Globalization's Influence on Tata Steel: A Business Report Analysis

This report focuses on the concept of globalization and its impact on Tata Steel Limited, an Indian multinational steel-making company. It begins with an introduction to the company, discussing its history, products, and international presence across 26 countries. The report then defines globalization and explores the reasons behind its adoption by businesses, emphasizing market expansion and technological advancements. It highlights the challenges Tata Steel faces in its international operations, such as cultural differences. The report examines the strategies adopted by Tata Steel, including mergers and acquisitions, to expand its global footprint. It also analyzes the financial statistics of the company. Finally, the report offers recommendations for Tata Steel and concludes with an overview of the key findings. The report underscores the importance of globalization in the modern business world and provides insights into the strategies and challenges faced by a major international company like Tata Steel.

Running head: GLOBALISATION AND ITS IMPACT
Globalization and its Impact
Name of the Student:
Name of the University:
Author’s Note:

1GLOBALISATION AND ITS IMPACT
Executive Summary
This report will focus on the concept of globalization and its related aspects with the help of
the Indian steel manufacturing company “Tata Steel Limited”. The report will begin by
giving an introduction of the organization. The concept of globalization and the reasons why
most of the business organizations follow this particular method will also be discussed. The
report will also discuss about the various challenges which the organization faces on the score
of its international business activities. The report will conclude with some recommendations
for the organization.

2GLOBALISATION AND ITS IMPACT
Table of Contents
Introduction................................................................................................................................3
“Tata Steel Limited”..................................................................................................................4
Globalization..............................................................................................................................5
Reasons for globalization...........................................................................................................7
Strategies adopted by the organization......................................................................................8
Challenges faced by the organization......................................................................................10
Recommendations....................................................................................................................11
Conclusion................................................................................................................................11
References................................................................................................................................13

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Introduction
The various organizations related to the field of business take the help of globalization
for the enhancement of the prospects of their business (Charles Jr, Schmidheiny and Watts
2017). The competitive world of contemporary business has made it important for the
business organizations to take the help of this particular method not only “reach out to a
larger number of customers but also for the process of finding a platform where they can sell
the surplus amount of goods and services manufactured by them” (Charles Jr, Schmidheiny
and Watts 2017). In other words, it can be said that the process of globalization is utilized by
organizations of the present times “to bring about the overall growth as well as the
development of their overall business process” (Rausch, Sheta and Ayesh 2013). It is
“important to note that in the contemporary business world” just following the process of
globalization is not enough the concerned business houses need to take the help of various
kinds of effective as well as innovative strategies in order to sustain themselves in the foreign
nation (Rausch, Sheta and Ayesh 2013). It is often seen that the various business houses
which following the process of globalization had expanded in the other counties of the world
find it very difficult to sustain themselves in the host nation “on the score of the differences
in the social as well as the cultural backgrounds of the two nations” (Dubois, Copus and
Hedström 2012). Many scholars are of the opinion that the role played by the various
strategies adopted by the concerned business house for the process of their business
operations in the host nation is very important as the success or the failure of the concerned
organization depends on the kind of strategies which it is following in the host nation for the
process of their business (Dubois, Copus and Hedström 2012). This report will give an
overview of the concept of globalization and its related aspects. The report will discuss about

4GLOBALISATION AND ITS IMPACT
the concept of globalization with the help of the Indian business organization “Tata Steel
Limited”.
“Tata Steel Limited”
The organization “Tata Steel Limited” founded by Jamsetji Tata in 1907 was formerly
called by the name of “Tata Iron and Steel Company Limited (TISCO)” (Tatasteel.com.
2018). The organization under discussion here is “not only one of the largest business
organizations of the nation of India but also of the world” (Wirtz, Tuzovic and Ehret 2015).
The organization under discussion here is an “Indian multinational steel-making company”
based in the city of Mumbai of the nation of India (Tatasteel.com. 2018). It is “significant to
note that although the organization under discussion here was initially founded by Jamsetji
Tata” in the nation of India however within a very short time the organization following the
process of globalization expanded in the other nations of the world “in order to further
enhance the prospects of the business” (Wirtz, Tuzovic and Ehret 2015). It is a reflection of
this particular fact that the organization under discussion here is currently operational in 26
different nations of the world including some of the top nations of the world like “Australia,
China, India, the Netherlands, Singapore, Thailand and the United Kingdom” (Tatasteel.com.
2018). In addition to these, the organization is one of the largest private recruiters in the
nation of India and it currently has a workforce of more than “80,500 people from different
parts of the world” (Tatasteel.com. 2018). The major products offered by the concerned
organization are steel, wire products, flat steel, plates and other related steel products (Wirtz,
Tuzovic and Ehret 2015). Furthermore, in the recent times in order to expand its business in
the other nations of the world is following the policy of “merger and acquisition” (Wirtz,
Tuzovic and Ehret 2015). It is with the help of this particular policy that the organization
under discussion here has been able to own some of the largest steel manufacturing

5GLOBALISATION AND ITS IMPACT
organizations of the world like Corus (2007), Millennium Steel (2005), NatSteel (2004),
“Rolling mill companies in Vietnam in 2007” and others (Tatasteel.com. 2018). The annual
revenue organization for the year 2017 was “$7.5 Billion and is the 1076th largest business
organization of the world in terms of the revenue which it generates” (Forbes.com. 2018).
The below given figure gives an overview of the company-
Figure 1: “Financial Statistics of the company Tata Steel Limited”
Source: “Factset, Bloomberg, S&P Cap IQ; Forbes”
Globalization
The concept of globalization has been in practice since the traditional times and
therefore the ancient civilizations of the world used to take the help of this particular to
develop effective trade relations with the other civilizations of the world (Rossi, Vrontis and
Thrassou 2012). However, “the concept of globalization in the true sense of the term gained
in prominence within the specific context of the business world in the 19th century” (Rossi,
Vrontis and Thrassou 2012). The 19th century saw the introduction of the telegraphic system
which improved the communication process used by the different people as well as the
business organizations in a significant manner (Ietto-Gillies, Cox and Clegg 2013).
Furthermore, this was also the century which saw the introduction of the steamboats that

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further improved the transport system of the world in a significant manner (Ietto-Gillies, Cox
and Clegg 2013). It is significant to note that the communication as well as transport forms
one of the basic requirements of the business world. Many scholars are of the opinion that the
rise of the steamboats as well as the telegraphic system “played a significant role in the
Industrial Revolution which the world experienced in this particular century” (Dwivedi,
Ghosh and Dangayach 2013). It is interesting to note that many scholars of the opinion that
the Industrial Revolution significantly transformed the landscape of the business world in the
19th century (Dwivedi, Ghosh and Dangayach 2013).
The concept of globalization in the general sense of the term is the process by means
of which the various organizations of the contemporary times develop international relations
or expand their business in the other nations of the world (Rossi, Vrontis and Thrassou 2012).
Many scholars are of the opinion that the “globalization is the trend of increasing interaction
between people or companies on a worldwide scale due to advances in transportation and
communication technology, nominally beginning with the steamship and the telegraph in the
early to mid-1800s” (Ietto-Gillies, Cox and Clegg 2013). Therefore, it is seen that with the
enhanced interactions with the other nations of the world the process of increased amount of
trade, commerce as well as culture also entailed. Many people of the opinion that cultural
factors play a significant role in the business process of a particular business organization
while they are trying to follow the process of globalization or internationalization (Dwivedi,
Ghosh and Dangayach 2013). It is “a reflection of this particular that the various business
organizations need to take this particular factor into special consideration for the process of
their business” in the other nations of the world. The scholar Thomas Larsson in his famous
book “The Race to the Top: The Real Story of Globalization” says that “globalization is the
process of world shrinkage, of distances getting shorter, things moving closer. It pertains to
the increasing ease with which somebody on one side of the world can interact, to mutual

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benefit, with somebody on the other side of the world”. In other words it can be said that the
process of globalization has made the world much smaller where the entities from the
different parts of the world can have effective trade relations with each other irrespective of
the nation to which they belongs (Dwivedi, Ghosh and Dangayach 2013).
Reasons for globalization
The process of globalization entails with itself various kinds of benefits and it is
precisely these benefits which motivate the various business organizations to follow the “path
of globalization” which has become the norm of the contemporary business world in the
recent times (Srivastava et al. 2015). Many scholars are of the opinion that the primary reason
which motivates the various business organizations to opt for this particular process is to have
an enhanced customer base (Charles Jr, Schmidheiny and Watts 2017). It is significant to
note that “in the present times it is seen that due to the technological advancement of the
world and also the various innovations” the facilities which are available to the various
business has increased in a significant manner and therefore it is seen that amount of products
as well as services manufactured by various business organizations has increased
considerably (Srivastava et al. 2015). Thus, it can be said that the process of globalization
provides the various business organizations with a market area where these business
organizations can sell the surplus products as well as services manufactured (Charles Jr,
Schmidheiny and Watts 2017). For example the organization “Tata Steel Limited” had an
annual productivity of more than “27.5 million tonnes (in FY17) of crude steel products” for
the year 2017” thereby making it the 2nd largest steel manufacturing organization of the
nation of India (Tatasteel.com. 2018). It is significant to note that the nation of India is a
developing one and therefore it would be apt to say that the organization will not find
adequate market for the surplus products manufactured by it in the nation of India (Rausch,

8GLOBALISATION AND ITS IMPACT
Sheta and Ayesh 2013). This is one of the primary reasons for the expansion policy which the
organization had been following in the recent times. The second benefit which the process of
globalization provides to the various business organizations of the world is that it allows the
business organizations expanding into the other nations of the world to use the technological
advancements of the nation into which they are expanding (Hoffmann and Kumar 2013). The
nation of India in which the organization “Tata Steel Limited” is located is a developing
nation with a slow rate of technological growth (Hoffmann and Kumar 2013). Therefore, it
can be said that the expansion of this particular organization into the developed countries of
United Kingdom, Netherland, Australia and others will enable the organization to utilize the
technological resources of these nations and this particular “factor is likely to further enhance
the prospects of the organization in a significant manner” (Hoffmann and Kumar 2013).
Another significant reason for which the various organizations undertake “the process of
globalization is the factor of better trade facilities which the various organizations get by
following the path of globalization”(Cavusgil et al. 2014). The various precepts of “New
Trade Theory” are important to note in this particular context. It is significant to note that the
various business organizations are no longer content to have trade relations in one particular
nation of the world and it is a reflection of this particular fact that the concept of globalization
has gained prominence in the recent times (Cavusgil et al. 2014).
Strategies adopted by the organization
Strategies have emerged as “one of the most important aspects of the business
organizations in the present times and the prospects of a particular business organization”
depends on the king of strategies which a particular organization follows for the process of
their business (Dwivedi, Ghosh and Dangayach 2013). However, it is generally seen that
whereas effective strategies can “lead to the overall growth as well as the development of

9GLOBALISATION AND ITS IMPACT
concerned business organization or the company whereas ineffective or mistimed strategies
can hamper the prospects of the concerned organization in a significant manner” (Dwivedi,
Ghosh and Dangayach 2013). The organization “Tata Steel Limited” also “takes the help of
various kinds of effective as well as innovative strategies for the process of their business in
the other nations of the world” (Srivastava et al. 2015). The primary strategy which this
particular organization has followed in the recent times to mitigate the high level of rivalry or
competition faced by them in the international business world is the strategy of “merger and
acquisition” (Srivastava et al. 2015). The organization using this particular policy has
acquired some of the largest steel manufacturing organizations of the world like Corus
(2007), Millennium Steel (2005), NatSteel (2004), “Rolling mill companies in Vietnam in
2007” and others (Srivastava et al. 2015). Another important strategy which the organization
follows “for the process of their business in the other nations of the world is the strategy of
cost leadership”(Paul and Mukherjee 2016). It is significant to note that the organization
“under discussion here takes the help of this particular strategy” to provide high quality
products to the “customers from the different parts of the world” at very affordable prices
(Paul and Mukherjee 2016). The strategy of product differentiation is also being followed
by the organization “Tata Steel Limited” for the purpose of providing high quality products to
the customers which are different from the ones provided by the other business organizations
operational in the same field of business (Kumar 2015). In addition to these, the focus of the
organization is on the process of innovation as well as creativity for the process of their
business (Ietto-Gillies, Cox and Clegg 2013). The organization under discussion here takes
the help of not only the strategies of “Porter’s Value Chain” for the manufacture of their
products but also takes the help of the “Innovative Value Chain” for the purpose of producing
superior quality products which would enable the organization to mitigate the high level of

10GLOBALISATION AND ITS IMPACT
competition faced by them in the international business market (Ietto-Gillies, Cox and Clegg
2013).
Challenges faced by the organization
The organization under discussion here just the other major organizations of the world
which follow the process of internationalization or globalization faces a “number of problems
by lieu of their business activities in the different nations of the world”(Ietto-Gillies, Cox and
Clegg 2013). The primary challenge which the organization “Tata Steel Limited” “faces by
lieu of their business operations in the other nations of the world” is the factor of cultural
differences (Rossi, Vrontis and Thrassou 2012). The culture of the nation of India is very
different from the ones in which the organization “Tata Steel Limited” operates in the
international arena like United Kingdom, Australia, Netherlands and others (Rossi, Vrontis
and Thrassou 2012). Many scholars of the opinion that the factor of culture determines to a
large extend the way business is being conducted in the different nations of the world
(Dwivedi, Ghosh and Dangayach 2013). Thus, the business world of the nation of United
Kingdom is drastically different from the business style of the nation of India. Another
important factor which affects the international operations of the business organization under
discussion here is the problem of staffing (Dwivedi, Ghosh and Dangayach 2013). It is
significant to note that the “factor of international staffing has emerged as one of the most
important challenges which the various organizations” face in their international business
operations (Dwivedi, Ghosh and Dangayach 2013). It is a reflection of this particular fact that
the various organizations in the present times opt for the various kinds of staffing methods
like polycentric, ethnocentric and geocentric methods of staffing (Rausch, Sheta and Ayesh
2013). The organization “Tata Steel Limited” follows the method of polycentric staffing for
the purpose of staffing in their international business centers (Rausch, Sheta and Ayesh

11GLOBALISATION AND ITS IMPACT
2013). Another significant challenge which the various business organizations face on the
score of their international business operations is the factor of management of these centers
(Rausch, Sheta and Ayesh 2013). It is often seen that the “various business organizations” fail
to effectively manage the diverse business centers which they have in the foreign nations.
Recommendations
The organization “Tata Steel Limited” can take the help of various kinds of strategies
for the mitigation of the challenges which it is facing in its international business centers. The
organization first of all to mitigate the effect of the cultural factor can “take into effective
consideration the cultural requirements of the nation” as well as the style of co ducting
business in that particular nation in the most effective manner in order to enhance the
prospects of their business in that particular nation. Secondly, for the purpose of the staffing
in their offshore locations the organization can take the help of the geocentric method of
international staffing which believes in providing the important managerial positions of the
organization to the individuals who are the most worthy of it. For the effective management
of these offshore centers the organization can take the help of various kinds of regional
managers and set up regulatory management committees for the periodical assessment of the
performance of the different entities related to the organization.
Conclusion
The “advent of globalization has much transformed the way the various business
organizations conduct their business in the contemporary business world. It is a reflection of
this particular that most of the business organizations of the present” follow this particular
process “to bring about the overall growth as well as the development of their business
organizations or companies”. The process of globalization entails with it various kinds of
benefits of benefits like enhanced customer base, the opportunity to earn more amount of

12GLOBALISATION AND ITS IMPACT
profit, the opportunity to utilize the technological developments of the nations in which a
particular business organization is operational and various others. However, there are certain
negative aspects associated with the process of globalization as well, namely, the cultural
factor which the different business organizations need to take into consideration, the staffing
problem, effective management problems and others. It would be apt to say that the process
of globalization has both negative as well as positive aspects however the benefits of this
particular process far outweigh the negative aspects of the same. Therefore, it is seen that the
various business organizations of the world like “Tata Steel Limited” are increasingly taking
the help of this particular concept to improve the prospects of their business.

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