Tata Motor CompanyEssay Preview: Tata Motor CompanyReport this essayTata Group of IndustriesThe story of Tata begins in 1868 when a young boy named Jamsetji Tata joined his fathers small trading company. Thirty-five years later, that same boy was the owner of Indias largest textile company, Tata Textile. Over the last century, Tata has excelled in many different business sectors including Materials (Steel and Mining), Agriculture, Energy, Consumer Products, Information Technology, Consultancy, Finance, Automobiles, Chemicals, Engineering and Hospitality. Tata Group of Industries reported $17.6 billion in revenues in 2005, which is equivalent to 2.8 percent of Indias GDP. In 2006, it is projecting its annual revenue to be around $24 billion. Figure 1 shows the breakdown of Tatas revenues for the fiscal year 2004-05 between the separate business sectors and how much it contributed to Tata as a whole. Tata is one of the worlds largest employers, and is the largest private employer in India with about 222,000 employees. India is known to many as a very diverse country; there are 26 states in India and the culture of each is extremely different from the others in language and lifestyle. This diverse culture within India makes Tatas human resources department work to lead major changes across the vastly different cultures of the employees that exist within Tata as a whole group. Tatas management training center located in Pune serves as a corporate school to help Tatas managers learn how to lead such a diverse workforce.
National Culture of IndiaThere are several issues that need to be addressed before entering a new country expecting to maximize profits. One such issue is the culture of the country where the firm wants to enter, as there are many differences in the culture of business practices and the way things are generally done. Doing business internationally is affected by the way a society functions on the macro level with factors including the size of economy, wealth of the citizens, religion, race, etc. There has to be a detailed analysis that addresses the differences between the two different cultures of the host country and parent company. For example, a US company operating in the Middle East will have to allow regular breaks for praying during work hours as according its employees religion. Tata is the largest Indian employer and has to accommodate a variety of employees who come from different backgrounds. These accommodations are only provided because Tata has a deep understanding of the culture and customs of its employees giving it a competitive edge over others.
In India, the culture is based on a mixed ideology of collectivism and individualism. The career of an employee is their life and how they earn a living usually dictates what kind of personality and lifestyle they will have in their social class system. This view is applied in many other cultures in the saying, “money, power, and respect.” These three levels of success come from how well one is living and what type of career the employee has. A multinational enterprise conducting business internationally must understand how the social class system works in the host country and what dos and donts exist there.
In India, the level of education and productivity are the two most important factors that determine the success of a person in their career. “When one considers that India is a hierarchical society, the encouragement of workers as teachers provides an opportunity for increased status.” Indian culture requires that employees go above and beyond what is asked of them because they can be replaced at anytime by a large surplus of available workers.
Tatas Corporate CultureFor Tata as a whole conglomerate, it has a unique corporate culture unlike any other business in India. Tata has a very strict and bribe free culture and have always valued its employees in the highest regard. Tata has a very different state of labor relations as Tata steel, one of the oldest industries of Tata, has gone seventy-five years without a strike. This fact is extremely impressive in a country like India, where workers go on strike quite frequently. Also, in order to cut down heavy losses, Tata steel had to lay off more than half of its work force over the last 15 years. This strategic decision made Tata competitive in one of the most brutal industries. However, it didnt damage the laid off workforce as Tata promised to pay them full salary until retirement and there after, pension benefits. “When an organization functions as a global citizen through its corporate social responsibility initiatives, this often boosts its reputation externally.” (Pio, 2005) Tata has been built on a strong reputation not only within the home country, but in different locations around the globe.
For over 130 years, Tatas mission has always been to develop India as a great industrial power. Tata truly believes the development of a nation lies in the hands of the business owners. Tata has done a great deal in developing the infrastructure of India, especially in Jamshedpur, the city where Tata originated. Jamsetji Tata turned Jamshedpur from a jungle to the one of the largest industrial sectors of India. There he opened factories, schools, churches, parks and hospitals for Tata employees that showed his commitment to all the stakeholders that would be a part of Tata. Tata was the first one to introduce an eight hour work day concept in India and offered medical benefits to employees, which even today is unknown to many employers in India. After the death of Jamsetji Tata in 1991, his son Ratan Tata took over as the new leader. Tata steel industries were facing heavy losses at the time and Ratan Tata was advised by many experts to exit the dying steel business. However, Jamshedpur followed his fathers beliefs of building Indian industry and continued the steel business.
Indian Business EnvironmentDeregulation is the process in which governments remove selected regulations off of businesses in order to encourage the efficient operation of markets. The theory of this subject believes that fewer regulations will lead to a raised level of competitiveness, therefore higher productivity, more efficiency and lower prices for the overall economy. Conducting business internationally can have major impacts depending on what type of process the country follows, whether or not there are many government-imposed regulations. The United States has been a strong success story for economic deregulation, which has had a great effect on the economy. Another country that has seen the enormous benefits from economic deregulation on its economy is India. This country has had extensive
work to implement reforms, with particular attention to developing the social, technological, and economic fabric of an internationally competitive Asian economy. This is one of the more important areas in which many people want to work in India and I have noticed a decrease in the number of Indian workers who are in the workforce compared to the international average. Some have been involved in the legal and trade matters, while others have come to work outside India to improve their lives, or at least to improve their skills, for example by applying the principles of human resource management to their business activities to make money from them. While the overall level of competition among countries in the world is low, India does have a strong advantage in creating better jobs. The following statistics show that the percentage of jobs that is created for a successful person is very low, so that is a result of factors that include different local circumstances, such as high levels of schooling. This statistic was reported by the U-3 World Trade Organization and used below, because of its lack of data available at a certain time. United Kingdom
Australia
Czech Republic
Finland
France
Germany
Indonesia
Indonesia Federation of South West Africa
Japan
Italy
Netherlands
Pakistan
Taiwan
Venezuela
Wales
The United States and China share a very close economic relationship, and in 2011 the American government brought in the American Economic Council as chairman to work with Beijing to resolve the country’s dispute over the South China Sea . The Chinese government is a major investor in the South China Sea . The United States has a very strong relationship with China, although it has tried not to work with the Chinese government at the United Nations . In this sense, the United States appears to be taking its policy position in an almost positive way. India has been considered as a key economic power by the United States for decades and is a long-running trading partner of both countries. Since the Great Recession, the U.S. invested $15 billion to boost global growth by 20% while the Chinese invested $36 billion . Since China opened diplomatic relations with the United States as part of the China-USA Joint Economic and Security Forum , the United States has received a greater amount of foreign direct investment than the next two largest economies . While the United States has its own significant trade embargo on China , this has been one of its key problems in the history of the East Asian Union .
, the United States has received a greater amount of foreign direct investment than the next two largest economies . Since the Great Recession, the U.S. invested and invested more than $20 billion over the next two years to spur trade with China . In 2012, India’s Ministry of Environment and Food Industries (EMFIO) awarded a memorandum of understanding (MoU) to the government to build green buildings to improve the quality and sustainability of crops in India which are planted in India in an efficient and sustainable manner. The MoU was not the first such project launched from India and has gone out of the public domain since then . India also has a very strong infrastructure programme to improve rural sanitation , which has a number of benefits. The government of India has had a very strong economic programme, but its economic activity has only been to increase