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Batch : 2014

Course Code : 50121106

Course Name : (Principles of Management I)

Roll No. : 720


Assignment No. : A 112

TATA GROUP
Emphasizing more on Tata Beverage Group

14 PRINCIPLES OF MANAGEMENT
HENRI FAYOL

1 Division of Work

We know that TATA Group is an umbrella that covers various business industries.
Considering this, it only makes sense to divide work by allocating it to different
employees, thereby enabling them to build up experience and continuously increase and
improve their skills. This leads to increased productivity and ultimately higher profits.
For instance, Tata Beverage Group recruits for the following areas : Plantation Management
Finance
Sales and Distribution
Brand Marketing
Information Technology
Medical Professionals

2 Authority
Authority, as defined by Fayol, is the right to give orders and the power to
exact obedience. Tata Group realizes that MNCs decision making and conflict
resolution follow a straight line. It believes that if decisions are held up due to
conflicting viewpoints, the issue is expected to speedily traverse up the line for
a resolution. Sometimes there is no empowerment.
For instance - An employee of a Tata Beverage Group is entrusted with
confidential/insider information. He shall not use or proliferate information
that is not available to the investing public. By doing this, the company
provides authority to its employees of holding such information. At the same
time, responsibility is exacted by the employees that this information will
remain confidential throughout their term with the company. Such insider
information might include - Raising of finances, Restructuring plans., Asset
revaluations, Financial information such as profits, earnings and dividends etc.

Discipline

Goes without mentioning, successful organization requires the common effort of


workers, even if judicious use of penalties are required to exact this effort.
Tata has drafted its own Code of Conduct to guide the behavior of its employees.
Highlights of this Code of Conduct :

Every employee of a Tata company, including full-time directors and the chief
executive, shall exhibit culturally appropriate deportment in the countries they
operate in, and deal on behalf of the company with professionalism, honesty and
integrity, while conforming to high moral and ethical standards.
Every employee of a Tata company shall preserve the human rights of every
individual and the community, and shall strive to honour commitments.
Every employee shall be responsible for the implementation of and compliance
with the Code in his / her environment. Failure to adhere to the Code could
attract severe consequences, including termination of employment. [Penalty]

Unity of Command

Workers should receive orders from only one Manager.


The Management team for each department within Tata Beverage Group has
been clearly defined. Each employee under his/her respective department
should receive orders from the manager of the department.
Various managers of different departments are as follows
Hameed Huq Managing Director
M D Kumar - Executive Director Finance
T Radhakrishnan - Vice-President ICD Operations
A.S. Muthanna - Vice-President Plantations

Unity of Direction

The entire organization should be moving towards a common objective in a


common direction.
Tata Beverage Group cooperates with other Tata companies including
applicable joint ventures, by sharing knowledge and physical, human and
management resources, to achieve common goals and objectives. The entire
Tata Group as a family, has a single direction. Also, as mentioned in the code
of conduct, a Tata company shall recommend to its board of directors the
adoption of policies and guidelines periodically formulated by Tata Sons.
This provides an example of how a policy framework laid down by the
superior body guides and directs the companies to a common objective.

Subordination of Individual Interest to General


Interests

The interests of one person should not take priority over the interests of the
organization as a whole.
The Code of Conduct of Tata Beverage Group clearly states that an
employee or director of the company shall always act in the interest of the
company.
He/she should ensure that any business or personal association which he / she
may have does not involve a conflict of interest with the operations of the
company and his / her role therein. The Code of Conduct cites 3 areas of
actual or potential conflict of interests. One of the highlights warns
employees that the interest of the company or group cannot be compromised.
Any personal interest that may potentially influence company interest should
be disclosed. Failure to do so can lead to suitable disciplinary action.

Remuneration

Workers rate of pay is subject to several variables such as cost of living,


general business conditions etc.
Tata Group follows this principle. For instance, Since the Economic Value
Added (EVA) targets for the third quarter of FY 2007-2008 were not met,
TCS announced its plans to slash 1.5 percent of the variable component of
employee salaries.
[The variable part of the salary was arrived after considering business unit
EVA, corporate EVA, and also individual performance EVA.]

Centralization and Decentralization

Tata Group is a decentralized family of companies grouped into seven


sectors.
Tata Beverage Group Human resources and communications, information technology, finance,
production, procurement and research are handled at a global level.
A global executive office is situated in London, comprising of Chief
Executive and Deputy Chief Executive who oversee global operations,
including factories and production, tea and coffee buying, and
procurement.
Sales and Marketing operations have been decentralized. These operations
have become the responsibility of 6 specific regions.
The 6 key regions handling Sales and Marketing are - UK, Africa, US,
South Asia, Canada and South America. Each region is led by a President.

Scalar Chain

Official Chain of Command that has to be strictly followed in an organization.


According to the Tata Groups Code of Conduct Every employee of a Tata
company shall promptly report to the management, and / or third-party ethics
helpline, when she / he becomes aware of any actual or possible violation of
the Code or an event of misconduct, act of misdemeanor or act not in the
companys interest.
The specified Managerial Chain of Command is as follows
1 - Hameed Huq (Managing Director)
2 - M D Kumar (Executive Director - Finance)
3 - T Radhakrishnan (Vice-President ICD Operations)
4 - A.S. Muthanna (Vice-President - Plantations)
5 - Christine F Jamal (Vice President - Corporate)
6 - M K C Pai (company secretary)

Order

According to the Code of Conduct, a Tata Company shall maintain its


Financial reports in an orderly manner. Internal accounting and audit
procedures shall reflect, fairly and accurately, all of the companys business
transactions and disposition of assets. All required information shall be
accessible to company auditors and other authorized parties and government
agencies. No employee shall make, authorise, abet or collude in an improper
payment, unlawful commission or bribing.

Equity

Tata Group promises to provide equal opportunities to all its employees.


According to the Code of Conduct, Human resource policies shall promote
diversity and equality in the workplace, as well as compliance with all local
labour laws, while encouraging the adoption of international best practices.
Everyone has the right to be heard and equal opportunity is provided to those
eligible and decisions are based on merit.

Stability of Tenure of Personnel

Tata Group believes in Concurrent Employment. Accordingly, the


company bars its employees to accept any other form of employment or a
position of responsibility, paid or unpaid, unless an official permission has
been furnished by the company itself. This keeps the Employees associated
with the company on a long term basis and helps the company extract long
term service. This saves the company the cost of recruiting and training fresh
employees.

Initiative

To instill and encourage initiative in employees, Tata Group has come up with Tata
Innovation Day, also known as Tata Innovista in 2010. On this day, following
awards are given to innovation teams that come up with the best innovations

Promising Innovations Given to the most successfully implemented


innovations during the year.

Dare to Try Award given to that team which made a valiant attempt for a major
innovation, but failed. The award felicitates their spirit and encourage future
initiative.

The Leading Edge Award given for most innovative Business idea. Subcategories
Innovative idea for one's own company
Innovative idea for a different Tata Company
Innovative idea that is new to the Group

1.
2.
3.

Espirit De Corps

Tata Sponge Iron Ltd. offers its employees the following to encourage and
promote team spirit.

A work culture which stimulates innovation, team work & freedom to


excel.

Reward & Growth that is performance-driven.

Most contemporary perks & other amenities.

Continuous training and development opportunities at all levels.