TATA MOTORS- A Case Study.

Organizational change & Organization development

By Sashi.Prabhu
Context: individual presentations –ICFAI -CASE STUDY.
Financials of Tata motors
– at a glimpse. TURNOVER IN (Rs) CRORES

20602
2005-06

17419
2004-05

13223
2003-04
9097
2002-03
7506

2001-02

0 5000 10000 15000 20000 25000

PROFIT AFTER TAX IN Rs.Crores

2005-06
1529
2004-05 1237
2003-04 810

2002-03 300
2001-02 -54

-500 0 500 1000 1500 2000

PROFIT AFTER TAX IN Rs.Crores
 Sales volume in units.

189000
2005-06 215000

179000
2004-05 190000

140000
2003-04 152000
104000
2002-03 106000
89000

2001-02 81900

0 50000 100000 150000 200000 250000 300000 350000 400000 450000

passenger vehicles commercial vehicles

 Turn around………………………..
a turn around from a 500 crores loss in 2001 (5 years) to…
A 1509 crores profit in 2006………..

the fifth largest manufacturer of commercial vehicles in the world.

3 manufacturing facilities located strategically at Jamshedpur,

Pune, & Lucknow employing 18000 employees and producing
150 products with 250 variants.
 CHANGE INITIATIVES……………
formulated a six year road map . 3 phases of two years each……
Of turnaround…..domestic growth …and international growth….
Revenues have doubled
ROCE have increased Six Times
EVA has Quadrupled.
long term strategy &vision of driving improvements through out the
Organization.
recognition of people,suppliers/vendors,dealers as vital links in the
Transformation process.
brought in improvements in the management systems & process
To establish itself as a “high learning” organization.
people :
Measures of leadership effectiveness was established.
Fast trackers were identified & encouraged to take more responsibility.
 • key strategies deployed
• DeRisk the business model & create a growth plan that would give
Sustained profits by getting less cyclic segments in a big way.
• Focus on non-vehicle businesses like spare parts,finished products
And bus body parts.( 3.79% to 4.05% 2003-04 viz a viz 2005-06).
•Thrust on exports
•Overseas acquisition,alliances & technology partnerships.
Acquisitions: in 2005 acquired 21% stakes in HISPANO .S.A a
Spanish high end luxury bus manufacturer with an option of 100%
Holding to tap new business avenues overseas.
• Acquisition of Daewoo Motors leading to doubling of exports to
874 vehicles and an overall sale of 4590 units.
• Rs.10000 crores of fresh investment in the next 3-4 years into
Manufacturing facilities & new products.
•Prune export focus from 70countries to 15-20 countries and have bigger
Volumes and greater market shares. Look at Russia as a growth market
To sell light trucks,buses and pickup.
• Set up a new engineering set up linking vendors who are technology
Houses as well as export houses. Working with Koreans to develop
Advanced version of truck which will be launched in the next 4-5 years
Strategic Planning Process
 LOW COST APPROACH: a deliberate position of “ low cost &
Acceptable features” with focus on fuel efficiency.– world class product
at Asian cost.
 Partnerships outside organizations:work with vehicle factory –Jabalpur
Cummins, Holset and Taco.

 New Technology Road Map: 2009-10 with “ACE” and having 70%
Standardized parts.

 Identification & instutionalisation of of 19 top level process owners

& 90 sub-process owners. These have been documented & put in place.

 Vendor involvement in product development.

 To transform from a bureaucratic, inward looking organization to a
Customer centric one.
 put an IT Policy and CRM in place.

 A new process Management Manual to ensure that the inputs give

Required outputs. Every process has an owner and other individuals
Have to provide data & info to make the process robust e.g the M.D
Is the process owner to develop Vision &Mission.
 New Product Development and e-sourcing process.

 Implementation of Balance –Score Card: High Performance culture

All critical positions to be mapped and fill up the competency gaps.
Employee training and empowerment have paid dividends.80% of
Employees covered in 1700 teams . Revenue per employee is at
60 Lakhs … triple in 3 years……..
 Benchmarking of processes with GLOBAL best.
 Out source manufacturing of low end items which will help
organization to focus on 2 key strategic dimensions.
c) Understanding and developing market segments
d) Commitment to customers

Now sustainance