The Last Rajah Ratan Tata Case Analysis

rattan cane Tata a living legacy responsible for the eminence of the largest conglomerate, Tata crowd in India. The Tata company is usurping global existence rapidly, with ownership of organizations in almost every major international market place. It vested a combined market capitalization of to a greater extent than $32 billion in a diversified range of operations, including consumer products, energy, engineering, tuition systems, communications, consultancy services and materials (Dobbs and Gupta 2009).SOURCE PROBLEMThe liberalization for Indias economy in the 1990s (Pawan 2001), match with the bold yet accurate foresight of rattan palm Tata had a purpose to play. Despite Tata sorts exceeding achievements in gaining meaningful front end geographically, uncertainty lurks ahead. McClearn (2005, 49-53) wrote that the information technology powerhouse requires at least a trillion dollars on infrastructure investments to oercome poverty. The netherdevelopment fundamentals o f the countrys facilities may deter the furtherance of Tata root topically. ratan Tata admitted to an different at hand(predicate) problem the lack of a suitable transposition for his position. Tata Group get out be deprived of an able leader to help the organization in soaring greater heights (Luthans and Doh 2009).SECONDARY PROBLEMS1. Short Term a. fuss in Talent Development and its retention The case study revealed a few looming issues that may result in the downfall of this mega- grouping. The unsatisfactory works environment, together with the high income disparity has compelled locals to leave for greener knightlyuresoverseas (Murray 2008). There is unalterable pressure as Doh et.al. (2011, 85-100) had stressed, the incumbent to have a commit team of leaders that addresses talent development and its retention in Tatas business strategy.b. Struggles with owning Corus The science of Corus has burdened Tata Steel with $7.4 billion of debts. To worsen the matter, the ta ke Union representing Corus workers wanted the brand-new forethought to pump in a further $600 million for assurance of their livelihoods. To exe buffete social responsibility over the workers or for the betterment of the solid business, Tata Steel surely has a tortuous decision to describe (Luthans and Doh 2009).c. Procurement of Jaguar and Land Rovers misemploy move Tata Motors may rack up to a greater extent passes than net income with the buying of Jaguar and Land Rovers from Ford in 2008. The instant stardom that Tata Motors enjoyed out-of-pocket to a rise in prestige was nothing comp bed to the mammoth loss that both automobile brands had incurred $510 million in 10 months since their acquirement. The real gainsay is its sustainability in the next dickens familys, man waiting for an upward rebuke in the premium segment (Srivastava 2009).2. Long Term a. Slimming down of the Groups business The diversification of Tata Groups businesses has grown besides wide, losing focus on the core industries that ar actual profit churned-up. Ratan Tata has failed to streamline its lively 100 business involvement to just 12 during his stint (Luthans and Doh 2009). As the baton of leadership passes on, the new successor lead shoulder this heavy avocation on top of his portfolio.5. ANALYSISThe derisory labour market and intensification of the mergers and acquisitions have brought many talented employees to the drivers seat. Bidarka and Ajay (2008, 72,74) explained on the reality of a talent crunch in India, which will directly impact the total workforce of Tata Group since90% of its employees are locals (Tata Sons Ltd 2012). To aggravate the situation further, Gupta (2011) reported on the extreme poor working(a) conditions in Jamshedpur that may subject the 20,000 workers and 700,000 residents into considerable health hazard. Employees will debar negativity at all constitutes and look for better opportunities elsewhere.Since acquisition of Corus took start in 2006, Tata Steel was pressured under the aftermath of the recession concurrently. The brand name production in UK has hit rock-bottom for years because of the volatile demands from user industries much(prenominal) as automobiles, consumers durables and capital goods (Gopalakrishnan 2011). The high operational cost in UK marginalized the profit yielding which made recovery to a greater extent precarious. Guarantees of jobs for workers in UK are impossible, with themselves in hot soup.Tata Motors has a long-standing reputation for truck-making, but are new to continental car-makes. Many dealers ponder if the Indian manufacturer could wield the quality and reliability associated with the brands, and more essentially, revive the already tarnished repute collect to complaints of land rovers in Britain (Luthans and Doh 2009). Nonetheless, even if Tata Motors was prepared to propel its whole business strategy to an extravagant sphere, justice cannot be done to the two b rands. SUVs have lost its novelty among consumers, resulting in a drastic reduce in demand. Bad economy has stagnated the desire in owning premier-line cars, putting Tata Motors at tough spot (Srivastava 2009).Ratan Tata believes in not putting all bombard into a basket when it comes to investment of businesses, but loses his head when the intention of rapid international growth overtakes his rationality. His over-diversification has resulted in causalities such as absorbing substantial amount of debts and employment resentment due to downsizing (Luthans and Doh 2009). such unfavourable circumstances can be mitigated with better focusing and putting himself ahead of the curve.Getting ahead of the curve means envisioning what the approaching may hold, and that requires a degree of courage. Mr. Cyprus Mistry, the deemed darkhorse took everyone by uphold when Ratan Tata appointed him to takeover his reins in December 2012 (Udas 2011). Though Ratan Tata sang full praises of Mr. M istry, analysts remained conservative. Corporate watchers are skeptical close this new successors leadership capabilities as little was known about him (BBC News 2011). Afterall, he was appointed to lead the group out of the economical s funkydown and debts.If Tata Group is the only organization in India in debts, it is obviously an understatement. Goyal (2011) revealed that Indias public debt has made up 70% of her gross municipal product. Apparently, borrowing was made for the development of infrastructure to bring Indians out of their fiscal scarcity. What had hindered the progress was the mindset deeply embedded in most Indians, inquire why sooner of why not. The nations brainiac had created intolerance for laziness, for shoddy products and for open corruption (Rajan 2005). Tata Group will requisite to bite the nail in order to flourish its business in its home ground.6. CRITERIA OF EVALUATION GOALS AND TIME FRAME Upon establishment of problems that Tata Group encounter, a framework of the goals and timeline is proposed to help the management forecast the future of the mega-group7. ALTERNATIVES To illustrate the supra criteria of evaluation, the strategy statements (S1 to S4) are crafted to assist the management in formulating sound throws to remedy the identified problemsS1 Tata Group should follow a sound business device which addresses talent development, retention and occupational health safety of employees.S2 Tata Groups strategy for the next triplet years is to ontogeny the local armorial bearing and tax revenue in India by 20% at the end of the ternion year, by breaking the vicious cycle of the detrimental attitudes displayed by Indians.S3 Tata Groups strategy for the next three years is to concentrate on the three highest earning holdings Tata Motors, Tata Steel and Tata Consultancy Services, helping them to recover from their debts as soon as possible and escalate the overall groups international revenue by 40% at the end of the t hird year.S4 Mr Cyprus Mistry should reduce the bend of under-performing industries that Tata Group is investing by 10 every year. During the whole play of downsizing, he should refrain from diversifying into other businesses that will subject the organization to more debts.8. RECOMMENDATIONS AND JUSTIFICATIONSa. Managing and retaining talents These intangible skills of the workers are hard to retain and are important in maintaining the financial health of any organization (Katz 2000). Therefore Tata Group ask to address the needs of talent at all levels of the organization. It can abide the frontline ply and technical specialists with a rise in wage rate. The increase as proposed in the early section may not be significant to Tata Group in terms of amount, but can leave a lot more to the lower-income families in India (Guthridge et. al. 2008).While the middle executives to top management are driven by monetary returns, other factor such as training and development and welfar e package may affect their staying power. By sending staff to upgrade their skills relevant to their jobs and re-deploying the senior staff to train the inexperienced are ways to show that the organization value their employees. By insuring all employees with necessary health care benefits and providing a safe, contributory working environment shows that the organization cares their employees. The two methods adopted side-by-side by Tata Group will keep employee satisfaction high because it enables employees to lucubrate their capabilities and grow indoors an organization. Retaining of employees is expected (DAmico 2008).b. Putting the harm moves right If the group desires to attain S3 and S4, the wrong moves earlier must be reversed to turn the tables around. The gradual decrement of the businesses focus is related to the concentration in the three key holdings to thegroups empire. With less distraction in other areas, Mr. Mistry can unify the getable cash-flow, coupled with soft loans from the European Banks to help make way for the manufacture of Nanos, an economical car costing less than $3,000 that spawn a craze in India and the Western continents in 2010. The new launch is project to capture the India and overseas market gradually, providing an anchor for steady earnings while re-paying the existing debts incurred by Jaguar and Land Rovers (Srivastava 2009).c. Government interference Tata Groups livelihood in India is grim, unless a total reformation takes place in India. The whole situation is not hopeless with more and more younger individuals being educated in comparison with the older generations. They, freed from past baggage, tend to be more tolerant of competition and open. Complementing with the moral morality and skills learned in schools, there is a hope for Tata Group to expand locally without human capital as the obstacle (Rajan 2005).9. IMPLEMENTATION, CONTROL AND FOLLOW-UPBelow is a step-by-step illustration on the proposed strateg ies, with the limitations, follow-up actions and contingency curriculums highlighted a. Managing and retaining talentsSteps 1. gain wage rates at a $0.25/hr every year for a period of 3 years. 2. Send middle to top management for work-related enrichment courses that empower them with more knowledge to handle difficult problems. 3. Group amends schemes to be introduced across the board, with better health benefits for workers who are consistently subject to bad working conditions. 4. Deployment of senior staff to train inexperienced employees to cut down on unnecessary downsizing.Limitations Interference of Trade Unions. Better alternatives available for the same positions at overseas. Follow-Up To see if the objectives set in the earlier framework has beenmet under Contributions to Employees after implementing the strategy for a three-year period. Contingency plan Outsourcing of jobs to other nationalities like Cambodia or Laos where labour cost is comparatively low (Kei 2011). b. Putting the wrong moves right Steps 1. Dump under-performing industries gradually, prefably 10 per year. 2. Micro-manage instead of macro-managing by concentrating the fund usage to expand or sustain the three key holdings. 3. Due to the uncrowded market of economical cars in India and overseas, make and deliver as many Nanos as possible to increase market share geographically. 4. Refrain from new investments in untapped business.Limitation Emergence of other competitors with similar car-make. Wrong judgment by Mr. Mistry to wind-up possible profit churning business. Follow-Up To see if the objectives set in the earlier framework has been met under Total Revenue Locally, Total Revenue Overseas, Streamlining the business and Debts Incurred. Contingency plan To engage market research analysts to assess on the profitability of its existing business before any decision of closure is made.c. Government Intervention It is unlikely to draw the implementation steps for this strategy as it is beyond the control of Tata Group.10. CONCLUSION Tata Groups survival over a century is not by sheer luck. Ratan Tata has made an imperative difference by elevating the whole group to higher grounds locally and worldwide. Whether Mr. Mistry can carry on the legacy left behind by Tata himself, it is still premature to tell at this stage.