Liu and Lin 2014). This would help the organization in
increasing the level of transparency within the organization, which would also mitigate the risks
that might approach towards the organization.
5. Each of the segments within the undertaken project should have a detailed business
plan. The investment strategies should always be shared among the stakeholders of the company.
The annual operating and financial plans should also be shared among the top officials of the
organization (Clark, Parkhurst and Ricci 2016). The management level of the organization
should also monitor over the entire list of activities that take place within the organization. This
would help in understanding the risks that might approach towards the organization based on
their financial plans and defining of strategy.
2.1.4 Information and Communication
The use of information and communication technology within TML would mainly help
the organization in making themselves aware of the various risk scenarios. The use of this
technical systems would observe the behavioural patterns of the industry and compare them with
the outside environment (Guerrero-Ibanez, Zeadally and Contreras-Castillo 2015). Upon noticing
the observations from the assessment, the Information and communication technology would be
able to mitigate the negative outcomes that might affect the organization.
Based on the present business scenarios of Tata Motors, it could be discussed that the
organization could make a rapid use of technical systems to improve their business processes and
mitigate the risks approaching the organization (Taksale et al. 2015). Tata Motors should aim to
enhance the connectivity of cars. They should also increase the efficiency of the performance of
cars and thus also provide an enriched kind of mobile experience for their customers. In the

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recent times, there have been several kind of major innovations within the field of Information
and Communication technology (Athani et al. 2015). In order to help the organization in
mitigating the situations of risks, Tata Motors should leverage the use of connected vehicle
technologies that would bring the possible technologies such as advanced machine-learning,
Artificial Intelligence (AI) and Internet of Things (IoT).
A unique user interface should be designed that would be able provide an exclusive
service to the organization (Balaji 2014). The users should be able to make use of the interface,
report any kind of unwanted errors within the application and received services. Tata Motors
should also utilize the different functionalities provided by Microsoft such as advanced
navigation, telematics, remote monitoring and predictive maintenance (Uhlemann 2017). These
kind of improved technologies would be able to monitor the various services offered by Tata
Motors, identify the risks approaching towards the organization and thus also provide better kind
of recommended services to mitigate any situation of risks.
The primary objective of Tata Motors is to provide various positive end-user experiences
to their customers. This would mainly be possible by speeding up the processes of business with
the help of digitization, increasing the efficiency of team work, facilitating employee
collaboration and also improving the speed within the delivery services of ICT (Zhong et al.
2017). Major forms of investments within the facilities offered within the Information and
Communication services would help the organization in gaining better outcomes in the future.
These innovative technologies would majorly help the organization in identifying the risk
scenarios. They would also be able to lower the negative situations that might affect the business
prospects of the organization (Steijn et al. 2016). Thus, with the help of such kind of new

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business aspects and technical innovations, the industry would be able to lower the risk situations
and increase the business revenue.
2.1.5 Oversight and Monitoring
The inclusion of management team to look into the business aspects of Tata Motors
would help the business to overcome the negative implications that might affect the organization.
The reviews of the management and various other assurance activities that includes testing,
performing of business audits and several assessments would mostly help the internal
management team to identify the core issues (Subramanian 2016). These core issues would be
further discussed and then necessary actions would be taken over them.
Tata Motors should launch certain necessary initiatives in order to reduce the complexity
within the business and products. The company should also launch a strategic roadmap based on
their innovative products (Jain and Das 2017). Although there would be a huge level of
competition within the market, Tata Motors should continuously think about their customers and
thus provide various kind of improved business facilities that would mitigate the various risks
and also improve the processes of business (Thierer and Hagemann 2015). The Company should
also monitor the perception of their brand in order to quickly identify and discourse about the
emerging risks and several business opportunities.
The company should also continually invest in various objectives of R&D. They should
also focus their strategies towards the technical areas in which the company needs further
improvements (Lopez, Markwardt and Savard 2016). In the recent times, there are several new
technical systems that are much efficient for providing with the needs of the business. These
technical systems would also help the organization in testing several new products that are
designed and built by them (Taeihagh and Lim 2019). The major shift over the business

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processes towards R&D should include the areas of connectivity, autonomy and electrification in
order to outsmart themselves from the growing competition.
Besides, the primary factors based on R&D, the company should also strive towards the
implementation of various kind of security policies and procedures. They should also be able to
educate their staff in understanding the various scenarios of the business. They should be able to
embed the best form of business related practices with the implementation of internal tools
(Stamatis 2014). These tools would be able to detect and thus mitigate the various kind of
emerging threats towards the security aspects of the organization.
3. Conclusion
Hence, from the above discussion, we can conclude that there is a high need for the
implementation of an enterprise risk management framework within Tata Motors based on
achieving higher business outcomes and also reducing the situations of risks that might incur the
organization. In the above discussed report, the various aspects if risk identification, analysis and
strategies for mitigation of those risks have been defined. This framework should underlay into
the core of the organization so that they would identify the risk scenarios and also mitigate
before they would further spread and infect the organization.
This report discusses about the identification strategies for the risk event and thus assess
the risk scenarios. This step is considered as the most important as this step would identify the
risk and then the management team would begin the procedure of analysis over the risks. Based
on the proper identification of the risks, a risks response plan has been laid out. This plan
discusses about the various situations of risks and also decides upon mitigation procedures for
the events. There is also a need to implement different control activities that would help in