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MBA 503Principles of Management

Assignment

Submitted to:

Javed Tariq

Course Instructor

Department of Business Administration

East West University.

Submitted By:

Habib Hossain MD. Adnan

ID: 2015-1-95-078

Shabnaz-Binte-Shahadat

ID: 2015-2-95-010

Sanjida Sultana

ID: 2015-2-95-045

Abdullah Al Nayeem

ID: 2015-0-95-001

Md. Shariful Alam

ID: 2015-2-95-035

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Sec: 2

Date of Submission: 10th July, 2015

Executive Summery

We have prepared this report based on the organizational culture ofTATA group. In this report, we have worked in the seven category oforganizational culture. TATA is one of the biggest leading companiesin the world. Customer satisfaction is one of the vital reflections ofthe progression toward development for this organization. In the firstchapter, we tried to focus that what is Organizational culture and thehistory of TATA group. Attention to details has been defined. In thesecond chapter, we discussed about the People Orientation, TeamOrientation and the Outcome Orientation of the organization. In thirdchapter, Aggressiveness of the organization and their Stability havebeen highlighted. In the last chapter, we described the Innovation andRisk Taking policy of the company.

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Table of Content

Serial no.

Contents PageNo.

1. Methodology & limitations 5

2. Introduction to organizational Culture 6

3. TATA company overview 7-8

4. Attention to detail 8-9

5. People orientation 9

6. Team orientation 10

7. Outcome orientation 11

8. Aggressiveness and Stability 12-14

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9. Risk and Innovation 15

10. Conclusion and Recommendation 16

11. Scoring Analysis 17

Methodology:

For smooth and accurate study everyone have to follow some rules &regulation. The study impute were collected from two sources:  

Primary sources

-Practical desk work -Internet

LIMITATIONS OF THE REPORT:

On the way of our study, I have faced some problems that termed as thelimitations of the study. In all respect following limitation andweakness remain within which we failed to escape by any means. Theseare follows:

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Limited Information:

It was one of the main constraints that hindered to cover all aspectsof the study.

No direct contact with the organization:

It was not possible for us to make a survey or research by goingdirectly to the organization we were working on.

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Organizational culture:

Organizational culture is a system of shared assumptions, values, andbeliefs, which governs how people behave in organizations. Theseshared values have a strong influence on the people in theorganization and dictate how they dress, act, and perform their jobs.To be brief, organizational culture refers to the personality of theorganization

Seven characteristics of organizational culture are:

Characteristics DetailsAttention to Detail (Precision Orientation)

This characteristic of organizational culturedictates the degree to which employees areexpected to be accurate in their work. Aculture that places a high value on attentionto detail expects their employees to performtheir work with precision.

Emphasis on Outcome (Achievement Orientation)

This characteristic of organizational culturedictates the degree to which employees areexpected to be accurate in their work. Aculture that places a high value on attentionto detail expects their employees to performtheir work with precision.

Emphasis on People (Fairness Orientation)

Companies that place a high value on thischaracteristic of organizational culture placea great deal of importance on how theirdecisions will affect the people in theirorganizations. For these companies, it isimportant to treat their employees withrespect and dignity.

Teamwork (Collaboration Orientation)

Companies that organize work activities aroundteams instead of individuals place a highvalue on this characteristic of organizationalculture. People who work for these types ofcompanies tend to have a positive relationshipwith their coworkers and managers.

Aggressiveness (Competitive Orientation)

This characteristic of organizational culturedictates whether group members are expected tobe assertive or easygoing when dealing withcompanies they compete with in themarketplace. Companies with an aggressiveculture place a high value on competitiveness

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and outperforming the competition at allcosts.

Stability (Rule Orientation)

A company whose culture places a high value onstability is rule-oriented, predictable, andbureaucratic in nature. These types ofcompanies typically provide consistent andpredictable levels of output and operate bestin non-changing market conditions.

Innovation (Risk Orientation)

Companies with cultures that place a highvalue on innovation encourage their employeesto take risks and innovate in the performanceof their jobs.

Overview of TATA:

Tata Motors was established in 1945 as Tata Engineering and LocomotiveCo. Ltd. to manufacture locomotives and other engineering products. Itis India's largest automobile company, with standalone revenues of Rs.25,660.79 crores (USD 5.5 billion) in 2008-09. It is the leader incommercial vehicles in each segment, and among the top three inpassenger vehicles with winning products in the compact, midsize carand utility vehicle segments. The company is the world's fourthlargest truck manufacturer, and the world's second largest busmanufacturer.

The company's 23,000 employees are guided by the vision to be 'best inthe manner in which they operate best in the products they deliver andbest in their value system and ethics. Tata made the shift from alargely Indian company to a global multinational and did it very well.

Quick company review:

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CEO: Cyrus Pallonji MistryFounder: J. R. D. TataFounded: 1945Headquarters: Mumbai, India

The current location of TATA head Office is C-21 and C-36, G Block,Bandra Kurla Complex, Bandra (East), Mumbai, Maharashtra 400098, India

Business sector:

Chemicals Consumer products Energy Engineering Information systems and

communications Services Steel Core sciences

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The Tata Group had a long tradition of inter- national business, so itwas ironic to be beaten to the punch by local competitors. SirJamshetji helped expand his father’s business into China and England.The group attempted to reignite this spirit in 1962 when it launchedTata Exports (now Tata International) to export Tata products. Thiseffort saw limited success. It took a visionary leader like Ratan Tatato realign with the trajectory of growth through foreign trade.Starting in the year 2000, many of the Tata organizations went on anacquisition spree to meet the mandate of 30% annual growth. Thegroup’s revenue base ballooned from a meager US$22 billion dollars toUS$100billion dollars in a short span of 14 years. The group continuesto do business across 85 countries. In 2011–2012 the Tata group had

international sales of $58.5 billion, accounting for 58% of theirtotal revenue. The remainder of the chapter describes the factors thatled to such a spectacular growth.

To decode the Tata Group’s evolution and success it is important tounderstand their organizational culture and climate.

Attention to Detail:

The Workforce Focus category addresses practices to enable a high-performance workplace with an engaged workforce. It emphasizesintegration across workforce management practices with theorganizational objectives to drive strategy execution. A culture that

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places a high value on attention to detail expects their employees toperform their work with precision.

Tata put extensive priority on leadership and management development.

In speaking with the Tata leaders and researching their organizationalpractices, there appears to be two key approaches used to build aculture steeped in ethics. First is the use of formal agreements andaudits to set clear expectations and monitor activities. Second is thecareful selection of employees, particularly of those in leadershippositions. This ensures consistent role modeling by leaders andcontinual reinforcement of the key messages and expectations.

Formal Agreements and Audits

The formal agreements and audits serve to communicate expectations andtrack compliance. It is a policy and procedure based approach tomanaging across the various businesses and a diverse employeepopulation that is spread across the world. Below are outlined thetypes of agreements used with employees, individual organizations, andnewly acquired organizations.

People Orientation:

A culture with People orientation is the degree to which managementdecisions take into account the effects on people in the organization.A people-oriented management style tends to energize employees becauseit makes them feel appreciated for the work they do. One of thebiggest benefits of people-oriented management is that the focus onemployee relationships makes employees feel that they make adifference in the company. And better, more effective efforts comefrom people who feel that they’re a part of a company’s success.

The Tata group is probably the only one of its kind with this richnessof intellectual capital, because of its size and the diversity of itsoperations.

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Tata has a rich heritage of looking after its people just as theFounder Jamsetji Tata pioneered not just businesses but also employee-friendly practices; Tata employees enjoyed benefits such as an 8-hourworkday, good housing and living conditions, way ahead of the times.

As the founder of the company, Jamshetji Tata also placed twoimportant practices that have defined the Tata culture as it standstoday. Taking care of the employees of the company was front andcenter in the way Jamshetji ran his business. The company providedmany benefits that were unheard of at the time, such as medicalbenefits to the sick and to women and children, pension funds foremployees, and on-the-job training. Employees at the mill werecarefully selected for their skills and offered training, a pensionplan, and health care. Interestingly, the mills also hired women andoffered onsite child care. Christabella Noronha, Chief of GroupPublications at Tata Sons, once mentioned that the various trustssupport numerous not-for-profit institutions such as a cancerhospital, various community projects, and institutions for highereducation.

Tata group also has an internal code of conduct which acts as anantecedent of an ethical climate. All existing and new employees ofthe Tata companies are expected to sign and abide by the Tata Code ofConduct. The code of conduct has 25 clauses that serve as a guide toethical practices for individuals and organizations. It includes areassuch as antibribe policy, employee welfare, equal employmentopportunity, cooperation, sustainability, financial reporting, insidertrading and disclosures, and ethical conduct (tata.com). The clause onethical conduct is noteworthy in its inclusion of a global perspectiveand sensitivity to cultural variations. It reads “Every employee of aTata company, including full-time directors and the chief executive,shall exhibit culturally appropriate deportment in the countries theyoperate in, and deal on behalf of the company with professionalism,honesty and integrity, while conforming to high moral and ethicalstandards.

Team Orientation:

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Tata has become one of the greatest diversified companies in India.They are talking of achieving a two-fold goal by 2020: first, doublethe current figure of 115,000 women in a total employee workforce of540,000; the second, more aspirational goal, is to groom and develop1,000 women leaders in the group.

Tata HR managers try to remove hurdles in the way of career growth.There is also a need for corrections at the policy and the practicelevels, in terms of what needs to be done to achieve their goals. Thechange has to be brought in layer by layer, across the entire pyramid.Most of the companies that have attempted the road to diversity havetaken 8-10 years. Tata believes that by 2020, they should be fairlyclose to what they have targeted for.

The Tata Group has a strong focus on internal hiring, which likelycontributes to its ability to maintain a consistency in workactivities. Most Tata leaders are hired from within which ensures thatonly those who have proven themselves on the ethical front canprogress. However, some may argue that such hiring practices minimizeopenness to outside ideas and may be detrimental to innovation.Through the training provided by the Tata Management Training Center(TMTC), emerging leaders from around the world learn about “ethicaldecision making.” Former Head of the TMTC, Chetan Tolia, described theuse of case studies to develop an ethical mindset. Additionally, thereare frequent communications on the topic to employees at all levels.Counselors are available to work with employees to build awareness onthe topic.

TAS (earlier known as The Tata Administrative Services) is onespecific program focused on selecting high potential new graduates andtraining them to fast track into general manager roles at the variousTata businesses. Individuals who graduate from this program are givena significant responsibility for growing businesses. Only those whomeet the performance criteria and are deemed to fit the organizationalculture are promoted to leadership roles.

The TMTC is another internal-facing entity focused on growingleadership. Although the TMTC has a history that predates Ratan Tata,his vision has shaped the current focus of the center. The purpose of

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the TMTC is to grow future leaders for the organization. According tothe former director of the TMTC, Chetan Tolia, the center partnerswith faculty from the top business schools to offer leadershipeducation. Through classroom sessions and action learning projects,the programs promote a focus on values and ethics. In recent yearsincreasing emphasis has been placed on skills such as innovation andrunning a global business.

Reward Strategy

Tata leaders create an environment for employees to push the envelopeand do what it takes to achieve these grand visions. Mr. Muthuram, theformer managing director and current Vice Chairman of Tata Steel, shedsome light on this matter. He believes what makes the difference isthe companies reward strategy. The Tata Group rewards employees fortaking large risks even if they fall short of fully realizing theirgoals.

Outcome Orientation:

Outcome is the degree to which management focuses on results oroutcomes rather than on techniques and processes used to achieve thatoutcome.

From TATA’s other cultural attributes we could find that-

Tata emphasizes on high performance work force and workenvironment

They give priority and importance to the elements that wouldhelp them to reach to their goals

Tata believes that only internal work environment consistencyand leadership would become the most reliable key to success.

TATA provides its employees with best possible corporatebenefits that could be given to ensure the moral and commitmentof the employees toward achieving the organization’s goals.

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Leaders are selected only from the internal best employees toensure the overall efficient performance of the company.

TATA’s CSR activities could be count as the method of gainingthe popularity within the community to build a strong brandidentity.

Innovation and technological advancement as well as theacquisition spree of TATA has ensured its focus towards becomingmore strong dominant figure in the market.

Overall it could be seen that TATA is heavily relying on itsinternal work efforts and consistency to reach towards its desiredgoals rather than only focusing on the results of its currentperformance. TATA believes that the more they give emphasis on theinternal work environment the more they tend to become a success.

So this clearly indicates that TATA is not an “Outcome oriented”company. They give priority how the results are achieved ratherthan focusing on the results.

Aggressiveness:

Aggressiveness is a very important organizational culture for anorganization because it helps the organization to outrun itscompetitors and be the dominant figure in the market.

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Aggressiveness refers to the degree to which organizations areaggressive in the competition rather than easygoing.

Aggressive culture which employees are aggressive and competitiverather than cooperative. Jamshetji Nusserwanji, is founder of TATAGroup emphasizing on having an aggressive work environment. Everyemployee works toward to killing competition in the market. TATACompany is a perfect example who follows that aggressiveness strategyand this strategy has really paid off for them. The aggressiveness hasbeen shown in three different categories which have been shown in thefollowing diagram:

Diagram: Three wings of aggressiveness for TATA Company

Selecting one than more brands

TATA Group intention has been that it (brand) would create a singlestrong entity very aggressively that will benefit all the memberfirms. TATA Group fights a Mitsubishi or an X or Y in the India, itbetter have one rather than forty brands. They have the ability topromote that brand in a meaningful manner in India and worldwide

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contained and dominate very aggressively. They are known as thecompetitor killer whether it is within the country or outside thecountry. They perform very aggressively in the market so that theircompetitors may not get any chance to challenge them in their way todominating the market.

Acquisitions

As a part of their aggressiveness they prefer the extensiveacquisition in various parts of the world. In the past 10 years, thegroup has collectively spent over US$20 billion across 28 acquisitions(Mahalingam, 2010). The most expensive of these acquisitions was ofCorus, the largest steel maker in Europe, for which the Tatas paidUS$12.3 billion. Corus was twice the size of Tata Steel when acquired.Another well-known acquisition was of Jaguar Land Rover (JLR), whichwas purchased from Ford for US$2.3 billion. Tetley Tea, Eight O’ClockCoffee, and Daewoo trucks are some other well-known brands acquired bythe Tata group.

CSR Activities

TATA group loves to spend for the sake of CSR activities in differentparts of the country which is another part of their aggressiveness.Through their CSR activities, the company maintains a high reputationof brand and aggressiveness in their activities because people see thegoods that the organization is doing for the country through their ownvery eyes and thus helps the organization to maintain a highreputation in the market to outrun their competitors by building uphuge trust of people towards the different brands of the company. Someof the CSR activities have been shown below:

CSR Activities of TATA Group1. TATA Group is well known for their scholarships to the meritoriousstudents to get the advanced education both from home and abroad.2. TATA group helps the young to develop their leadership skill andprovides the opportunity to be the future leader.3. They provide their employees benefits such as medical benefits tothe sick and to women and children, pension

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4. They provide huge benefits funds for employees, and on-the-jobtraining.5. The organization has had a long history of supporting the localcommunity through activities such as bringing power supply, water andother necessities.6. The Tata family has given away most of their family wealth tophilanthropic causes. Such practices provide insights on the Tataculture that emphasizes both, those who work for the Tata and thecommunities in which the Tata companies exists.

Stability

Stable cultures are predictable, rule-oriented, and bureaucratic.These organizations aim to coordinate and align individual effort forgreatest levels of efficiency. When the environment is stable andcertain, these cultures may help the organization be effective byproviding stable and constant levels of output.

So, TATA Group places on high value on rule-oriented, predictable andbureaucratic in nature. This company typically provide consistent andpredictable levels of output and operate best in non-changing marketcondition.In this culture of TATA Group prevents quick action, and asa result may be a misfit to a changing and dynamic environment.

For example, The CEO of TATA Group Ratan Tata has emotional stabilitythat very low anxiety within him and has great sense of security withhis future leadership. He has produced very positive affect on future

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leadership of TATA Group and creates be effective impact in market byproviding stable and constant levels of output in originality andversatility. By making £1200/- car he has shown his great interestwith and innovation seeking personality.

There have been several changes across companies. We looked into thebiggest gainer and biggest losers in the last one year from the listedentities of the Tata Empire. Such as TATA Coffee, TATA Elxsi, Airline,Automotive, Steel, Chemicals, Hospitality, Construction, Financialservices.

One of the biggest strategy they maintain to stabilize their businessis partnering the business. Whenever they acquire a new company theynever say that they have acquired the company they always mention thatthey are partnering in the business where both sides have something toadd to the success of the institution and the focus should be oncombining expertise and partnering and this strategy has paid off totheir way of stability.

The other ways that has been helping the business to maintain a smoothstability are:

• Maintain a good expense on the R&D of the organization.

• Provide the acquired business the opportunity to run business attheir individual names and logos for so many months.

• Building the trust of the people towards the products of thecompany.

• By shaping the strategy according to the vision of the company.

• Launching new brands only when they are fully assured of it.

• Creating good leaders within the organization and persisting withthem.

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Innovation and Risk Taking:

Companies with cultures that place a high value on innovation

encourage their employees to take risks and innovate in the

performance of their jobs. Companies with cultures that place a low

value on innovation expect their employees to do their jobs the same

way that they have been trained to do them, without looking for ways

to improve their performance. There is an old saying: "Necessity is

the mother of all invention”. Innovation is closely related to risk

taking given that it is not normally clear whether the new inventions

will bring harm or good to an organization. Tata leadership team has

their willingness to take risks and stick by their decisions even when

their judgment is questioned. Initially the employee of Tata was not

interested about taking risk, for that reason they does not

innovate new product. It was afraid of local business and had to

rely on only the brands that were no 1 and 2 in the market

position. But now the name of became well known in the

international arena with the launch of the cheapest family car, the

Nano, priced at approximately US$2,500. It is the example of risk

taking and innovation of the employee of Tata. Because Nano is

launched in a cheapest price and it is very risky. Now-a-days Tata

have a strong innovation and risk taking organizational culture.

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Conclusion and Recommendation:

Tata Group is a trading company to a global conglomerate, during a

long span of 145 years, is an example of right leadership organization

and also the example for established multinationals looking for new

strategies.

The organizational culture of Tata Group can be summarized in the

following points:

(1) Tata put extensive priority on leadership and management

development. There are two key approaches used to build a culture

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steeped in ethics. First is the use of formal agreements and audits to

set clear expectations and monitor activities. Second is the careful

selection of employees, particularly of those in leadership positions.

This ensures consistent role modeling by leaders and continual

reinforcement of the key messages and expectations.

(2) The management of Tata Group is very careful about how they

achieve their outcome.

(3) The Tata group is probably the only one of its kind with this

richness of intellectual capital, because of its size and the

diversity of its operations. Initially Tata group was centralized but

from JRD Tata Group decentralized and taking care of the employees of

the company was front and center.

(4) The Tata Group has a strong focus on internal hiring, which likely

contributes to its ability to maintain a consistency in work

activities. Most Tata leaders are hired from within which ensures that

only those who have proven themselves on the ethical front can

progress. The Chairperson of Tata Group also stays for a long time.

(5) In Tata group there are huge takeovers, acquisition and huge

diversified business portfolio. The group has made 28 acquisitions in

a span of 10 years and made profit on several of them.

(6) The decision and actions of Tata group are long term stay. They

take each and every decision for the long run.

(7) Initially the employee of Tata was not interested about taking

risk, for that reason they does not innovate new product. Now Tata

leadership team has their willingness to take risks and stick by their

decisions even when their judgment is questioned.

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Finally we can say that the overall organizational culture of Tata

Group is strong.

Categories of Organizational Culture Scoring Status

Attention to detail: Tata places high value on the attention to detail.

Strong level

People Orientation: Tata has a rich heritage of looking after its people, Employee-friendly practices, An 8-hour workday, good housing and living conditions, way ahead of the times, Tatagroup also has a strong internal code ofconduct.

Strong level

Team Orientation: Tata Group has a strong focus on internal hiring for future leaders. Strong team orientation,but not in the case of leadership selection as leaders are chosen from only internal employees.

Moderate level

Outcome orientation: Weak outcome oriented as TATA focuses mainly on how to improve internal work criteria to meet the goals rather than focusing on results.

Weak level

Aggressiveness: TATA Company is following aggressiveness strategy and this strategy has really paid off for them.

Strong level

Stability: TATA Group places on high value on rule-oriented, predictable and

Strong level

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bureaucratic in nature.

Innovation and Risk Taking: TATA companyis very innovative and their risk takingpolicy is really appriciatable.

Strong level

Scoring Analysis