Global Strategy Report: Tata Steel's Response to Business Environment

This report provides a comprehensive analysis of Tata Steel's global strategy management, focusing on its response to the dynamic international business environment. It explores Tata Steel's adoption of both portfolio and integrated organizational perspectives, highlighting the merits and demerits of each approach. The report delves into the company's business model innovation, including strategic alliances, mergers and acquisitions, and technological advancements. Furthermore, it examines Tata Steel's corporate governance, corporate social responsibility (CSR) initiatives, sustainability practices, and leadership framework. The analysis includes a critical evaluation of the company's vision, values, and strategic responses to challenges in the global steel manufacturing industry, offering insights into its competitive advantages and future prospects.

Running head: Global Strategy Management 1
GLOBAL STRATEGY MANAGEMENT
Student Name
Institution

Global Strategy Management 2
Executive summary
Global strategy management offers insight into the international business environment
that is characterized by dynamics business conditions. This is similar with the global steel
manufacturing enterprise that requires high strategy management since the commodity is one of
the vital commodities that drive most economies in the world. Tata Steel remains one of the key
player in global steel manufacturing environment. As a company, Tata steel company can adopt
the portfolio organization and integrated organization perspective. In order to face the dynamic
international environment, Tata Steel came up with one of the business models whose major
focus is innovation. Tata Steel developed a structured corporate governance guideline that
follows laws and ethical standards. The company also has corporate social responsibility
guidelines that ensure that the company is managed in line with its corporate social responsibility
vision. Sustainability aspect refers to managing social, financial and environmental risk to fit
both human and environment. The leadership framework of steel manufacturers is coined with
enabling innovative ideas and communication linkage between different players or partners. This
assessment has changed my understanding of the Global Steel Manufacturing Industry and
strategic players such as Tata with their strategies to respond to dynamic business environment.

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Table of Contents
Introduction....................................................................................................................................................3
Question One: Portfolio, Integrated Organisation Perspectives, and Competitiveness.................................4
Integration of both portfolio and integrated organization model...............................................................6
Question Two: Business Model Innovation and Technological Innovation through Strategic alliances,
M&As............................................................................................................................................................7
Question Three: Corporate governance, CSR, Sustainability and Leadership..............................................9
Corporate Governance.............................................................................................................................10
Corporate Social Responsibility (CSR)...................................................................................................10
Sustainability............................................................................................................................................11
Leadership................................................................................................................................................12
Question Four: Personal reflections on learning..........................................................................................12
Conclusion...................................................................................................................................................14
References....................................................................................................................................................15

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Introduction
International business can sometimes become dynamics given the changes in portfolio
performance in the market. The International business environment may include multinational
enterprise. Steel is a vital component that drives most of the economies throughout the world.
Therefore, most global steel manufacturers play an important role in development of most
countries and any challenges in the international business environment has a critical effect on the
most economies. The dynamic global business environment is quite challenging that require key
players to in the industry. To remain competitive or to have a competitive advantage over other
competitors in the steel manufacturers, companies have developed various strategies and
business models. One of the key players of steel manufacturers industry is Tata Steel industry
that has more than 30 tons of steel products annually. The following paper critically asses and
evaluate the strategies that are used by global steel manufacturers to response to dynamic and
changing international business environment.
Question One: Portfolio, Integrated Organisation Perspectives, and Competitiveness
In the report released by the Tata steel, the company is able to respond to the challenging
environment. The Tata steel company can adopt both portfolio organization and integrated
organization perspective. Integrated organization perspective or model ensure different areas and
departments are properly coordinated in accordance to corporate governance. Portfolios, on the
other hand, involve diversification of company portfolios in order to evenly distribute resource
(Goergen 2012, pp. 104–105).

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Portfolio management enables the organization to organize and manage its products or
group of products in a comprehensive manner. Adopting portfolio organization perspective is a
couple with some merits and demerits as revealed in Tata steel. Portfolio organization model is
accompanied by some merits and these include minimized risk, maximized resources, prove the
value of stakeholders, improved decision making and enable recurring success. Firstly, portfolio
model reduces the risk that comes as a result of changes in the international business
environment. Some of the risks that are minimized by portfolio organization model include
financial risk, resource utilization and misdirected efforts toward one direction (Wieland &
Handfield 2013, pp 22–29). Secondly, portfolio organization allows the company to redistribute
its resources in a planed manner thereby reducing resource use. Portfolio organization model also
helps attract the interest of stakeholders and other groups that may be interested in investing in
the company. Thirdly, adopting portfolio also is important developing infrastructure that leads to
recurring success. Fourthly, decision making solely depends on data on the organization, the data
need to be visible from a top-down perspective or tactical bottom-up perspective. Portfolio
organization model, therefore, enable the visibility of the data that enable decision making
(Dalling 2007).
Demerits of portfolio organization perspective may also include the following increase
exposure and missed windfall. Firstly, as challenges increase in the steel industry the company
risk suffers from since the portfolio increases exposure to risks. When the market is declining the
portfolio holding also declines to lead to the risk of collapse. Secondly, diversified portfolio
normally suffers due to loss from different sectors. A single portfolio may make a huge profit
that is contrary to the profit that may be made by the whole organization (Penfield 2008).

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Integrated model describes the linkage between different aspects of the organization in a
coherent manner for high efficiency. Integrated business model that is used in the company
integrates Operational Excellence, Corporate Citizenship, Social Responsibility and
Environmental Performance. Integrated organization perspective is coupled with some merits
that include control over business, allow positive differentiation, more cost control, and more
competitive advantage. Firstly, business integrated model allows the company to have control
over various aspects o the value chain. Secondly, business integrated model enable the company
to differentiate its product both at the production and at the distribution which increases its
competitiveness since it adopts to the changing business environment. Moreover, the business
can design its products according to consumer’s preference. Steel manufacturer is able to control
the cost since it can adopt its main outlet through direct control of a business. This is possible
through vertical integration for instance. Finally, an integrated business model also increases
company competitiveness since the company can gain control of either distribution or main
outlet hence the company has a competitive advantage over its main competitors (Wieland &
Handfield 2014, pp 22–29).
Demerits of an integrated business model, on the other hand, include decreased
flexibility, require high cost, may cause confusion and normally cause barriers in the market.
Firstly, the integrated business model used by the company reduces flexibility due to many
challenges that may occur in upstream and downstream investment. Secondly, to maintain the
vertical integrated for instance require a high amount of money. Thirdly, as business use
integrated model reduced flexibility due to communication challenges within the company
thereby causing much confusion. Finally, as the company venture in different aspects of business

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such as distribution, it creates barriers to entry of the market by new firms that would invest in
distribution for example (Stehr & Jakob 2014, pp 135–150).
Integration of both portfolio and integrated organization model
Based on the merits and demerits of both business perspective it is possible to adopt both
portfolio and integrated perspective. Firstly, portfolio organization perspective has an advantage
such as reduced risk due to diversification as compared to integrated organization perspective
that allows control over the company. Secondly, adoption of both perspective allows the
company to efficiently control its operation since the company is able to minimize any confusion
arising from the use of one perspective. A perspective such as a portfolio reduces flexibility and
this can be compensated by adopting an integrated perspective that allows flexibility from all
perspective either top-bottom or bottom up perspective (Shahwan & Mohammad 2016).
Question Two: Business Model Innovation and Technological Innovation through Strategic
alliances, M&As
In response to challenges in the international business environment, Tata Steel came up
with one of the business models that focus on the innovative that focuses on strategic alliance
and mergers. The company has join partnership with other companies that are closely associated
with steel manufacturing especially in facilitating technological upgrade of its industrial
activities. In order to make the business sustainable the organization highlighted information
system as one of the strategies prompting the company to partner with information service
providing companies. The company has come up with some innovative strategies that
incorporate various partners in the value chain. Tata company has been investing in innovation
business model that incorporate both technological and business innovation models. Through

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company’s innovation portal the company has highly implemented various technologies as this is
to reduce risk associated with changing and a dynamic global business environment. It is
estimated that the company has implemented over 3300 innovative business ideas through its
various subsidiaries (Thomas et al 2017, pp 30–47). In addition, the company currently has most
of its manufacturing activities automated with computerized system.
In my opinion, Tata company has resource and capability to apply digital and mobile
technologies to realize its goals. Firstly, the company has made some development in digital and
mobile technologies since it has innovation portal. Though mobile technologies the company has
not fully develop yet there is resources and capability to develop it. The remaining aspect of
digital innovation that the company needs to develop is the mobile application that uses different
mobile platforms. This is important since currently the digital marketing and communication
form a critical aspect of company activities (McWilliams & Siegel 2001, pp 117–127). To reach
as many customers as possible and also to reach out to the community through its sustainability
program the company need to develop its mobile communication platform. In addition, digital
and mobile technologies are also important also facilitate strategic alliances that play important
role in partnership with suppliers and distributers within the global steel industry. Tata has been
forming alliances and M&As as a strategic approach to dynamic global business environment
and currently the digital innovation play an important role in connecting various firms to the
main company thereby improving communication efficiency (Mahmudur & Sanjaya 2016).
The addition of ‘Prevesh’ to product portfolio attracts different views as this may have
merits and demerits of the company. According to blue ocean strategy, the business has invested
in technological heights where other competitors have not ventured. The company decided to

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come up with innovative ideas such as ‘Prevesh’ with no other competitors. As the business
implement the ideas it reaches to Blue Ocean without other competitors and this allows other
innovative ideas to come up and are implanted (Lantos 2001, pp 595–632). To compete in
current dynamic global business environment blue ocean strategy is regarded as an innovative
strategy. The business model, on the other hand, interconnects to the blue ocean strategy since
both can allow entering the untamed market. One of the listed strategies that are used by Tata to
respond to challenges in the global steel manufacturers industry. Another strategy is also
innovation in product differentiation that allows the company to develop new products and
services as the solution to challenges (Khalid 2011, pp 484–492).
Question Three: Corporate governance, CSR, Sustainability and Leadership
‘The company's vision to be a global benchmark in value creation and corporate
citizenship and the company's long-term corporate social responsibility (CSR) objective, is to
improve the quality of life of the communities through long-term value creation for all
stakeholders. This objective is in alignment with the Tata Group core purpose. Towards
achieving this, the company has been a pioneer in various CSR initiatives. We continue to
remain focused on improving the quality of life and engaging communities through health,
education, sports, and infrastructure development. (http://www.tatasteel.com/investors/annual-
report-2014-15/annual-report-2014-15.pdf, 2016)’
The above extract reveals Tata company’s value that explains aspects of corporate
governance, Corporate social responsibility (CSR), Sustainability and other leadership aspects of
steel manufacturers. To critique the above extract there is need to analyze and evaluate several of
these aspects. It is important to note that corporate social responsibility is closely connected to

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the leadership and all works to ensure the business achieve sustainable practice. For instance, the
sustainability aspect ensure that the company is socially responsible to the society and the
environment.
Corporate Governance
Tata Steel has well structured corporate governance guidelines in line with both laws and
ethical standards. The leadership and governance of the company are based on the board that has
proved experience in leadership. The board is appointed by shareholders who are the owners of
the company. The company management can be compared to the agency theory that provides
different between shareholders and management that are hired (Rasche, Morsing & Moon 2017,
pp. 6f). This is based on transparency and ethics that drives company activities. Moreover, the
corporate governance guidelines also resemble another theory of stakeholder’s corporate
governance. In this theory, stallholders control the company and shareholders are not the main
stakeholders for the company. Similarly, in Tata steel, there are many stakeholders that play role
in corporate governance that is more important as shareholders (Denis & McConnell 2003, pp 1–
36).
Corporate Social Responsibility (CSR)
The company has well structured corporate social responsibility guidelines that ensure
that the company is managed towards the fulfillment of its corporate social responsibility vision.
The company also came up with social responsibility community that is the task to monitor the
corporate social responsibility for the company. According to Jones (2007), a corporate social
responsibility normally functions in compliance with laws, ethical and norms. Based on the

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annual repot the company management work in harmony to fulfill the corporate governance
responsibility placed upon it by shareholders (Lantos 2001, pp 595–632). The senior
management has the capability to realize the corporate responsibility of the company. Under
normal circumstance, shareholders are the owners of the company though the company is
managed under the board of directors (Stehr & Jakob 2014, pp 135–150). This leaves no choice
for the board to be corporate responsible to shareholders. Though some other theories suggest
that shareholders should not be the main or important stakeholders in the corporate social
responsibility, within steel industry shareholders remains important stakeholders in the
organization since they are the owners of the company (Bhattacharya, Sen & Korschun 2011).
Sustainability
Sustainability can be defined as managing social, financial and environmental risk to fit
both human and environment. Sustainability goal of the company revolves around involving
community towards sustainable developments. As part of sustainability, the company is
involving different people within the Tata steel family. Though According to the annual report
on Tata steel cooperate social responsibility, the Company endeavor to positively impact the
lives of the communities around its areas of operation, minimize the impact on the environment
and responds various issues of communities in a mutually beneficial way (Penfield 2008, Vol.
18, no. 6). The company governance is largely involved in community participation. The
company support communities in various ways that include agriculture, education, mid-day
meal, renewable energy and newborn baby. Firstly, the company has literacy program that
targets adult. The program has benefited over 15,000 people thereby increasing literacy level.
Secondly, the company gives medical care to newborn and the mother so as to provide health

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care to the community. In addition, the company supports farmers through an agricultural
initiative. The company also gives meals to students in government schools in a program known
as mid-day meal scheme. Finally, the company has developed solar streetlight project that
utilizes the solar renewable energy. These projects or programs serve to impact the community
so as to fulfill the sustainability goal of the company (Anderson 2006, Vol. 53, no. 4.).
Leadership
Another aspect of the company is leadership that plays an important role in driving
sustainability policies (Mehrabani & Dadgar 2013, pp: 09- 13). The leadership structure of steel
manufacturers is structured to allow innovative ideas and communication facilitation between
different players or partners. The leadership of Tata steel, for instance, is top-bottom perspective
and is headed by the board of directors appointed by shareholders. The leadership of the steel
manufacturers has various responses to the changing and this is evident in the leadership
partnerships and reports that are part of the annual report 2014-2015. In addition, the
management also plays an important role in the decision making that derives the company to
maintain its production and distribution of products. As part of management Tata steel has
several committees that are the task to manage or oversea various activities or corporate
governance (Jobber & Fiona 2012, p. 143).
Question Four: Personal reflections on learning
This assessment has an impact on my understanding of the Global Steel Manufacturing
Industry competition as many key players such as Tata has strategies to respond to dynamic
changing a dynamic business environment. Firstly, companies concentrate on innovative ideas
and implement them to enter new markets. Companies also use its diversified products portfolio