A Presentation on

“Tata Group: Transforming the

Sleeping Elephant”

Sangeeta Jha BM09186

Shalini Ambastha 09191
Shyamali Bajpai 09207
Shivi Bindra 09198
Sushmita Chatterjee 09221
 UNFOLDING OF A CRISIS
•After the proposition of strategic plan in
1991,Ratan Tata’s observations.
•Acc to them, the needs today are that they
should define their business.
•Interview with Ratan Tata
•The differences began to emerge within the Tata
group with different centrifugal tendencies
• No of Tata companies began competing
against one another.
• Comment Of Darbari Seth
 LEGACY OF JRD
• In circa 1938,Tata son’s elected JRD Tata
• It gave new directions to the group.
• JRD Consensual approach to decision making.
• Its result was the development of a managerial
environment marked by decentralization,
participatory decision making & professionalism.
• JRD had an ability to repeatedly recognise, recruit,
develop & support highly talented executives.
• As a result, it became a matter of pride & status to
work for the Tata group.
• 1970
• TAS
• Joint consultative system set up in 1957
 The beginning of new Dawn
• JRD Tata started to step down from the chairmanship
of various Tata companies as the 1980 dawned.
• This results in the weakening of the tenuous ties that
bonded the group together.
• In 1981, JRD stepped down in favor of Ratan Tata,
grand nephew of JRD, as chairman of Tata Industries, a
ceremonial position as head of the junior of the two
central companies, the other being Tata Sons.
• the future is rife with both opportunities and risks with
the departure of JRD's generation and new and
relatively unproven generation taking charge
• There were still doubts regarding whether they will be able to
retain the vision and values which have really been at the core of
their success
• There were several skeptics among the directors, even JRD himself
like
• “Our approach of strategic planning is a gimmick. We have done
very well without these new fangled ideas. All decisions are
incumbent on government policy anyway. So, why is this young
man thrusting new jargon down our throats”

• As per the JRD Tata their companies are so diverse, their

technologies so different, that centralized planning may lead to
disastrous strategic mistakes.
•
• However, Ratan Tata and his team at Tata
Industries pressed ahead with the strategic plan
and They matrixed the Tata Group into seven
business areas and tried, somewhat
unsuccessfully, to get the company heads to
think in terms of business areas. He offered to
take a leadership position in the area of high
technology.
• Ratan Tata suggested eighth business and that
was “High Technology”
 Grand Strategic Plan
• Reconstituted proposed business areas were :

 High technology industries

 Metals and Associated Industries
 Consumer Products
 Utilities
 Engineering Industries
 Chemical and Agro Industries
 Service Industries
 International Business
 Grand Strategic Plan contd…
• Major recommendations to examine environmental trends for
coming decade were :

 Joint venture partnership should be explored.

 Promotion of new projects.
 Tatas should go for the route of mergers, acquisitions and
divestitures.
 Tatas should increase their shareholding in their group companies.
 Tata organizations should form mutually beneficial complementary
relationships with the small-scale sector.
 Tatas need to adopt a technology-oriented policy for growth and
survival and must exit low technology businesses.
 Grand Strategic Plan contd…
• Indian economy went through a double crisis : 1979 oil
shock and subsequent worldwide recession shook India’s
trade balance
• Inflation continued and agricultural production declined.
• To spur growth government relaxed restriction on business
shifted emphasis towards achieving greater productivity,
efficiency, competitiveness and exports with more reliance
on private sector.
• Licensing requirements were eased.
• Greater trade and foreign investment liberalization took
place.
• Flexible exchange rates led to export promotions.
 Grand Strategic Plan contd…
• The economy rebounded: real GDP grew 5.8%
on average during (1985-1990)
• inflation was lower at 6.4%;
• exports grew by over 10%
• According to Ratan Tata the government’s
new policy were drawn from his strategic
plan’s forecast and various business groups
started moving in the indicated direction.
 Grand Strategic Plan contd…
• Due to good operating management in relatively protected markets, the steel
division, the electrical division and the chemical division did good during the
second half of the 1980s.
• Tata Steel acquired several unprofitable downstream businesses and turned them
around.
• The chemicals division also grew impressively and began planning numerous large
projects in oil refining, petrochemicals and fertilizers.
• Demand for TELCO's HCV (its primary product) peaked in 1983. Meanwhile, in a
new segment altogether, demand for LCV's started rising.
• The government allowed the manufacturer of one class of vehicles to make
vehicles of another class without seeking a separate license. TELCO quickly
capitalise on this opportunity.
• It entered the market with its indigenously developed LCV (i.e., Tata 407) and
cornered a significant market-share.
• Titan Industries was promoted to manufacture watches that shook an industry
dominated by a PSU.
• Tata Unisys and TCS dominated the rapidly growing IT industry.
 Grand Strategic Plan contd…
• Tatas showed poor performance in the textile business
and to the effect of 1983 strategic plan they quited this
industry.
• In 1982, the government had partially eased price
controls on cement. ACC, a Tata company was slow in
reacting to the opportunity.
• TOMCO and NELCO continued to falter in the market.
• VOLTAS faced setbacks in the traditional retail
distribution business as its suppliers integrated
forward and its distributors integrated backward to
take away business.
 Inertia – The Resistance to Change
• Tatas were slow to react to the changing demand of the
environment, Organizational culture rooted in
bureaucracy and regulation, top management mind-set,
rigid structure and decision-making process retarded the
process of restructuring.
• All the firms in the Tata Group were pursuing
independent strategies and often their business interests
clashed with each other resulting in fierce competition
amongst different Tata firm, it was the situation in 1991
when Ratan Tata took over as chairman.
• Ratan Tata also did not command the kind of
authority that any of his predecessors did. The
result: the group now lacked the spirit of
central cohesiveness. There was also strong
resistance to change.
• So there was the need of strong systems in
place to restructure the group,
 Remedy-by institutionalizing
change
• Corporate communications.
• Operate synergistically.
• Facilitate greater interaction.
• Affliates greater control.
• Proper framework.
• Autocracy.
 TATA Brand-Identity:
• Strong collective identity.
• Degree of financial control.
• Outstanding representation.
• Promote TATA as a brand in meaningful
manner.
• Adopt strong global TATA corporate
campaign.