You are on page 1of 130

14-C, VASUNDHARA GHAZIABAD (U.P.

)
CERTIFICATE

This is to certify that project titled A STUDY ON THE


CONCEPT OF PARTICIPATIVE MANAGEMENT IN AN
ORGANIZATION A CASE STUDY ON. is bonafied work
carried out by Ms Viprali Rastogi, d/o Mr Anil Kumar Rastogi
in partial fulfillment of the requirement for the award of the
degree of MASTER OF BUSINESS ADMINISTRATION from
U.P.TECHNICAL UNIVERSITY,LUCKNOW.

Prof. Nikhil Garg


(DEAN JIM)

14-C, VASUNDHARA GHAZIABAD (U.P.)


CERTIFICATE

This is to certify that project titled A STUDY ON THE


CONCEPT OF PARTICIPATIVE MANAGEMENT IN AN
ORGANIZATION A CASE STUDY ON. is bonafied work
carried out by Ms Viprali Rastogi, d/o Mr Anil Kumar Rastogi
in partial fulfillment of the requirement for the award of the
degree of MASTER OF BUSINESS ADMINISTRATION from
U.P.TECHNICAL UNIVERSITY, LUCKNOW.

Prof. Alok Satsangi


(HOD,Marketing Dept)

OBJECTIVES OF STUDY

The concept of workers participation in management (WPM)


is a broad and complex one. Depending on the sociopolitical environment and cultural conditions, the scope and
contents of participation may change. In any case, a
common thread running through all interpretations is the idea
of associating employees in managerial decisions-making.
The view expressed by The International Institute for Lab our
Studies (Bulletin 5) is worth quoting here. WPM has been
defined as, the participation resulting from practices which
increase the scope for employee share of influence in
decision making at different tiers of organizational hierarchy
with concomitant assumption responsibility. In the words of
Gossip, workers participation may be viewed as:

An

instrument

for

increasing

the

efficiency

of

enterprises and establishing harmonious industrial


relations;
A device for developing social education for promoting
solidarity among workers and for tapping human talent;

A means for achieving industrial peace and harmony


which leads to higher productivity and increased
production.

A humanitarian act, elevating the status of a worker in


the society ;
An ideological way of developing self-management
and promoting industrial democracy

The major objectives of the schemes of workers


participation are:
To improve the quality of working life by allowing
the workers greater influence and involvement in
work and the satisfaction obtained from work;
To secure the mutual cooperation of employees
and employers in achieving industrial peace
;greater efficiency and productivity in the interest of
the enterprise, the workers, the consumers and
nation.

INTRODUCTION

PARTICIPATIVE MANAGEMENT PROFILE


The importance of helping leaders explore participative
management became apparent as the amount of confusion
on the subject increased. Participative Management Profile
fills the need to have an inventory that not only clears up the
ambiguities but provides simple, straightforward self
assessment and feedback.

Building on the previous research, we chose to create the


Participative Management Profile (PMP) as a model-based
assessment rather than use empirically based scaling. In
other words, we built a model based on the research and
determined scales using the model rather than using
statistical analyses. The model that PMP implements is
normative; it specifies that under certain conditions there is a
"one

best

way"

decision-making

mode.

The

PMP

incorporates what we see as the five major aspects of an


Optimized, decision-making process.

Although the instrument provides a style profile, we believe


that style is less important than clear thinking about
decisions and sensitivity to the needs of group members.
The danger in focusing on style is that the leader will see

his/her profile as a set of fingerprints that are difficult to


change. We believe that a leader can use any method of
decision making well or badly, and the difference comes from
his/her analysis of situations and knowledge of probable
group member reactions. The PMP emphasizes
effectiveness over style.
DEVELOPMENT
The development of the PMP centered on enhancing the
Maier (1963) model and writing items that illustrated the
conditions under which various modes of decision making
were indicated. We included 20 common work situations that
were not restricted to business or for-profit settings - ones
with which most respondents would be able to identify. The
items were written to the model, five items per decisionmaking mode. The instrument was then completed by
creating an easy scoring system, interpretive material, and
an

opportunity

for

doing

some

action

planning.

In each of the 20 situations represented by the PMP, there


are cues to which the respondents react in deciding how to
decide. Not every situation contains answers to all five of the
questions

from

the

"Participative

Management

Tree."

Overriding considerations in some of the situations make it


unnecessary to include complete information. The items
should not be thought of as miniature case studies.

ADMINISTRATING THE PMP

The

PMP

is

an

instrument

intended

for

use

with

organizational leaders at all levels. The 20 typical work


situations provided charge the leader with deciding how to
decide. The respondent indicates one of four modes of
decision making, and a profile is constructed that suggests
the person's strengths and weaknesses in determining
whether and how to involve others in decision making. The
instrument measures the extent to which a leader optimizes
commitment to implementing the decision on the part of the
work group.

The respondents read each of the 20 situations and decide


which decision-making method (Consultation, Command,
Consensus, or Convenience) is appropriate for that situation.
They circle their choices on the response form in their
booklet. The PMP takes about 15-20 minutes to complete
and 10 minutes to score.

40 Consensus Decision Making Activities


Group consensus is a concept that is often preached but
rarely practiced. Skill Builders: 40 Consensus Decision
Making Activities is an invaluable resource that will help your
teams turn this concept into reality.

Organized according to the Group Consensus Model, this


collection provides you with the ability to select the activities
that are just right
for your groups specific training needs. The flexible format
allows you to:

Assess your

groups decision making

abilities.

Target specific developmental needs.

Create custom training around actual work


experiences.

Skill builders: 40 Consensus Decision Making Activities is a


includes:

Reproducible participant handouts

Detailed preparation, administration, and


debriefing information

Discussion questions and suggestions for


varying the activities

Easy-to-follow facilitator guidelines

Handy reference table for pinpointing the


best activities for your training needs

This activity collection should be part of every trainers


library. With Skill builders: 40 Consensus Decision Making
Activities, your groups will become more productive, make
higher quality decisions, and reach the greatest potential of
their decision-making abilities.

"I used the Mars Surface Rover (Leadership Edition) activity


with new professionals and upper class students who
supervise student residential advisors in the college's
residence halls. Where so often these supervisors see team
problems as the fault of the individual team members, the
Mars Surface Rover activity opened them up to the
possibility that their style of leadership might also be limiting
team effectiveness. The activity provides easy-to-understand
terminology about leadership styles as well as an opportunity
for participants to reflect on their own styles in a nonthreatening way."

Mars Surface Rover

Facilitative leadership has become an important force in the


move to team-based organizations. But before traditional
leaders can change, they need to know what facilitative
leadership is and how it differs from what they have been
practicing in the past. This game - the original, awardwinning Mars Surface Rover - is a great training tool for
teaching

facilitative

leadership

skills.

Facilitative Leaders:

Concentrate on teaching rather than directing others

Focus on helping others learn and develop

Provide guidance when a group is struggling or needs


direction

Lead by asking questions rather than giving orders

Manage interactions between groups to provide their


group with the best work environment

Learning Outcomes:

Experience the concept and benefits of facilitative


leadership

Learn how a facilitative leadership style generates a


team atmosphere

Discover the drawbacks of traditional (autocratic) or


passive (uninvolved) styles of leadership

Understand the important balance between too much


and too little authority

Theory
The heart of the Mars Surface Rover Leadership Edition is
found in its roles, designed to specifically demonstrate the
typical leadership approaches. These roles are based on the
HRDQ R&D Team's research and experience with leaders
trying to make the transition to a more facilitative style. The
facilitative leader role allows participants to demonstrate the
behaviors associated withthe preferred leadership skills
highlighted in Burress' Team Leader Survey. These 6 skills
include:

Communication

Thinking Skills

Administration

Influence Skills

Interpersonal Skills

Change Management

How It Works

Three teams are assigned the task of building a prototype


vehicle for ferrying astronauts across the surface of Mars.
Using private instructions, team leaders lead their teams
passively, traditionally, or facilitative. At the end of the game,
teams race their finished vehicles. The fastest, most
efficiently built rover most often belongs to the team with the
facilitative leader!

Uses for Mars Surface Rover Leadership Edition


Mars Surface Rover Leadership Edition is effective when
used as a stand-alone activity as well as a component of a
larger training program. Use Mars to:

Help new leaders incorporate facilitative leadership


into their developing style

Re-train traditional leaders

Assist managers who oversee several teams or


coordinate teams

What to Order/Product Contents

Each Complete Game includes materials to simultaneously


train 3 teams of 5 participants. All parts except for the
Participant Guides are reusable. Participant Guide Refill 5Packs

are

also

available

for

individual

purchase.

For larger groups, order one Extra Game Pack for each
additional team of 5 participants.
Our Customer Service Team is available to assist you with
determining your training material needs.
Complete Leadership Game includes:

3 boxes of reusable parts (batteries included)

Facilitator Guide

15 Participant Guides

3 stopwatches

4 calculators

1 tablet of 30 price sheets

1 set of 3 reusable leader roles

Convenient tote

Extra Game Pack (for one team of 5 participants):

1 box of reusable parts (batteries included)

5 Participant Guides

Stopwatch

Calculator

1 set of each leader role

Leadership Edition Facilitator Guide features (included in


the Complete Team and Deluxe Games):

Administrative guidelines

Theoretical background

Facilitative Leadership Model

Leader Roles Summary

Description of facilitative leader skills

Suggested Facilitative Behaviors

Optional training designs

Normative information

Answers to frequently asked questions

Debriefing questions

Reproducible participant handouts and transparency


masters

Complete Deluxe Game includes:

3 boxes of reusable parts (batteries included)

2 Facilitator Guides (one for each version)

15 leadership edition Participant Guides

21 team edition Participant Guides

3 stopwatches

4 calculators

2 tablets of price sheets

3 screens

18 reusable task sheets

Set of 3 reusable leader roles

Convenient tote

Deluxe Leadership Upgrade Kit* includes:

Team version Facilitator Guide

21 team version Participant Guides

3 screens

18 reusable task sheets

1 tablet of price sheets

THE COMPREHENSIVE LEADER

How do you develop leaders with visionary qualities those


who possess knowledge of themselves, those they lead,
their

organizations,

and

the

world?

The Comprehensive Leader is a powerful tool, measuring


the behaviors that indicate strength or weakness in those 4
key areas. Through a 40-item assessment, participants gain
new insights into their leadership behavior and their
untapped potential and learn how to put visionary
leadership into practice.

Learning Outcomes

Learn the concept of visionary leadership

Identify strengths of strategic and visionary leadership

Gain insight on how others perceive leadership


behavior

Theory
The Comprehensive Leader is based on extensive research
of the relevant literature on leadership. The foundation of the
Model of Comprehensive Leadership is active knowledge
knowledge that is in constant development and consistently
provides the basis for leadership behavior. The Model of
Comprehensive Leadership captures the dimensions of
leadership knowledge necessary for visionary leadership.
The leadership dimensions of the model are depicted in a
series of concentric circles to convey the distinct yet
increasingly expansive nature of each field of knowledge.
The key to visionary leadership rests in expanding
knowledge in all dimensions and acting on that knowledge.

How It Works

The assessment presents 40 statements pertaining to


current leadership behavior. After scoring is complete,
participants create a profile by plotting their sub scores in the
4 dimensions of leadership on charts. Feedback scores from
associates provide a side-by-side comparison. Participants
then review the 15 possible leadership profiles. Finally,

thought-provoking questions encourage individuals to find


insight from the assessment results and take action for
improvement.

Uses for the Comprehensive Leader

A variety of leaders can benefit from the instrument,


including team or department leaders, middle managers, and
senior-level contributors. As with all HRDQ assessments,
The Comprehensive Leader is effective as a stand-alone
instrument or as a component of a larger training initiative
flexible enough to be used at various stages of a leadership
development program.
The instrument can also be used as a complement to other
leadership models. Ideas for building bridges between The
Model of Comprehensive Leadership and other popular
leadership models are presented in the Facilitator Guide.

What to Order/Product Contents

Order one Facilitator Guide per facilitator and one Participant


Guide per participant. To provide individuals with feedback,
order one Feedback Form for up to 5 of the participants
employees, peers, or managers.
Facilitator Guide includes:

Administrative guidelines

The Model of Comprehensive Leadership

Description of the leadership dimensions

At-a-glance tables highlighting the benefits of each


dimension

Suggested training design

Normative data

Reliability

Suggestions for relating the instrument to other


leadership models

Overhead transparency masters

Reproducible participant handouts and activities

Participant Guide includes:

40-item inventory

Pressure-sensitive response form

The Model of Comprehensive Leadership

Description of the leadership dimensions

Diagrams for charting scores

Interpretive information for each of the 15 possible


leadership profiles

Reflection questions

Action planning

Feedback Form includes:


40-item inventory.
Pressure-sensitive response form.

The word participation means sharing the decision


making power with the lower ranks of the organization
in an appropriate manner.Paritcipation has a unique
motivational power and a great psychological value. It
promotes harmony and peace between workers and
management.

When

workers

participate

in

organizational decisions, they are able to see a big


picture clearly ie, how their actions would contribute to
the overall growth of the company. They can offer
feedback immediately based on their experiences and
improve quality of decisions significantly. Since they
are involved in decisions from the beginning they tend
to view the decisions as their own and try to translate

the rhetoric into concrete action plans with the zeal and
enthusiasm.

Participation

makes

them

more

responsible. They are willing to test initiatives and


come out with cost-saving suggestions and growth
oriented ideas. The feeling of being treated as equals,
forces them to repose their confidence in management
and accept plans of rationalization, expansion, etc,
without raising serious objections. Since they are
treated with respect now, they begin to view the job
and the organization as their own and commit
themselves to organizational activities wholeheartedly.
Bilateral decisions help in bringing out radical changes
in organizations systems, plans and procedures more
easily. Employees do not feel threatened by such
moves, as they understand and appreciate the reasons
behind such strategic shifts
The implications of workers participation in management
have

been

summarized

by

International

Lab

our

Organizations thus:
Workers have ideas which can be useful.
Upward communication facilitates sound decisions
making. Workers may accept decisions better if
they participate in them.
Worker may work more intelligently if they are
informed about the reasons for and the intention of

decisions

that

are

taken

in

participative

atmosphere.
Workers may work harder if they share in decisions
that affect them
Worker participation may foster a more cooperative
attitude amongst workers and management thus
raising the efficiency by improving team spirit and
reducing the loss of efficiency arising from industrial
disputes.
Workers participation may act as a spur to managerial
efficiency

FORMS OF PARTICIPATION
The word participation is a glamorous term. Workers
welcome it because it enhances their status in the company.
Employers use it to exhibit how progressive they are.
Unions want it because it brings about a new power equation
between lab our and management. Irrespective of these
being interpretations, participation is welcomed at all levels,
because it has a tonic effect on the psychology of an
individual. The term workers participation in management,
is generally interpreted in four different ways:
i.

It is a way of sharing information with workers.


Management keeps the workers informed about
what is going on within the organization. The final
decisions are taken by the management. Workers
are allowed to express their opinions regarding
various organizational matters.

ii.

It is joint consultation prior to decision-making.


Workers are taken into confidence, invited to share
the information. Participate in discussions, suggest
alternatives to solve an issue and enjoy a greater
say in the decision-making process.

iii.

Mere

sharing

of

information

and

influencing

decisions through discussions in a limited way will


not

enhance the status of

meaningful,

participation

workers, To be

should

mean

active

involvement of workers, where they are treated as


members of a decision-making where workers are
formally involved in resolving work related issues .

iv.

In the final analysis, workersparticipation may


involve workers in all strategic policy and operational
issues, treating them as active members or even
partners

with

equal

voting

rights.

Workers

participation here implies self management or self


control.
Mhetras (1996) while reviewing the progress of joint
management councils of thirteen enterprises belonging to
different industries spread over in eight states identified
five levels of participation.
Informative Participation:
It refers to sharing of information with workers regarding
economic position of the firms, state of the market,

production and sales programme, work methods, balance


sheet, expansion plans etc.Here the workers have no
rights

to

scrutinize

the

information

provided

by

management.
Consultative Participation:
This involves a higher degree of sharing of views of the
workers and giving them a chance to express their views
on various issues concerning work, work place, working
conditions, market standing, financial status, etc. Here the
joint council of workers and management works as an
advisory body only. Management may or may not accept
the suggestions.
Associative Participation:
Here the council is not purely advisory. The management
is under a moral obligation to accept and implement the
unanimous decisions of the council.
Administative Participation:
Here there are a greater degree of sharing authority and
responsibility of managerial work and allows workers a
little more autonomy in exercising administrative and

supervisory

powers

in

respect

of

welfare,

safety,benefits,rewards etc.
Decisive Participation:
This is the highest form of participation where decisions
are taken jointly on matters relating to production, safety,
welfare etc.
In view of these different views it is difficult to define the
term.It can only be described as system of communication
and consultation where workers are kept informed about
the affairs of the undertaking and through which they
express their opinions and contribute to management
decisions.

GOVERNMENT POLICIES&ADMINISRATION

The participation of workers in management in India is not


a novel idea, imported from outside. Mahatma Gandhi
advocated that employees

must regard themselves as

trustees and make lab our master of the means of


production.He insisted that capital labour should be
supplement and help each other ; they should be a great
family,living in unity and harmony.Since independence
several

schemes

have

been

formulated

by

the

government of India to promote workers participation in


management,which are discussed below.
Mill Committees:
Instances of informal joint consultation can be traced back
to a second decade of the present country,in cotton
textiles industry.The employers in the textiles industry
stated joint consultation with the workers,by establishing
Mil Committees which were not merely to ascertain and
represent the grievances of workers. But the management
did not accept the committees as spokesmen on behalf of
the emerging TradeUnion, the existence of they preferred

to ignore. Though such consultation was of rudimentary


type, yet it was significant as it was first of its kind in the
country.
Royal Commission on lab our and Workers
Participation in Management (1920)

The Government of India, in India, in 1920 constituted joint


committees in their printing presses and railways. During
the same period such committees were formed in TATA
Iron and Steel Company, Jamshedpur.At the instance of
Mahatma Ghandhi, the workers and employers of the
Textiles mills in Ahemdabad agreed in 1920 for mutual
discussions and consultation of issues failing which they
were to be resolved by arbiteration.There was

permanent ArbitrationBoard consisting of a nominee each


from the association of labour and employers. Although
the scope of mutual consultatation in our country.The
Royal Commission on Labour opined that the system is
admirable in its intention and has had a substantial
measure of success.
From 1922 onwards joint committees of workers and
management were formed in Bengal, Madras and
other states. One of the examples was the formation
of Workers Welfare Committees in Buckingham and
Carnatic

Mills,

Madras(now

in

Chennai).The

committee had the object of securing close contact


with the workers by discussions on matters relating to
their

work and welfare and proved useful in

maintaining sound relations between management


and workers.
Assing the performance of such committees,the Royal
Commission on Labour observed that some committees
have been successful and there are probably few that
have been disappointing.The reasons assigned by the
commission were lack of clarity with management and
trade unions and the illiteracy of the Indian workers.Hence
,the commission recommended the formation of the work
committees and viewed that if they are given proper
encouragement and past errors are avoided, these
committees are also stressed the settling up of a joint
machinery for the internal settlement of disputes on the
pattern

of

the

informal

consultative

machinery

of

Ahemdabad Textile Industry.

Developments during 1940s


With all these setbacks, joint consultation did not entirely
die out, but had receded to the background at the plant
level. The war-time developments, however, led the labor
management and government to come closer. Around the

same time the Indian Labor Conference was held to


promote closer ties between the two parties of the Indian
Labor Conference in August, 1942. The conference was
modeled on the pattern of the Indian Labor Conference
and was advisory in nature.
The National Planning Committee of the Indian National
Congress, as far back as 1940 had recommended the
nationalization of industries like engineering and heavy
explosives. Also the committee had suggested that both in
the interest of industry and community it was desirable to
associate

workers

progressively

with

control

and

management. The Indian Federation of Labor also


endorsed the policy of nationalization. Similar demands
were also raised by the All India Trade Union Congress.
After attaining Independence, India attempted to introduce
workers participation in management. One of the earliest
attempts to promote this was the enactment of the
Industrial Disputes Act, 1947 and the Factories Act, 1948,
for the establishment of bipartite committees. Another type
of scheme.

Works Committees (1947)


The Industrial Disputes Act,1947,provides for setting up of
the bipartite works committees as a scheme of workers
participation

in

management

which

consists

of

representatives of employees and employers.The Act


provides for these bodies in every undertaking employing
100 or more workmen .The aim of setting up of these
bodies

is

to

promote

measures

for

maintaining

harmonious relations in the work place and to sort out


differences of opinion in respect of matters of common
intrest to employer and employee .The Bombay Industrial
Disputes Act ,1946,also provides up for these bodies ,but
under the provisions of this act they can be set up only in
units which have a recognized union and they are called
Joint Committees .The workers directly elect their
representatives where there is union.

Functions
The works committees/joint committee are consultative
bodies.Their functions include discussion of conditions of
works like

Lightening
Ventilation
Temperature
Sanitation
Amenities like water supply for drinking purposes
Provision of canteens
Medical facilities
Safe working conditions
Administration of welfare funds
Educational &Recreational activities
Encouragement of thrift and savings
It shall be the duty of the works committees to promote
measures for securing and preserving amity and good
relations between the employers and employees and
to comment upon the matters of their matters of
concern and endaevour to reconcile any material
difference of opinion in respect of such matters.
Employee participation is nothing new. It is as old as
the institution of owners and workers but its important
has been increased and has been brought into sharp
into focus with the industrial revolution and the advent
of large enterprises.
In its broad sense participative management refers to the
constitution of consultative councils and comities comprising

representatives of employees and employers, to recommend


steps for improving productivity ,machine utilization, job
loading ;for effecting savings in power, light for identifying
lazy workers, safety, so on & so forth.
In

its

broad

sense,

employee

participation

means

associating representatives of the workers at every stage of


decision-making, as is done in former East Germany and
Yugoslavia. Participative management is considered as a
process by which the workers share in decision making
extends beyond the decisions that are implicit in the specific
contents of the jobs they do. This, in actual practice,
amounts to the workers having a share in the reaching of
final managerial decisions in an enterprise.
A clear and more comprehensive definition is:
Workers participation, may broadly, be taken to cover all
terms of association of workers and their representatives
with the decision-making process, ranging from exchange of
information, consultations, decisions and negotiations to
more institutionalized forms such as the presence of
workers member on management or supervisory boards or
even management by workers themselves as practiced in
Yugoslavia
Workers participation in management is synonymous with
co-determination- a term popularly used in the former East

Germany

to

describe

this

participation.

Participated

management is also called employee involvement.

SCOPE & WAYS OF PARTICIPATION

There are three ways of managerial decision which have a


direct impact on the worker of any industrial establishment.
They

are

social,

personal

and

economic

decisions.

Economic decisions include financial aspects- the methods


of manufacturing, automation, shut-down, lay-offs, mergers
and similar other functions. Personal decisions refer to
recruitment

and

selection,

promotions,

demolitions,

transfers, grievance settlement, work distribution, and so on.


Social decisions relate to hours of work, welfare measures,
questions affecting work rules and the conduct of individual
workers safety, health, sanitation and noise control. The
workers must have a say in the decisions on the issues
mentioned above.
But there is a difference of opinion about the scope and the
extent to which workers can participate in social, personnel
and economic decisions. In school of thought is of the
opinion that the workers or the trade unions should, on parity
basis, sit with the management as equal partners and make

joint managerial decisions on all matters. The other school


propounds the view that the workers should only be given an
opportunity, through their representatives, to influence
managerial decisions at various levels. The first view could
lead to the workers actual participation in the decisionmaking
process of the management, while the second aspect will
work out to be consultation of workers in managerial
decisions.

Participation at the Board level


The Board of Directors is the apex body in the administration
of a corporate establishment. A representation of workers on
the Board would, it is believed, usher in industrial
democracy, ensure improved employer-employee relations,
and

guarantee

better

productivity.

The

workers

representative on the Board can play a useful role in


safeguarding the interests of workers. He or she can prevail
upon the top management not to take measures that would
be unpopular with the employees. He or she can guide the
Board members on matters of investment in employee
benefit schemes like housing and so forth.

The Government of India took the initiative and introduced a


scheme for the appointment of workers representatives on
the Boards of Management of public sector undertakings. As
a result, the workers representatives were appointed to the
Boards of Hindustan Antibiotics, Pimri; Hindustan Organic
Chemicals,

Kolaba

Bangalore.

Workers

and

Hindustan

representatives

Machine
have

Tools,

also

been

appointed to the Boards of nationalized banks. In the private


sector, the Tatas, DCM, and some others have workers
directors on their Boards of Directors.
But the participation of workers at the top level management
is not without its problems.The Board of any enterprise is
primarily concerned with such problems as raising funds
,the utilization of the resourses of the company to
its advantage, and ensuring the capital growth of the
enterprise. Personnel matters (in which the workers
representatives are primarily interested),do not receive equal
attention at the board level .Besides most the decisions in
which workers are interested are normally taken at the lower
levels of the management.
In these circumstances, the appointment of workers
representatives to the board does not substantially enhance
the role of workers in the management of an industry.
Second,

communication

between

the

workers

representative and the workers suffers after the former


assumes directorship. His or her viewpoint and thinking are
no longer the same and he or she may, therefore, tend to
become alienated from the workers .And for this very reason
he or she may be less effective with the other members of
the board in dealing with employee matters. Caught between
alienation from the workers and unacceptability from the
board, the workers-director may not be able to play a
constructive role. Third, though the worker-director may
enjoy the status and privileges of the others members of the
board, his or her culture, education, behavior and manners
may make him or her feel inferior to the other member and
he or she may feel suffocated. In such surroundings his or
her role as a director may not be satisfying for the workers
and for the management. Fourth, the nomination of one or
two workers representative on the board of management
places them in a minority and the decision of the board are
arrived at on the basis of the majority vote.

Participation through ownership


Workers may become more and more involved in industries
by making them shareholders of the company. This may be
done by inducing them to buy equity shares. The
management may promote the scheme by allowing the
workers to make payments in installments. It may also
advance loans or even gives financial assistance to such
workers to enable them to buy equity shares.
Instances of workers holding shares in their companies are
many. Sixty-one percent of shares of Otto India, Calcutta are
held by its employees .forty percent of the shares of Sehgal
Sanitary Fittings near Jullundur, have been allotted to
workers. A similar experiment has also been made in the
Rajasthan spinning and weaving mills. Recently another
private firm in Rourkela manufacturing heavy machine has
introduce a scheme knows as employees share participation
loan scheme. Hughes Software system too has a stock
option scheme for its employees, called the Phantom Stock
Auction Scheme. The method involves offering shares to its
employees. Every year, the shares are revalued and prices

are announced. Employees are given an option to redeem


their shares at quoted prices.
Participation through ownership has the distinct advantage
of making the worker committed to the job and to the
organization but its effect on participation is limited because
the ownership is different from management in the company
form of ownership.

Participation Through Complete Control


Workers acquire complete control of the management
through elect boards. The system of self management
through Yugoslavia is based on this concept. It gives
complete control to workers to manage directly all aspects of
the industries through their representatives.
The system of complete control insures the identification of
the workers with their organization. Industrial disputes
disappear when workers develop loyalty to the organization.
Trade unions welcome this type of participation. But
complete control by workers is not an answer to the problem
of participation because the workers dont evince interest in
management decision.

Participation Through Staff or Work Council


Staff councils or work councils are bodies on which the
representation is entirely of the employees. Their may be
one council for the entire organization or a hierarchy of work
councils, from the shop-floor to the Board level .The
members of the councils are selected by the employees of
the respective sections .
The Councils have different functions in the management of
an enterprise, ranging from eliciting information on the
managements intentions to a full share in decision making.
They are a right step in the direction of industrial democracy.
But they are not successful because of the fear expressed
by trade union leaders that, being mainly workers bodies;
staff councils may erode their power and prestige.

Participation

through

joint

Councils

and

Committees
Joint councils are bodies comprising representatives of
the employers and employees. The functions of these
bodies may range from decision-making on some issues,
to merely advising the management as consultative
bodies.
Being mostly consultative bodies ,the joint councils
indicate a loose type of participation

because their

suggestions are not binding on the management. These


councils serve no useful purpose .They only provide a
platform to employers and employees from which they
may give free vent to their complaints and grievances
without making any attempt to find remedies and
solutions.
Works committees have been constituted in industrial
establishments employing 100 or more workers, and
these

comprise

representatives

of

employers

and

employees .The constitution of a work committee is a

legal requirement under the provisions of the Industrial


Disputes act, 1947. The committees discuss a wide range
of topics connected with the workers welfare. Certain
voluntary committees, like the welfare committees, the
safety

committees,

the

canteen

committees

,the

incentives committee, have also been constituted in most


manufacturing establishments. There is no need for so
many

committees

effectiveness

of

and
their

sub
role

committees
in

promoting

,and

the

industrial

democracy,increased productivity and reduced labour


unrest is doubtful.The opinion of most of the managers
about the committees is that they have only a nuisance
value.

Participation through collective bargaining

The principle of collective bargaining confers on the


management and the workers the right, through collective
agreement , to lay down certain rules for formulation and
termination of the contract of employment, as well as the
condition of service is an establishment .such agreement
are normally binding on parties and have a force of law
.Collective Bargaining

can really work well if the

bargaining parties, namely ,the employers and the


workers representatives , make use of the opportunity of
the bargaining in the right spirit and for a positive
purpose. But, in practice, whenever the parties get
together for the purpose of bargaining, each tries to take
advantage of other, often using strikes and lockouts and
other strong arm tactics. Collective bargaining is no
substitute for workers participation in management.
Participation brings both the parties together and
develops appropriate mutual understanding, and bring
about a mature and responsible relationship. Collective
Bargaining , on the contary ,is based on the crude

concept of power and its exercise for sectional bargaining


which may end up in mistrust, withholding of information
and use of power tactics.
Participation through Job Enlargement and Job
Enrichment
Job enlargement means expanding the job content- adding
task elements horizontally. Job enrichment means that
additional motivators are added to the job so that it is more
rewarding. The purpose of job enlargement and job
enrichment is to relieve the boredom of the workers which
flows from excessive specialization in mass-production
industries so that the job itself may be a source of self
satisfaction. Job enlargement and Job enrichment do
provide for workers participation because they offer freedom
and scope to them to them to use their judgment.
However, this form of participation provides only limited
freedom to a worker concerning the method of performing
his/her job. It will not give him or her any say in some of the
vital question he or she may be interested in, such as job
and income security, welfare schemes and other policy
decisions of the company which affect him/her directly.

Participation through suggestion schemes


Employees views on such matters as machine utilization,
waste

management

energy

conservation

and

safety

measures are invited, and reward is given for the best


suggestion .This procedure enables the management to
arouse and maintain the employees interests in the
problems of their concern and its management.
The

suggestion

schemes

are

increasingly

used

by

progressive management MICO, Bangalore, for instance,


has the schemes in operation for past three decades .The
suggestions flow from various levels, through mainly from
the operators. The ideas range from changes in inspection
procedures to design changes, process simplification, paperwork reduction, and the like. The company receives a few
hundred suggestions every year. Of those accepted, the
benefit to the company could range from marginal to
substantial.

The

commensurate
suggestions.

rewards

with

the

to

the

benefits

employees

derived

from

are
the

Participation through Quality Circles


A quality circle (QC) consists of seven to ten people from the
same work area who met regularly to define, analyse, and
solve quality and related problems in their area. Membership
is strictly voluntary, and meetings are usually held once a
week, for an hour .During the groups initial meetings,
members

are

trained

in

problem-solving

techniques

borrowed from group Dynamics, industrial engineering and


quality control. These techniques include brainstorming,
Pareto analysis, cause and effect analysis, histograms,
control charts, stratification and scatter diagrams.
Quality circles are credited with producing quick, concrete
and impressive results when correctly implemented. Their
advantages include the following;
1. Employees are involved in decision making. This
privilege makes them acquire communication and
analytical skills and improve the efficiency at the
workplace .
2. Saving-to-the costs ratios generally are highly are
higher than those achieved with other productivityimprovement programmes.

3. Because the programme is voluntary, employees and


unions generally do not view them as another

cost-

control effort.
4. Circles members enhance their chances of promotion
to supervisory positions.
Started first in Japan in their early 1960s,QCs have spread
all over the world .In our country too, they are being
introduced in several companies .BHEL and BEL are only
two names which come to ones memory.SKF,Mahindra and
Mahindra ,Alfa Laval and Godrejand Boycee are other
names which have tried QCs.

Empowered Teams

Wise leaders know that power is an unusual kind of


currency. The more you give it away, the more you end up
having.
Help leaders understand this essential concept with the new
edition of the Empowerment Profile - an in-depth instrument
that provides leaders with a measurement of the degree to
which they perceive themselves to have power at work.
Participants create two profiles: one based on their
assessment of their own empowerment, the second profile
based on scores compiled from the leader's employees'
assessments of their own empowerment. The 40-item
assessment measures perceptions of empowerment along 8
dimensions, including autonomy, climate, control, and
influence. Together, the two charts provide a complete look
at empowerment in the leader's work environment.
The Leader Version includes the leader's self-assessment
and the profiles. Background information and an action
planning section help leaders understand how to empower

themselves and their employees. The Employee Version


contains only the employee's self-assessment. It is designed
to provide leaders with data on how empowered their
employees actually feel.
Empowering refers to passing on authority and responsibility
empowerment occurs when power goes to employee who
then experiences a sense of ownership and control over
their jobs.
Empowered individuals know that their jobs belong to them.
Given a say on how many things are done, employees feel
responsible, when they feel more responsible they show
more initiative in their work, get more done, and enjoy work
more.
Empowerment is facilitated by the combination of factors,
including value, leadership actions, Job structure, and
reward systems.
Self directed teams (another name for empowered teams)
have the following distinct features;
They are empowered to share various management
and leadership functions
They plan, control and improve their own work
process.
They set their own goals and inspect their own work.

They often create their own schedules and review their


performance as a group.
They may prepare their own budgets and co-ordinate
their work with other department
They usually order materials, keep inventories and
deal with suppliers.
They are frequently responsible for acquiring any new
training they might need.
They may hire their own replacement or assume
responsibility for disciplining their own members.
They, and

not

others

outside

the

team,

take

responsibility for the quality of their products or


services.
Empowered is catching on among Indian managers.
Companies

as

diverse

as

Titan,Reliance,ABB,Tata

Information system(TISL).GE Plastics India and Philips are


empowering employees both

frontline, as well as

production staff. Wipro Corporation has 29 such teams and


their numbers is expected to go upto 130.Wipro InfoTech, on
the other hand, has 10 such teams and the plan is to hike

them around 45 to 50.At Reliance, divisional heads run their


divisions like managing directors run their companies.

Total Quality Management


Total Quality Management (TQM) refers to the deep
commitment of an organization to quality. Quality of the
products and service is an obsession, and every step in the
companys processes is subjected to intense and regular
scrutiny for ways to improve it. Almost every issue is subject
to exploration and the process is a continuing one.
Employees are provided with extensive training in problemsolving, group-decision-making and statistical methods.
TQM replaces traditional beliefs about quality with a new set
of principles. Traditional beliefs which are discarded include,
High quality costs more
Defects cannot be eliminated completely.
Quality can be improved by inspection
Quality is the job of the quality control personnel.
The new principles of TQM are:
Meet the customers requirement on time, the first
time, and 100 % of the time.

Strive to do error free work


Manage by prevention not by correction.
Measure the cost of quality.

TQM is classified as a participative method because every


employee in the organization is involved and is expected to
take responsibility for improving quality every day. It is the
formal program which involves direct participation by all
employees.
It is obvious from the foregoing discussion that the method of
employees participation are various. They vary time to time,
country to country and plant to plant within a country. The
introduction of the particular method of participation depends
on the government of the land, the willingness and change of
heart on the part of the employer to share his or her power
with his or her employee, and the prepared ness of the
employees to except the share of power offered to them
without suspicion or mistrust.

Financial Participation
Financial Participation differs from other forms of
employee involvement in that it is less likely to involve
employees in consultational or decisional process. The
general purpose of employee participation is to enhance
employee commitment to the organization by linking the
performance of the firm to that of the employees. Thus, it
is argue that the employees is more likely to be positively
motivated and involved if he or she has the financial stake
in the company by having the share of profit or by being a
share-holder.
There are many scheme of financial participation, but the
more prominent of them are the profit linked pay, profit
sharing and employee stock option scheme. Workers
cooperatives

managements

buyouts,

participation and wage earner funds.

pension

fund

Pre-requisites for Successful Participation


To make any of the participative method successful the
following conditions have to be fulfilled.
The participants, namely, the management and the
operative,

must

have

clearly

defined

and

complementary objectives and the objective of one


party should not work as cross purpose with the
objective of the other party.
Their must be a free flow of information and
communication between the management and the
worker. In this way distress and suspicion are
avoided and the worker become responsible and
mature when they discuss their demands with the
management.
The representative of the worker must be drawn
from the workers themselves. The participation of
the

outside

trade

union

leaders

should

be

discouraged. This is necessary because the


problem and difficulty of the worker are better
understood by the workers themselves than by
others. The workers therefore then put across their
point of view to the management of confidence.
Strong and effective trade unionism is necessary
for the success of participative management.
Politicalisation and multiplicity of trade union defeat
the purpose of participation and management.
Workers education and training make a significant
contribution

to

the

purposive

working

of

participative management. Trade union and the


government can play a major and meaningful role
in organizing in conducting training program.
Neither party should feel that its position is
threatened by participation. If workers think that
their status will be adversely affected, they will not
participate. If managers feel that their authority is
threatened, they will refuse participation all will be
on the defensive.
Consultative bodies, collective bargaining and
suggestion
participative

schemes

make

management.

To

mockery
make

of

workers

participation meaningful and purposeful, worker


should be associated at all levels of decision
making.

The success of participation depends on the


suitable participative structure and a change of
heart on the part of the employers and employees,
which may take a long time to develop, to expedite
this development some sort of legislative action is
necessary.
There could be the danger of the major potion of
the resources of the enterprise being diverted to the
worker without much consideration for further
investments. It may be desirable to reserve a
certain

percentage

of

the

resources

for

reinvestment either through mutual agreement or


legislation.
The financial cost of participation should not
exceed the value economic and otherwise that
come from it. Employees cannot spend all their
time in participation to the exclusion of all other
work.

Importance of participation
The greatest benefit of participative management is that the
employee identifies himself or herself with the work and this
leads

to

an

improved

performance.

The

employee

psychological result is participation which, in turn, leads to

an improved performance, manifesting itself in an increased


output and an improved quality.
Participation

tends

to

improve

motivation

because

employees feel more accepted in the situation. Their selfesteem,

job

satisfaction,

and

cooperation

with

the

management with the management will also improve. The


results often are reduced conflict and stress, more
communication to goals, and better acceptance of a change.
Employees may also reduce turnover and absences when
they begin to feel that working conditions are satisfactory
and that they are becoming more successful in their jobs.
Finally, the act of participation in itself establishes better
communication, as people mutually discuss work problems.
The management tends to provide workers with increased
information about the organizations finances and operations,
and this helps employees to give better quality suggestions.
Whatever may be the objective, the form or the level of
participation, there is hardly a study in the entire work
literature which fails to demonstrate that satisfaction in work
is enhanced, or that generally acknowledged beneficial
consequences accrue from a genuine increase in the
workers decision-making powers. It is not take greater pride
and pleasure in their work if they are allowed participatory
freedom in shaping the polices and decisions which affect
their work.

Limitations of participation

Participative management suffers from many limitations.


These are:
Technology and organizations today are so complex
that specialized work-roles are required, making it
difficult for people to participate successfully if they go
very far beyond their particular environment. This
means

that

low-level

workers

can

participate

successfully in operating matters, but they usually


have difficulty in participating in policy matters.
Another issue is an employees right-not to participate.
There is no evidence that participation is good for
everybody. Many people do not want to be bothered
with participation.

Another problem is that participative situations can be


used

covertly

manipulation

is

to

manipulate

not

employees.

necessarily

done

by

This
the

management. It may be by the union or by undercover


cliques led by members skilled in group dynamics-the
social engineers of consent.

The feudalistic concept of the master and servant is


still prevalent among industrial workers, especially in
India. Workers have an innate feeling that they are
born

to

serve

and

not

to

rule.

Participative

management, naturally, is of little interest to such


workers.
The role of trade unions in promoting participative
management is far from satisfactory. Most of the
unions indulge in politicking and have little time to think
about participation. The attitude of individual members,
too, is not conductive to the promotion of participative
management. The motive for joining a trade union is
explicitly more individualistic, that is, the membership
is regarded as a kind of insurance against calamities,
in the event of dismissals, accidents or other
difficulties, when the members could expect some help
from trade unions. The result is that the workers

perceive a trade unions role as crisis-oriented and not


as extending beyond certain individual problems.
Naturally, workers do not expect their unions to play a
major role in participation.
The unwillingness of the employers to share power
with the workers representatives, the disinterest of the
workers,

and

the

perfunctory

attitude

of

the

government towards participation act as stumbling


blocks in the way of promotion of participative
management.

RESEARCH
METHODOLOGY

RESEARCH METHODOLOGY

Research means finding out the facts relating to particular


phenomenon. Research is an academic activity and as such
the term should be used in technical sense. According to
Clifford woody-Research comprises defining and redefining
problems, formulating hypothesis or suggested solutions:
collecting,

organizing,

and

evaluating

data:

making

deductions and researching conclusions: and last carefully


testing the conclusion to determine whether they fit the
formulating hypothesis. Social Science defines research as
the manipulation of things, concepts symbols for the
purpose of generating the text, correct or verify the
knowledge making, whether that knowledge aids and
construction of theory or in the practice of an art.

Research is, thus, an original contribution to the existing


stock of knowledge making for its advancement. It is the
pursuit of truth with the help of steady observations,
comparisons, and experiment. In short the search for
knowledge, though objective and systematic method of
finding solutions to a problem is called Research. As such
the term research refers to the systematic method
committing

of

enunciate

the

problem,

formulating

hypothesis collecting the facts or data, analyzing the facts


and reaching certain conclusions either in the form of
solutions towards the concerned problem or in certain
generalization for some theoretical formulation.
In this project, I have used qualitative type of research and
the

method

adopted

was

observation

method

and

unstructured interview.
Qualitative

research

is

concerned

with

qualitative

phenomenon that is phenomenon relating to or involving


quality or kind. When we are interested in investigating the
reasons for human behavior (that is why people think or do
certain things) we quite often talk of Motivation Research
and important type of qualitative research .This type of
research aims at
discovering the underlying motives and desires using in
department interviews for the purpose. Attitude or opinion

research i.e., research design to find out how people feel or


what they think about a particular subject or institution is also
a qualitative research.
COLLECTION OF DATA
For this report, all the information used already existed in the
organization which is updated according to the changes in
the trends. Thus the data used was secondary data. This
data was in records of published form. This published data
includes old policies and forms and history records. The
source of data for analyses was majorly based upon web
sites which are also referred in this context.

COMPANY PROFILE

Tata Group profile


The Tata Group comprises 93 operating companies in seven
business sectors: information systems and communications;
engineering;

materials;

services;

energy;

consumer

products; and chemicals. The Group was founded by


Jamshedji Tata in the mid 19th century, a period when India
had just set out on the road to gaining independence from
British rule. Consequently, Jamsetji Tata and those who
followed him aligned business opportunities with the
objective

of

nation

building.

This

approach

remains

enshrined in the Group's ethos to this day.


The Tata Group is one of India's largest and most respected
business conglomerates, with revenues in 2004-05 of $17.8
billion (Rs 799,118 million), the equivalent of about 2.8 per
cent

of

the

country's

GDP.

Tata companies together employ some 215,000 people. The


Group's 32 publicly listed enterprises among them
standout names such as Tata Steel, Tata Consultancy
Services, Tata Motors and Tata Tea have a combined

market capitalisation that is the highest among Indian


business houses in the private sector, and a shareholder
base of over 2 million. The Tata Group has operations in
more than 40 countries across six continents, and its
companies export products and services to 140 nations.
companies offer a wide variety of outstanding products and
services that enhance and enrich the lives and homes of
consumers in India and a host of other countries around the
world. These products and services have been arranged in
alphabetical order here, with links leading to specific pages
that highlight individual products and services.
Agricultural inputs
Agrochemicals (Rallis)
Fertilisers (Tata Chemicals)
Automotive components (TACO)
Automotive services (TACO, Tata Technologies)
Commercial vehicles (Tata Motors)
Diesel engines (Tata Cummins)
Chemicals
Chemicals (Tata Chemicals, Rallis)
De-sulphurising compounds (Jamipol)
Communications
Broadband services (Tata Indicom)

Telecommunications (Tata Indicom)


Consultancy
Management consultancy (Tata Economic Consultancy
Services, Tata Strategic Management Group)
Cement (Tata Chemicals)
Dolomite Refractories (Tata Refractories)
Pig iron (Tata Metaliks)
Pigments (Tata Pigments)
Renewable wood (Tata Conswood)
Roll manufacture and supply (Tayo Rolls)
Sponge iron (Tata Sponge Iron)
Steel (Tata Steel)
Steel processing and distribution (Tata Ryerson)
Tinplate (Tinplate Company of India)
Tubes (Tata Steel)
Publishing
E-learning (Tata Interactive)
Publishing (Tata McGraw-Hill)
Trading
E-trading (metaljunction services)
Trading (Tata International, Tata AG, Tata Incorporated,
Tata Limited)

Promoter companies
Tata Sons
Subsidiaries / divisions:
Tata
Economic
Consultancy Services
Tata Financial Services
Tata Quality Management
Services
TCE Consulting Engineers
THDC
Tata Petrodyne
SerWizSol

Global operations
Tata AG
Tata Enterprises AG
Tata Incorporated
Tata International
Tata International AG
Tata Limited
Tata Precision Industries
Tata Tea Inc
TATA SERVICES

Tata Industries
Divisions:
Tata Interactive Systems
Tata
Strategic
Management Group

Profile
Tata Services was incorporated in the year 1957 to provide
Tata companies certain centralised services and to reap the
benefits of economies of scale, on a no-profit no-loss basis.
Over the years, several new departments and specialised functions
were added. The main divisions / departments of Tata Services are
AUTOMOTIVE
Tata AutoComp Systems
Subsidiaries / associates / joint ventures: Automotive
Composite Systems International, Automotive Stampings
and Assemblies, JBM Sungwoo, Knorr-Bremse Systems for
Commercial Vehicles, TACO Faurecia Design Center, TACO
MobiApps Telematics, Tata AutoPlastic Systems, Tata
Ficosa, Tata Johnson Controls, Tata Nifco Fasteners, Tata
Toyo Radiator, Tata Yazaki AutoComp, Tata Yutaka, TC
Springs
Tata Motors
Subsidiaries / associates / joint ventures: Concorde
Motors, HV Axels, HV Transmissions, Nita Company, TAL
Manufacturing Solutions, Tata Cummins, Tata Daewoo
Commercial Vehicles Company, Tata Engineering Services,
Tata Finance, Tata Holset, Tata Precision Industries, Tata
Technologies, Telco Construction Equipment Company
ENGINEERING SERVICES
Tata Projects
TCE Consulting Engineers

Voltas
ENGINEERING PRODUCTS
TAL Manufacturing Solutions
Telco Construction Equipment Company
TRF

COMPOSITES
Tata Advanced Materials
METALS
Tata Steel
Subsidiaries / associates / joint ventures: Jamshedpur
Injection

Powder

(Jamipol),

Lanka

Special

Steel,

metaljunction services, NatSteel, Sila Eastern Company, Tata


Metaliks, Tata Pigments, Tata Ryerson, Tata Sponge Iron,
Tata Refractories, Tayo Rolls, The Indian Steel and Wire
Products, The Tinplate Company of India, TM International
Logistics, Wires Division

POWER
Tata BP Solar India
Tata Power
Subsidiaries / associates / joint ventures: Tata Ceramics,
Tata Power Trading, North Delhi Power Limited

HOTELS AND REALTY


Indian Hotels (Taj group)
Subsidiaries / associates / joint ventures: Taj Air
THDC
FINANCIAL SERVICES
Tata-AIG General Insurance
Tata-AIG Life Insurance
Tata Asset Management
Tata Financial Services
Tata Investment Corporation
Tata Share Registry
OTHER SERVICES
Tata Economic Consultancy Services
Tata Quality Management Services
Tata Services
Tata Strategic Management Group
INFORMATION SYSTEMS
Nelito Systems
Tata Consultancy Services
Subsidiaries / associates / joint ventures: APONLINE,
Airline Financial Support Services, Aviation Software
Development Consultancy, CMC, CMC Americas Inc,
Conscripti, HOTV, Tata America International Corporation,
TCS Business Transformation Solutions, WTI Advanced
Technology
Tata Elxsi
SerWizSol
Tata Interactive Systems
Tata Technologies
COMMUNICATIONS
Idea Cellular
Tata Teleservices

Subsidiaries

associates

joint

ventures:

Tata

Teleservices (Maharashtra), Tata Internet Services


VSNL
Tatanet
INDUSTRIAL AUTOMATION
Nelco
Subsidiaries / associates / joint ventures: Tatanet
This section lists all these companies under the sectors in
which they operate, besides the two promoter companies of
the Group. Visitors can, by clicking on the relevant links, get
a profile of individual companies, their subsidiaries (if any),
their products and services, contact details, etc.
At the Tata Group our purpose is to improve the quality of life
of the communities we serve. We do this through leadership
in sectors of national economic significance, to which the
Group brings a unique set of capabilities. This requires us to
grow aggressively in focused areas of business.
Our heritage of returning to society what we earn evokes
trust among consumers, employees, shareholders and the
community. This heritage is being continuously enriched by
the formalisation of the high standards of behaviour
expected from employees and companies.
The Tata name is a unique asset representing leadership
with trust. Leveraging this asset to enhance Group synergy
and becoming globally competitive is the route to sustained
growth and long-term success.

FIVE CORE VALUES


The Tata Group has always sought to be a value-driven
organisation. These values continue to direct the Group's
growth

and

businesses.

The

five

core Tata

values

underpinning the way we do business are:


Integrity: We must conduct our business fairly, with honesty
and transparency. Everything we do must stand the test of
public scrutiny.
Understanding:

We must be caring, show respect,

compassion and humanity for our colleagues and customers


around the world, and always work for the benefit of the
communities we serve.
Excellence: We must constantly strive to achieve the
highest possible standards in our day-to-day work and in the
quality of the goods and services we provide.
Unity: We must work cohesively with our colleagues across
the Group and with our customers and partners around the
world, building strong relationships based on tolerance,
understanding and mutual cooperation.

Responsibility: We must continue to be responsible,


sensitive to the countries, communities and environments in
which we work, always ensuring that what comes from the
people goes back to the people many times over.
Department of economics and statistics

This department provides Tata companies with data on the


economy and their impact on various sectors, both at the
macro and micro levels. It furnishes Tata companies with
background material on a variety of subjects with a view to
facilitating decision-making; compiles an integrated statistical
picture of the Tata organisation; and keeps key Tata
personnel updated on important economic indicators through
the electronic messaging systems.

Corporate affairs department

The corporate affairs department is responsible for the


management of the Tata brand, the corporate identity
implementation programme, the external interface with
media and the financial community, and for internal
communication. The department also manages the group
website (www.tata.com) and all online communication within
and outside the group. It produces the house magazines

Tata Sphere and Tata Review for internal and external


audiences.

Public affairs department

Tata Services Delhi liaises with various government and


non-government agencies in New Delhi on behalf of various
Tata companies. It keeps track of developments in the
capital, changes in government policies and perceptions,
and helps Group companies with required registrations, etc.

Tata Management Training Centre

The Tata Management Training Centre trains and develops


managerial talent in the Tata Group of companies and in
other

organisations.

It

conducts

over

40

scheduled

programmes a year in areas of basic and specialised


management for middle and senior executives. The centre is
developing into a major institution for management studies
with a strong faculty and an expanding network of links with
other national and international institutions.

TAS

TAS is the group's human resource department for the entrylevel cadre of management trainees, drawn annually from
the best business schools in the country. This group
resource, around 120 strong today, is allocated to over forty
companies and is a binding force for the vast
and diversified Tata Group.
Tata Council for Community Initiatives

TCCI

coordinates

and

organises

programmes

to

institutionalise community development activities within the


Group.
Legal department

The legal department advises, counsels and assists Tata


companies on corporate legal matters. It mainly handles
corporate matters relating to the Companies Act, 1956, laws
relating to the Securities and Exchange Board of India,
environmental laws, the MRTP Act, FEMA, intellectual
property rights and copyright law. The department is also

associated with the drafting of notices for annual general


meetings,

extraordinary

general

meeting

notices

and

documents connected to them.

Labour relations bureau

The labour relations bureau deals with labour and industrial


relations matters pertaining to all Tata companies. It
functions in an advisory capacity and guides the companies
in handling difficult labour situations. Apart from day-to-day
advice on such matters, the LRB appears on behalf of the
companies in various labour and industrial courts. It keeps
group companies abreast of the latest developments in the
labour field by issuing circulars and newsletters.

Networking department

The networking department is responsible for the e-mail and


internet browsing facility at group headquarters Bombay
House and Tata companies connected to it. Connectivity to
the Tata Services Messaging Server has been enhanced by
incorporating the dial-in facility and providing internet
access.

Tata VSAT net

This covers over 40 Tata companies having a large number


of operational VSATs, the majority being used by Tata Motors
and Tata Steel. The VSAT networks are operated and
maintained

by

Nelco.

This

forms

the

backbone

of

communications at remote locations.

The Tata Central Archives

A repository of important documents, correspondence,


photographs, awards, trophies, medals, cititions, paintings,
video and audio clips and other material relating to the
genesis and development of the Tata Group.

General services
The company provides medical services and runs other
services such as the Bombay House canteen, retail stores,
the Andheri Housing Colony in Mumbai, holiday homes, and
the Tata Sports Club, for the benefit of various Tata
companies.

TATA FAMILY

Tata

shares

set

of

five

core

values:

integrity,

understanding, excellence, unity and responsibility. These


values, which have been part of the Group's beliefs and
convictions from its earliest days, continue to guide and drive
the business decisions of Tata companies. The Group and its
enterprises have been steadfast and distinctive in their
adherence to business ethics and their commitment to
corporate social responsibility. This is a legacy that has
earned the Group the trust of many millions of stakeholders
in a measure few business houses anywhere in the world
can match.
Profile
Tata Steel is India's largest integrated private sector steel
company. Established in 1907, its steel plant at Jamshedpur
produces four million tonnes of hot and cold rolled flat and
long products.
The company is backward integrated with owned iron ore
mines and collieries. With its competitive advantage in raw
materials, efficient operations and the benefits of a recentlycompleted $2.3 billion programme of modernizations, Tata

Steel is among the lowest cost steel producers in the world.


The steel major has won the Prime Minister's Trophy four
times. This award is instituted by the Indian ministry of steel
and awarded to the country's best integrated steel plant. In
2000, it became the first Tata company to win the JRD Tata
QV award, given to the company with 'world class'
operations under the Group's
Areas of business
Apart from the main steel division, Tata Steel's operations
are grouped under strategic profit centres like tubes, growth
shop (for its steel plant and material handling equipment),
bearings, ferro alloys and minerals, rings, agrico and wires.
Tata Steel's products include hot and cold rolled coils and
sheets, tubes, wire rods, construction bars, structurals,
forging quality steel, rings and bearings. In an attempt to
'decommoditise' steel, the company has recently introduced
brands like Tata Steelium (India's first branded cold rolled
steel), Tata Shaktee (galvanised corrugated sheets), Tata
Tiscon (re-rolled bars), Tata pipes, Tata bearings, Tata Wiron
(galvanised wire products) and Tata Agrico (hand tools and
implements).
Tata Steel is also exploring opportunities in the ferro-chrome
and titanium businesses.

JOINT VENTURES, ASSOCIATES & SUBSIDIARIES


Tata Steel has numerous joint ventures and subsidiaries.
Among them are:

Tinplate Company of India

Tayo Rolls

Tata Ryerson

Tata Refactories

Tata Sponge Iron

Tata Metaliks

Tata Pigments

Jamshedpur Injection Powder (Jamipol)

TM International Logistics

metaljunction services

TRF

Jamshedpur Utility and Service Company (JUSCO)

The Indian Steel and Wire Products(ISWP)

Lanka Special Steel

Sila Eastern Company

Environment management

Jamshedpur was India's first planned industrial township. In


more recent times, Tata Steel has received ISO 14000

certification for environment management for most of its


works, plants, mines and collieries.

Corporate social responsibility

Tata Steel is one of the few Indian companies to be invited to


join the UN-sponsored Global Compact. It has also been
conferred the prestigious Global Business Coalition Award
(GBC) for Business Excellence in the Community in view of
its outstanding work in the field of HIV / AIDS awareness.
Awards

The Betz Dearborn Environment Partnership Award.

The CII-Exim Award for Business Excellence, 2000.

The JRD QV Award, 2000.

The Outstanding Corporate Citizen Award from The


Economic Times.

The Tata Steel Rural Development Society has won


the Federation of Indian Chambers of Commerce and
Industry award for Rural Initiatives three times.

The

company

has

won

the

National

Energy

Conservation Award for three consecutive years from


the ministry of power, government of India.

TRF

Profile
The combined competencies of three companies, the
erstwhile Tata Robins Fraser (established in 1962), Tata
Material Handling Systems (formerly Tata Man. Ghh.,
established in 1978), and Tata Technodyne (established in
1996), helped create TRF. The company is regarded as one
of

the

most

comprehensive

sources

of

engineering

equipment, systems and services. It manufactures bulk


material handling and processing equipment, bulk material
handling systems, coke oven equipment, coal dust injection
systems for blast furnaces, coal beneficiation systems, and
port and yard equipment. EPC and EPCM services are also
provided. The company caters to diverse industries including
power, metallurgy, chemical, mining and cement.
Areas of business

The company offers a wide range of products and services.


Bulk material handling equipment:
TRF manufactures conveyor components such as idlers,
pulleys, take ups, scrapers, belt trippers / shuttle conveyors,

blow feeders, apron feeders, vibrating/reciprocating feeders,


steep angle conveyors and portable conveyors. Its range of
yard equipment includes stackers, bucket wheel reclaimers,
and scraper and blending reclaimers. Wagon handling
equipment, such as wagon loaders, ship loaders and ship
unloaders, is also produced.
Bulk material processing equipment:
Vibrating screens including scalping screens, de-waterisers,
de-sliming

screens,

manufactured.

The

and

foundry

company

also

shake-outs
produces

are

crushing

equipment such as, cone crushers, double roll crushers,


hammer mills, impactors, jaw crushers, ring granulators,
rotary breakers and single roll crushers.
Bulk material handling systems:
Conveyor systems for use in plants, cross country conveyor
systems, underground conveyor systems, raw material
bedding and blending systems, and rapid loading systems
are manufactured.
Coke oven equipment:
The company produces stamping, charging and pushing
equipment, charging gas transfer systems, and equipment
for conventional top charge batteries, such as charging cars
and pushing cars.

Coal dust injection systems:


The company manufactures injection systems whereby
pulverised and dried coal is conveyed in dense flow mode
and

injected

through

blast

furnaces

for

improved

performance and reduced coke consumption.


Coal beneficiation systems:
Coal beneficiation systems that use the dense media
cyclone- cum-floatation process and jig system process are
produced. Deshaling is done using barrel washer systems.
Port and yard equipment:
The company manufactures slewing cranes, grab ship and
barge unloaders, ship and barge loaders and stacker
reclaimers. It also makes special purpose EOT cranes for
steel mills.
EPC and EPCM services:
TRF offers support services for infrastructure, power
generation, ferrous and non-ferrous metals, and coal
washeries.
Technology associates:
The company has several collaborators and technology
associates. These include SAARTECH, Germany, for

stamping, charging, pushing equipment, charging gas and


transfer cars; Techint Italimpianti,
Italy, for yard and port equipment manufacture; BMH,
Germany, for coal dust injection systems; Schalke, Germany,
for coke oven machinery; Hatch Associates, Australia, for
high capacity conveying systems and coal washeries; Flour
Daniel India and LTA Process Engineering.
Locations
The companys headquarters and factory are located at
Jamshedpur, with offices in Hyderabad, Mumbai, New Delhi
and Nagpur

A SAGA OF VISION,COMMITMENT& FORTITUDE

As much an institution as it is a business conglomerate, the


Tata Group is unique in more ways than one. Established by
Jamsetji Tata in the second half of the 19th century, the
Group has grown into one of India's biggest and most
respected business organisations, thanks in no small part to
its entrepreneurial vision, its commitment to ideals that put
people before profits, and its fortitude in the face of adversity.

A radical human resource programme aims to add steel to


the people who have made Tata Steel the global leader in
the industry. K. A. Anantharam tracks a heavy metal 'change
initiative' that is more than the sum of its parts
Being the best is just not good enough for some companies.
Take Tata Steel. Recently rated the worlds top steel
enterprise in a survey of the global steel industry, the
flagship company of the Tata Group would have been
forgiven for resting on its laurels for a while. Instead, it has
embarked on a restructuring programme aimed at making it
better still.
The urge to reinvent itself constantly has paid handsome
dividends for Tata Steel. It has carried the company from the
quagmire of stodginess and sloth to the promised land of
profitability and unprecedented success. The latest round of
restructuring, based on a performance ethic plan (PEP)
recommended by management consultants McKinsey &
Company, is one more way in which Tata Steel is working to
improve itself.
Reaching such heights has not been easy. It required major
surgery, an extraordinary doctor and the contribution of each
and every employee to rejuvenate the 95-year-old institution.
The master surgeon was Dr J. J. Irani, who, having led Tata
Steel out of the woods, stepped down as managing director

on July 22 after more than a decade at the helm of the


company.
The story of how Tata Steel turned the tide and then topped
that by winning a host of awards for business excellence is a
case study by itself. As B. Muthuraman, who took over as
managing director on Dr Iranis retirement, says, "The credit
for sowing the seeds of the change process goes to Dr Irani,
but I am also proud that the entire organisation backed this
process to make things happen."
The quest for excellence began back in the late 1980s. Dr
Irani visited Japan as part of a Confederation of Indian
Industries (CII) delegation and was more than impressed by
the standards being set by Japanese companies. On his
return, he made it a personal mission to transform Tata
Steel. The small ripple he created with his quality movement
in the company soon ushered in a flood of changemanagement processes.
Says Sanjay Singh, chief of corporate communications: "The
only thing constant in Tata Steel is change, and this is allpervasive." He should know. Mr Singh is at the centre of a
huge internal campaign that Tata Steel has mounted to push
the

change

message

across

the

organisation.

His

department has worked ceaselessly to communicate the


managements message through the length and breadth of
the company. Stickers, posters, video films, face-to-face

dialogues and more, all with Dr Irani as the point man, made
it possible for Tata Steel to introduce the most far-reaching
changes in its history.
"The quest for excellence has not been limited to between 9
am and 5 pm," says Mr Singh. "The company has sought to
extend it to all spheres of the employees life: excellence in
their own achievements and excellence in the lives of their
children and spouses." Towards this end, the company
conducted, with Dr Iranis wife, Daisy, as the spearhead, a
clutch of programmes covered through the Domestic
Management Programme that embrace all aspects of the
lives of the employees children and spouses.
An open and transparent communication process has helped
Tata Steel painlessly reduce its workforce by a staggering
30,000 people. The ease with which the change programme
has been implemented is, according to Mr Muthuraman, a
result of the powerful vision projected by the management,
which was then shared across the company in a transparent
manner.
Making the process as humane as possible has also helped
minimise the distress that springs from any such separation.
Apart from a generous severance pay, the company offered
extensive outplacement services to ensure that retrenched
employees were gainfully employed elsewhere.

CASE
STUDY

Labour Management Cooperation in TISCO

By their supplement agreement of January 1956, the TATA


Iron & Steel Company Ltd.and

the TATA Workers Union

agreed to set up the following joint councils in oder to


provide for a closer association of employee with the
management .
a. Joint Departmental Councils
b. Joint Works councils for the plant as a whole
c. Joint Town Councils; and
d. Joint Consultative Council of Management at the Topmost level.
The company and the union agreed that the representatives
of employees these councils were in the first instances, to
be nominated by the union, but steps were to be taken,
gradually, to introduce the principle of by a secret ballot. The
representatives of the management were to be nominated by
the management.

a) Joint Department Councils :

The agreement provides for the setting up of a Joint


Department Council in each department of the works.
Such councils consist of two to ten representatives of
management and an equal number of representatives of
the works-employees, depending on the size of the
department. The representatives of the works-employees
are nominated by the union from among the employees of
the company. The functions of these councils are

as

follows:

To study operational results and current and


long-term departmental problems ; to advise on
steps necessary at the departmental level ; to
promote and rationalize production ; improve
productivity & discipline; eliminate waste; effect
economies with the view to lowering cost;
eliminating defective works and improve the
quality of the product ; improve the upkeep &
machinery,tools and instrument ;promote efficient
use of safety precaution and devices ; promote
employees welfare and activities like sports and
picnics; encourage suggestion; improve working
conditions
department.

and

better

functioning

of

the

To

implement

the

recommendations

and

decisions of the joint Consultative councils of


Management or the joint workers councils as
approved by the management
To refer any matter to joint works councils for
their consideration and advice.

b) Joint Works Council:


The agreement provides for the establishment of joint work
councils

consisting

of

twelve

representatives

of

the

management and an equal number of representatives of the


employees. The representatives of the employees are to be
nominated by the union from amongst the employees of the
company but exclusive of those covered by Joint Town
Councils except that one such representative may be an
officer of the union ,who is not the employee of the
company .The representatives of the management are to be
nominated by the management.
The function of the joint work councils are the following;
1. The same as those of the of joint departmental councils at
the level of work.
2. To plan and supervise the work of the following
committees with in the frame work of duly approved budgets
and company rules and procedures.
Central Canteen Managing committee;
Welfare Committee;
General Safety Committee;
Safety Appliances Committee;and
Suggestion Box Committee;

3. To follow up the implementation through the appropriate


Joint Departmental Council of its recommendations or
decision approved by the management.
4. To refer any matter to the Joint Consultative Council of the
Management for their consideration or advice;and
5. To advice on any matter referred to it by the Joint
Departmental Councils or by the joint consultative
council of Management.

c) Joint Town Council:


The Joint Town Council consists of equal number of
representatives of

management

and employees.

The

employees representatives are to be nominated by the


union from among the employees of the company in the
town ,medical health departmentals including the education
department,except that one of such representatives may be
the officer of the union who is not an employee

of the

company.
The functions of the Joint Town Council are as follows :
i.

To advice on steps neccasary to promote


,rationalize and improve out put and methods
of work,reduce costs,improve quality,effect
economies,reduce

waste

improved

conditions

working

and
and

ensure
better

functioning of the organization as a whole;


ii.

To advise on social welfare activities in the


town within the framework of duly approved
budgets and company rules and procedures;

iii.

To follow up the implementation of its


recommendations as decisions approved by
the management;

iv.

To refer any matter to Joint Consultative


Council

Of

Management

consideration and advice.

for

their

d) Joint Consultative Council Of Management:


The Joint Consultative Council of Management also consists
of representatives of management and employees in equal
number. The representatives of employees are to be
nominated by the union from amongst the employees of the
company except

that not more than two of such

representatives may be officers of the union,who are not the


employees of the company.
The

functions

of

the

Joint

Consultative

Council

of

Management are as follows:


i.

To advice management on all matters concerning


the working of the industry in the fields of the
production and welfare.

ii.

To advice management with regard to economic


and financial

matters placed by it before the

council, provided that the council may discuss


questions dealing with general economic and
financial matters concerning the company,which do
not deal with questions affecting the relations of the
company with shareholders or managerial staff or
concerning taxes or other matters of confidential
nature;
iii.

To consider and advise on any matter referred to it


by the Joint Works Council or the Joint Town
Council;and

iv.

To follow up the implementation through the Joint


Works Council or the Joint Town Councils of any
recommendations made by it and approved by the
company.

Objectives of Joint Management Councils


o To increase the association of employers and
employee there by promoting cordial industrial
relations
o To improve the operational efficiency of the
workers
o To provide welfare facilities to them
o To educate workers so that they are well
prepared to participate in these schemes
o To satisfy the psychological needs of workers.

Functions
To

be

consulted

on

matters

like

standing

orders,retrenchment,rationalization,closure,reduction
of operations etc
To

receive

information

,to

discuss

and

offer

suggestions,
To

shoulder

administrative

responsibilities

like

maintaining welfare measures, safety measures,


training schemes, working hours, payment of rewards

The agreement between the TISCO and Tata Workers Union


providing for the closer association of workers with
management, is the most detailed of all such agreement in
the country.As TISCO has been the largest single employer
in the private sector, it is natural that in such a large
organization,

relations

become

more

formalized

and

standardized.
The agreement of joint councils is hierarchical with the Joint
Departmental Council at the bottom and Joint Consultative

Council of Management at the top, with information and


recommendations flowing both ways.
The joint councils are essentially advisory in nature; their
functions being to advise the management, and the
company has reserved to itself the right to accept or reject
the recommendations and suggestions of the joint councils.
However, it should be noted that it is not the formal
constitution and functions fo the councils but the spirit in
which

they

work

that

ultimately

determines

their

effectiveness in guiding the management. In practice, most


decisions of the councils are enforced by the management.

Lab our reform in India, in the context of globalization, is


much desired, but also feared and misinterpreted. The issue
has been a touchy one ever since the liberalization era
began under the Narasimha Rao government in the early
1990s. This is because of the enormity and uniqueness of
the subject, and also due to the initial approach the
government and industry adopted to address it.
In the hurry to reform and keep up with the globalization
trend set in motion by the General Agreement on Tariffs and
Trade (now replaced by the World Trade Organization), the
immediate focus was on the retrenchment of surplus
workers and the closure of sick public and private sector
units. The knee-jerk reaction from the workforce

and trade unions were to resist this move. Massive rallies


were organized in protest, and the government was called a
puppet in the hands of the developed countries.
This trend continues today, as seen in the response of the
labour unions to recent government policies which follow the
cut-the-flab, closing-shop philosophy without realising the
significance of socio-economic factors in such an important
exercise. So, whenever there is a talk about labour reforms,
there is suspicion in the minds of the working class, a
majority of which belongs to the socially and economically
backward communities of India.
Labour reform is a very sensitive subject in the Indian
context, given the ground realities of poverty, illiteracy,
diseases, deprivation, exploitation, low per-capita income,
etc. This means that whatever is taken up in the name of
labour reforms, be it in the sphere of employment, welfare or
human resources, needs careful handling. This should have
started not as part of the second-generation reforms, but
when initial economic reforms were undertaken. However,
better late than never.
The Tatas were the pioneers in introducing a number of
firsts in the field of labour welfare. The group felt that unless
a workers welfare needs were met, there would be no profits
for industry and no progress for the nation. Well ahead of
any Indian legislation on this front, several benefits the

eight-hour working day, free medical aid, provident fund,


gratuity,

leave

with

pay,

maternity

leave,

accident

compensation, etc were incorporated by the Tatas into


their workplace culture.
POSITIVE REFORM

I mention these facts to emphasise the positive side of


labour reforms that focus on social welfare, which is primarily
the responsibility of industry. The Tatas are now considering
labour reforms very carefully, with a view to ease the social
burden of their employees and at the same time preserve
the equilibrium of job security.
Indian industry is going through a crucial phase of
restructuring as competition increases. Countries such as
China,

where

labour

is cheap and labour

disputes

comparatively fewer, are entering our markets. With high


productivity and mass production, China is a good example
for Indian labour to emulate in terms of costs and
productivity.
Given the Indian track record of getting financial help from
outside for development, the trade and economic policies of
the government come under closer scrutiny from world
bodies such as the International Monetary Fund, the Asian
Development Bank and the WTO. Thus, it becomes

inevitable for reforms of many kinds: economic and fiscal,


market, law, and labour.
Dr Charles W. Baird, the director of the Smith Centre for
Private Enterprise Studies at California State University, said
recently: "India will have to opt for labour reforms and brave
the pangs of change in the short-term in the interest of longterm economic sustainability." It is estimated that about 16
per cent of employees in the organised sector are actually
redundant. How are we going to deal with this problem?
It is worth noting that lab our reforms in India are discussed
mostly in the context of organized labour and this constitutes
merely 8 per cent of the countrys total lab our force. Are we
concerned about only this sector? How about the majority of
Indias workforce, which is in the unorganized sector?

Two-fold benefits

We must have proper labour reforms in both organised and


unorganised sectors. There will be more industries coming
up in our country, and it naturally follows that there will be
more

employment

opportunities

generated.

Many

multinational companies view India, sans its archaic and


anachronistic labour laws, and to some extent its militant
labour force, as an ideal place for economic activity. If

prompt and correct measures are taken up with honesty and


transparency, then both industry and the labour community
will benefit.
Labour reform is not just about facilitating the closure of a
sick industrial unit or about laying off employees. The core
issues of labour reforms centre on a few major points: wage
policy, employment security, labour redundancy, industrial
relations, labour market information and human resources
development. These issues can be solved by liberalising
existing labour legislation, enacting a flexible exit policy,
rightsizing,

reforming

trade

unions,

by

continuously

retraining and updating workforce skills, worker participation


in management, and by good and clean corporate
governance.
One of the major issues of labour reform in India has to do
with repealing certain laws. Various countries, including
Britain, New Zealand and the United States, have liberalised
their labour legislation, but India remains hesitant about
amending laws that are detrimental to economic growth. It is
unfortunate that while labour laws in India were designed to
be employee-friendly, they have ended up becoming antiemployment.
Government, industry, trade unions, industry associations,
economists, sociologists, constitutional experts, intellectuals,
institutes of management and social sciences, and the

media, all of these should be involved in the labour reform


process. A holistic and multi-disciplinary approach is required
to solve the problems relating to labour reforms.
Unfortunately, the concerned parties in this issue are playing
the blame game. Industry feels that the government is not
doing enough, and the trade unions argue that the
government is dancing to industrys tune. The government,
which is, sadly, a conglomeration of opportunistic political
parties, ought to take bold and visionary decisions, but it is
more concerned with vote banks and extending its grip on
power.

Cooperation required

All three parties government, industry and trade unions


are equally responsible when it comes to putting effective
labour reforms in place. Lets consider Tata Tea. This
company has been undertaking a lot of welfare measures for
its employees and their children, measures that are beyond
the scope of any legal requirement. These activities are
costing Tata Tea a lot, and at a time when the tea industry is
passing through a serious crisis.
So the Tata Tea management requested its unions to
cooperate with the company to increase productivity. This

would have helped both the company and its workers, but
the union leaders were not agreeable to the idea. Because
of their adamant nature the company and its employees
suffered. This sort of irrational and destructive approach is
detrimental to Indias industry and economy. This kind of oldorder trade unionism has to go.

EMPOWERMENT
There

are

different

ways

in

which

people

look

at

globalisation. From our perspective, I think it is important to


look at it in the form of a journey. From being a controlled
economy, the 1990s liberalisation programme led to a big
change. This created a situation in which overseas players
were attracted to the Indian market and attempted to steal
our lunch! The domestic players adopted a posture of
guarding their domestic markets with zeal. This, according to
me, is the first horizon of globalisation.
As companies used to a closed economy successfully
defended their home turf, they also started questioning
whether this was a sustainable strategy and whether they
needed to extend the same strategy to markets outside
India, create global options attempting to steal their lunch!
This is the second horizon of globalisation. This led to the
third horizon, which is characterised by three aspects:

Accessing material, financial and human resources


from the best and most competitive parts of the globe.

Acquiring customers and accessing markets which


constitute future profitable growth from anywhere in the
globethe globe.

And finally, connecting these two through best-in-class


processes and facilities to create the best value for our

customers leveraging global supply chain, suppliers,


partners and locations.

Ratan Tata:

Driving

global

stratergy
J. J Irani:

Global corporation

R.

The challenge of

Goplakrishnan: growing
Kishor Chaukar: Truly global
Bharat Vasani:

Legal recource

What differentiates a global company from others from an


HR perspective is its ability to access and deploy people and
connect them to customers in different segments and
markets in different geographies through Best in Class
processes. The question boils down to "how do you do it
better". This is related to the capability embedded in the
companys fabric. For example, the engineering capability
the Tata Group possesses in companies such as Tata
Motors, TACO, Tata Technologies and Tata Consultancy
Services is phenomenally powerful. But if you look at it as a
bundle of capabilities, it is about pulling the right kind of

resources on a global basis, making meaningful propositions


to global customers and managing the delivery.

As a group, we have taken several initiatives to enhance the


global aspect in our peoples approach and thinking. Starting
with the work that our companies began in horizon one on
cost competitiveness etc. We continue to work along with
thought leaders and faculty from top universities such as
Harvard Business School, INSEAD, CEDEP and Michigan
Business School to progress this.
With Michigan, we focus on figuring out how to manage the
"woodwork" of managing a global business. Let me illustrate
an example. We need to define and adopt a common set of
principles and approaches when operating in a global way.
For instance, how does one define and design a global
compensation policy that takes care of people movement
seamlessly within a company across various geographies? A
global compensation programme has to be flexible enough
to address unique nuances and at the same time, should
have common underlying principles. This can be an intensely
technical exercise, and is just one of the many processes
that a company needs to define. Also, a company needs to
develop and inculcate a comfort level of working with a multiethnic workforce in multi-geography settings.

From a senior management perspective, the fundamental


challenges of building a global company do not change.
What changes is the magnitude of it. One of the key
attributes is for people to buy in to the global vision. The
vision should not be too generic and neither should it be too
codified. The vision should ideally be crafted in the form of a
compelling story in which individuals can write themselves in
as "heroes" and "heroines". It is important to engage people.
The critical challenge to a global companys leadership is to
engage itself with its people with the same level of intensity
and seriousness as it does with capital investments or
business strategy.
The journey to becoming truly global has commenced in Tata
Group companies but we need to do a lot more.
Employee empowerment is the latest buzzword in business
and a variety of Tata companies are working overtime to
place their people in the driver's seat
The crowd holds its collective breath as Pakistan speedster
Shoaib Akhtar prepares to strike. But the batsman, B.
Muthuraman, is unperturbed. The delivery is sent flying into
the stands. The cheers get louder as the Tata Steel
managing

director

raises

his

bat

in

triumph.

Not real life, but an inspirational film. "It's a part of our Vision
2007 campaign," explains Niroop Mahanty, vice president

(HRM), Tata Steel. Adds B. N. Sarangi, chief, HR/IR, Tata


Steel, "The idea was to motivate employees to accomplish
the impossible, like hit a six off Shoaib Akhtar." Or achieve
EVA (economic value add) positive status by 2007.
The buzz in Jamshedpur is palpable. Tata Steel is not
looking at incremental improvement, but a quantum jump in
performance. Unlike its previous attempts, Vision 2007 is not
a top-down initiative. More than 8,000 inputs from shop-floor
workers and managers, contributed in articulating the future
course for the lowest-cost producer of steel in the world. Tata
Steel's human resources (HR) department further cascaded
the knowledge to all of the company's 40,000 employees.
Assimilation of the vision was of paramount importance. Tata
Steel organised one-day workshops called 'Lakshya 2007 Ek Chunauti' where employees were encouraged to write
down their main responsibilities. These were then aligned
with the departmental, divisional and company's key
performance indices and, finally, with the vision. This
innovative approach has garnered tremendous support from
employees. Says Suman Biswas, Improvement Group, Tata
Steel: "The employees felt important as they were made an
integral element of the vision. Our commitment is total."
Tata Steel has been inundated with scores of ideas and
suggestions generated at its employee workshops. It is

setting up a centre to implement and even patent the viable


ones,

while

publicising

the

names

behind

them.

Winds of change

With globalisation and competition challenging the corporate


world, HR managers can no longer play just the traditional
administrative and welfare role. They are expected to be
effective change leaders, working at the centre of each
business rather than at the fringes of the action. Today HR
helps define the business case for change, it communicates
a vision of the future, shapes a sound implementation plan,
and follows through to achieve sustained results. Changing
times call for different and innovative strategies and a
catalyst

called

technology.

With footprints in various geographies, IT leader Tata


Consultancy Services (TCS) created systems for managing
the future. The need was to deploy employees in a seamless
and integrated manner. The innovative solution it engineered
to meet these challenges is called Ultimatix. Designed inhouse, it digitised the whole organisation in real time through
the web. Every single employee was connected through this
platform across the globe. Ultimatix has also been
successful in cutting through layers of decision-making
within

TCS.

"Ultimatix has become our single employee-service window,"


says S. Padamnabhan, executive vice president and head Global HRD, TCS. "It has ensured that employees get their
services without much difficulty. They can log in with their
claims, loans or even leave applications for processing. All
approvals are done online. To that extent, we are a
paperless

organisation."

To a population that is highly mobile, virtual HR is a


godsend. With deployment being a challenge to companies
with the size and spread of TCS, it is a major time saver.
Besides its HR policies, the organisation has taken its
appraisals and employee satisfaction surveys online. It does
not end here. The survey findings, along with implemented
suggestions, are also posted online. Rising employee
satisfaction

scores

endorse

the

popularity

of

these

initiatives.

Incubating innovation

Every employee possesses the power to innovate. The

challenge is to create an encouraging environment that


allows and recognises this, believes Bernand Martyris,
senior VP (HR), Indian Hotels. This is one of the key
elements of the company's Stars, or Special Thanks and
Recognition Systems, programme. Since its launch three
years ago, the globally acclaimed model has triggered
soaring employee satisfaction scores, besides numerous
employee suggestions and innovations, many of which are
best

practices

today.

"Whether it's an indigenously manufactured bathroom mat or


a new chemical for the laundry, every idea is big and shared
across the hotel chain," says Mr Martyris. "It has shattered
the myth that only people at the top are creatively inclined."
There is a huge reservoir of innovation waiting to be tapped
among

all

levels

of

employees.

The success of the earlier programme led Indian Hotels to


introduce 'Stars Plus', a spin-off for its service providers, and
'Joy at the Workplace', which is aimed at team building and
bringing cheer to the office. From celebrating birthdays to
organising

cricket

matches

between

the

various Taj

properties, the objective is to keep employees motivated.


Instead of major initiatives, HR is engaging in small but
innovative activities which might appear mundane but make
the

employee

feel

at

home

while

at

work.

The human factor

HR has also discovered the lost art of listening. Employee


satisfaction surveys and primary mood reflectors within the
organisation have become sacred. This helps in targeting
employee irritants and executing policy changes. Also, HR is
more transparent than ever before. Companies are providing
direct

personal

interaction

through

around-the-clock

telephone or intranet / Internet access. For example, TCS


has a HR help desk where employees can call in with any
HR-related questions. Currently operational in about three to
four locations, TCS plans to expand this unique facility to all
its centres.
Jobs are out, careers are in. And HR is assuming the
responsibility for plotting the career paths and growth of the
employees. Most software engineers have a three-point
agenda: globetrotting, annual promotions and acquiring
millionaire status. "This is the base aspiration and we have
to address elements of it," says Mr Padmanabhan.
TCS, India's first billion-dollar IT enterprise, offers a host of
other tangible and intangible benefits to transform its
employees into world-class professionals. It supports a
rotation policy where employees' discipline is changed every

two years, to expose them to different geographies, projects


and technologies. Training and continuing education
programmes are compulsory. Likewise, the Taj draws up an
extensive training calendar at the beginning of the year for
its employees.
Knowledge sharing has acquired great significance in the
corporate world. Today most companies allow some level of
knowledge sharing through various media. While most of
these programmes are usually aimed at the managerial
level, Tata Steel's Aspire Knowledge Manthan is a rare
programme that enables knowledge sharing among
supervisors and workmen. The purpose of this effort is to
instil confidence in people and help them perform better.
Change agents
Recent economic trends have compelled companies to
tighten the belt and adhere to fiscal responsibility.
Companies are returning to improve efficiencies, streamline
processes, make intelligent choices, ensure profitability and
strengthen the corporate fibre in order to be more
competitive. Change is crucial. But the Jamshedpur-based
Tata Motors' commercial vehicles division (CVD) has
discovered that managing people to manage change is even
more important.
Its department for productivity services has been the change

agent to achieve the dual task of employee involvement and


waste elimination. Says A. K. Dua, deputy general manager,
Productivity Services, Tata Motors, "We have tried to be
innovative in each of our initiatives."
For instance, the first thing that the team addressed was the
need to create champions and opinion leaders from various
divisions within CVD. Under the Total Productivity Model, the
division started using a system under which an individual
would be the owner of a machine. It would be this person's
responsibility to improve its performance and to keep it
clean.
"When you deal with people, you deal with emotions. We
found that there was a lot of resistance and even hostility
towards this model. Someone pulled out a peg from a
machine to spite the attempt. So four senior managers took
up the ownership of one machine each to set a precedent.
They would clean up the machine themselves. Soon, we
have others asking if they can do this too," says Mr Dua.
Even in the area of managing in a lean and mean way the
division has tried attacking the issue from all angles. For
instance, in the area of travel not only is each department
keeping track of it's own expenses but a central coordinator
has also been appointed. "He develops economy routes. He
has worked out that the expense can be cut down

substantially if people don't stay overnight in Mumbai on their


way to Pune. These may sound like trivial things but they
make a big difference," he says.
In order to keep track of each department's performance on
productivity the division has created a single sheet method in
which traffic light signals indicate red, green or yellow. "All 18
divisions are monitored regularly on this basis. If one is on
yellow, it means that it is going slow and may need a push,"
says Mr Dua.
Catching 'em young
Tata Motors' FastTrack initiative was launched to nurture
leaders from a young age. Aimed at recognising talented
employees, it facilitates early advancement to challenging
and visible assignments through a systematic procedure.
The selection involves a three-stage process: a written test,
a 'power' interview and assessment. Short-listed candidates
are required to go through an interview with the executive
directors. Selected candidates gain a huge lead in terms of
promotion and learning. They are relieved from their current
jobs and put on various project-based training programmes
under the guidance of senior managers in the company. If
the candidates do not possess management education, they
undergo a four-month course at the Indian Institute of
Management, Ahmedabad.

"Any employee with two years of work experience in the


company can apply for this programme," says V. K. Verma,
head, corporate human resources, Tata Motors. "Till date it
has generated more than 60 potential leaders in the
company, and they are at least 10-15 years younger than the
natural climbers."
After the successful completion of the programme, the
candidates are rotated across departments to acquire
general management skills. "In fact, the programme has
performed so well that we are helping duplicate it in other
Group companies, with Tata Chemicals being one of them."
Looking beyond
Yesterday's innovative practices are routine today. This is
true about employee welfare schemes standard with most
corporates. Companies are looking at the workplace and
beyond. The emphasis is on enriching and improving the
quality of life. Tata Steel, a pioneer in employee welfare, is
making huge investments in environment and education in
Jamshedpur. Pollution, occupational hazards, safety
regulations and health are the other constants on its plate.
Tata Motors' innovative concept of a 'leave bank' has been
much appreciated by its employees. In this scheme, every
employee voluntarily donates one day's leave to a notional

bank every year. In return, the employee is entitled to one


year of paid or two years of half-pay leave.
"This helps in the case of any accidents or need for long
leave," says Mr Verma. "On resuming, the employee pays
back only 10 per cent of the leave withdrawn." To prevent the
misuse of this facility, two members of the management and
union head the leave-approving committee.
Long working hours, extensive travel and desk-bound jobs
skewed the delicate work-life balance of many a TCSer.
Propel came to the rescue. Under this innovative initiative,
the company encouraged the formation of groups with
similar interests to come together to conduct various
activities like book reading. Maitree, an initiative for the
spouses of employees, helped in bringing together the
families of the employees. This has not only increased
sharing and communication within the company, but has also
remarkably improved the social skills of employees, says Mr
Padmanabhan.

RECOMMENDATIONS

RECOMMENDATIONS

Two of the major impediments in bringing about


desired labour reforms are the anti-labour stand in the
management mindset, and labour prejudices. These
must be researched and corrective action taken to
smoothen the road to reform.

Good and clean corporate governance is a vital


necessity if labour reform is to happen.

More and better attention has to be paid to human


resource development.

Industrial bodies have to take up worker education.


The

worker

education

models

adopted

by

the

Productivity Council of India, etc need a thorough


revamping.

There is tremendous labour potential in the rural


sector. This has to be tapped by industry, with a
renewed focus on unorganised labour.

The media has been covering labour reforms and


related issues for long. A media-relations strategy
should be worked out to highlight issues relating to the
subject.

While India is labour intensive, it also boasts top-notch


intellectual capital. The countrys human talent and rich
economic capital investment potential make it highly suited
for industrial development. What is required is objectivity in
understanding the problems at hand, strong political will,
changes in the countrys legal system and labour market
flexibility.
Neither an indifferent management approach nor trade union
militancy is going to lead to labour reform. A positive and
careful approach is required to bring about painless labour
reform in this country, and the mainstay has to be welfare
economics.

CONCLUSIONS

CONCLUSION
Participation is one of those words that can mean almost
anything. In this case it can mean at least two opposite
things: reinforcing bureaucracy or overcoming it. Managers
and others have no difficulty in participating within the
traditional framework: that is, they want to be left alone to do
their jobs, to get out from under unnecessary rules; and they
are delighted to discuss with superiors how their jobs can be
done better. These kinds of participation date back at least
to the 1920s.
Flexible

organizations,

however,

require

that

people

participate beyond their jobs: everyone needs to understand


and contribute creativity to the overall purpose of the
organization. That kind of participate profoundly threatens
traditional relations.
Surprisingly, this is the crux of the change in expectations.
Lay offs and downsizing do not shatter the shatter the
contract of loyality.Managers are able to rationalize these for
a long time as response to crisis, and to settle into a waiting
posture .They dont fundamentally give up the expectation
that if they can just get through this period things will return
to normal.

Being asked to get involved in strategic purpose is a far


more

serious

threat,

because

it

establishes

new

relationships. If middle managers (and others) have real


involvement in issues beyond their jobs, it means that the
whole systems of beaurocratic coordination needs to be
reconstructed; it means that the uncertainty and threats of
the out side world have to be become a daily reality for
every one,not just the top; it means that middle managers
have to be treated far more as independent agents than
before. Those are difficult shifts that are widely resisted ,and
most existing programs do not penetrate the resistance.