Management International Management Ratan Tata Term Paper

Pages: 7 (2398 words)  ·  Bibliography Sources: 5  ·  File: .docx  ·  Level: Master's  ·  Topic: Business


International Management

Ratan Tata is widely recognized as the person responsible for transforming the Tata Group, a large India-based conglomerate, from an unwieldy collection of businesses into a relatively more nimble group of companies better prepared to take advantage of opportunities. This case discusses Ratan Tata's early days at the Tata Group and his attempts to change the processes, people and work culture at the Group companies. Tata took many steps in order to inject professionalism into the Group while implementing two directions of growth - innovation and globalization.

Ratan Tata took over the Tata Group in 1991. For years the company had operated in a protected environment which did not leave them in a good position to compete in the global market. When the India government began to initiate a series of reforms in order to open up the economy, the Tata Group found themselves lacking in many areas. Ratan Tata was responsible for prepare the company to face the pressures of globalization. He undertook many initiatives including: rightsizing, exiting some businesses, injecting fresh talent and changing the culture.

The key a successful company is successful leadership. If a company has poor leadership they are sure to make bad decisions and not find themselves in a position to grow and prosper. Ratan Tata is a good leader and thus was able to take a struggling company that was seen as being doomed and turn it into a very productive company that has the respect of many around the world.

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Prior to the arrival of Ratan Tata the work culture in the company was not unlike most companies in India where job security was assured and lethargy was tolerated. It appeared that the Group companies were stuck in a rut and were not engaging in the change that had been taking place in Indian business. In order to shake things up, Ratan Tata implemented what came to be known as the Tata Business Excellence Model. This business model was implemented by way of Tata Quality Management Services. This organization was put into place in order to help Tata companies achieve their business objectives through specific processes. Using this framework, Ratan Tata was able to transform the Tata Group's many companies into much leaner and nimble companies. At its core, Total Quality Management (TQM) is a management approach to long -- term success through customer satisfaction.

In a TQM effort, all members of an organization participate in improving processes, products, services and the culture in which they work (Kujala & Lillrank, 2004).

When Ratan Tata took over leadership of the Group, they were involved in many different businesses. These included: steel, tea, oil mills, cosmetics, chemicals, power and automobiles. Ratan Tata decided that this was too many different industries to be involved in and began selling off those that did not fit with his new vision of the company. His philosophy was that if they were not in the top three companies in a particular industry then they had no businesses doing business there. The advantages to this philosophy are that it allows the company to better focus on the industries in which they do well. Having too many things to concentrate on, all at the same time, does nothing but make you mediocre in all areas instead of being able to excel in a few.

The next initiative that Ratan Tata implemented was that of setting performance goals and a group-wide standard of conduct for the company's executives. He empowered his executives to move away from a directive form of leadership to a more individualized form. Instead of being told what to do, executives where asked for their input on how to handle their management duties. Ratan Tata prodded his mangers to be bold and more aggressive in their jobs, but always was available to help in need be.

In Ratan Tata's last initiative to change the culture of his organization he set out to create a single brand image. When he took over the company each individual business had its own logo which made it hard to identify the business as being part of the Group companies. By implanting one logo, to be used by everyone, Ratan Tata created a sense of one. He wanted the Group to be seen and recognized as a group, and not as a bunch of individual companies, all doing their own thing. The goal was to create a culture that exuded oneness. Ratan Tata was now ready to set out on his plan to go global. This may sound easy but in the end, it is a very complicated process that takes thoughtful consideration in many areas.

Communication Issues

One of the first things that a company should think about when considering going global is any communication issues that might arise. The ability to communicate, and communicate well, is one of the biggest factors in business success. Learning how to communicate globally is the best approach to reaching out to more people across different areas. The first key is to be thoughtful of cultural dissimilarities. When communicating globally, it's significant for one to understand that cultures and beliefs vary across different countries. Even provinces and states within the same country have dissimilar ways of dealing with business or doing certain things. Companies will want to factor in cultural differences and learn to be more flexible in accepting these differences so that they can communicate effectively with their peers from other nations (Gundling, 1999).

The next key is to learn how ones associates deal with things in their countries. The best way to deal with cultural differences is to research ahead of time how different countries handle business meetings or any other type of discourse. "For instance, the Japanese prefer that you get straight to the point instead of making small talk" (Gundling, 1999).

The third key is to be conscious of language barriers. It is important to note that some countries do not automatically use their primary language when doing business. While one may sound smart with witty jargon among those who have been speaking the language for most of their lives, people from other countries may not understand what is trying to be said (Gundling, 1999).

The fourth key is to go over any type of written correspondence before one sends it out to their contacts. It is easy to unconsciously cause misunderstandings when one deals with people from different parts of the world. When reviewing correspondence, it is important to make sure that one is not using derogatory terms or even sentences that may be taken the wrong way (Gundling, 1999).

Staffing Policies and HR Challenges

There are many issues and challenges that can arise when doing business internationally. The one area in which companies feel that they can become more competitive is having the best people and having those people serve their customers in the best way. Consequently one of the key things for companies is to focus on the people in the company, and the customers they serve. This has led to Human Resource Management becoming a big issue for international business (Deresky, 2011).

There are three main staffing policies that companies must become familiar with when looking at doing business globally. These include:

Ethnocentric Staffing Policy -- this is when a company sends people from the nation of the home company, overseas and all senior managers are people who are parent-company nationals. The negatives are that this can lead to resentment among motivated and educated local managers and can affect high staff turnover among junior managers.

Polycentric Staffing Policy -- this is when a company allows local staff to rise to the executive level and be managers. The advantage in this is that host country managers are less likely to make mistakes arising from cultural understandings and is cheaper than using expatriate managers, but can create a gap between head office and regional offices.

Geocentric Staffing Policy -- this is when a company uses staff in foreign operations - no matter what country they come from. This model is expensive to implement because of the increased training and relocation costs (Deresky, 2011).

Leadership and Motivation

When doing business internationally corporate leaders must both coordinate and motivate individuals who are separated by time zones and cultures. Collaboration, at an individual and corporate level, has become a necessity. And in today's dynamic business environment, leaders must take more risks and execute with greater speed, briskly connecting talent and moving information and knowledge around the globe to fulfill organizational needs (Leadership in a Distributed World, 2007). It is within this emerging global world that leaders are required to adapt, culturally, to influence people toward a common goal. This requires getting to know the culture and the people that one is managing in order to know what techniques to use to motivate towards the common company goals.

Good team attributes in the global environment with multicultural teams are those that demonstrate spirit of belongingness. Because of the diversity of… [END OF PREVIEW] . . . READ MORE

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APA Style

Management International Management Ratan Tata.  (2012, February 24).  Retrieved July 2, 2020, from

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"Management International Management Ratan Tata."  February 24, 2012.  Accessed July 2, 2020.