NITIE Mumbai

Study on Organizational Structure and

Leadership Style of TATA Motors

Team Members

Suhas Jamble 102| Balu Sukate 103| Sumit Guha 104

Sunit Mhasade 105| Sumeet Suman 106| Sunny Tonk 107

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CONTENTS
INTRODUCTION 3
PRODUCTS AND SERVICES 5
ARTICLE REVIEWS 7
ORGANISATIONAL STRUCTURE LITERATURE 7
1. How organizational climate and structure affect knowledge management-
management The social
interaction perspective. (Chen & Huang, 2007) 7
2. The relationship between product customization and organizational structure (Vickery,
CorneliaDroge, & Germain, 1999) 8
3. Knowledge sharing in inter unit co-
co operative episodes: The impact of organizational
structure dimensions (Willen & Buelens, 2009) 9
4. An holistic approach to understanding the changing nature of organizational structure
(Doherty, Champion, & Leitao Wang, 2, 2010) 10
5. Theories of organizational structure and innovation adoption: the role of environmental
change (Damanpour & Gopalakrishnan, 1998) 11
REVIEW OF LEADERSHIP STYLE LITERATURE 13
1. How Much Time Should CEOs Devote to Customers? (Quelch, 2008) 13
2. Organization development and leadership: R.B. Reid and the dynamics of success-
success BRITISH
RAILWAYS (Barlow, 1996) 14
3. Leadership Types and Styles - Overview of Skills (Hick) 15
4. A dynamic theory of leadership Development (Mostovicz, Kakabadse, & Kakabadse, A
dynamic theory of leadership developement, Vol. 30 No. 6, 2009) 17
5. Transformational versus servant leadership: a difference in leader focus (Stone, Russell, &
Patterson, (2004,Vol. 25 No. 4)) 18
Current organizational Structure of TATA Motors 20
COMPARISON & CONCLUSION 21
TATA Motors with Organisation Structure 21
TATA Motors with Leadership Style 22
ANNEXURE 24
1. Correspondence with Interviewee 24
2. Interview Questionnaire 26
LOG OF VISIT 29
BIBLIOGRAPHY 30

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INTRODUCTION

Tata Motors Ltd has two business units – the Passenger Car Business Unit (PCBU) and
Commercial Vehicles Business Unit (CVBU). The vision and mission of both the business
units are given below

Vision
“Best
Best in the manner in which we operate, best in product we deliver & best in our value
systems & ethics.”

Mission
“To
To become world class automotive engineering & product development centre and enable
Tata Motors to become a world class automotive company.”
company.

Company Overview
Tata Motors is India’s largest automobile company. It is the leader by far in commercial
vehicles in each segment, and among the top three in passenger vehicles with winning
products in the compact,ct, midsize car and utility vehicle segments. The company is the
world’s fourth largest truck manufacturer and the second largest bus manufacturer with
consolidated revenues of Rs. 92,519 crores (USD 20 billion) in 2009-10.
2009

TATA Motors is one of the oldest automobile companies established in 1945 & delivered its
first model on roads of India in 1954. Now, it is present all over the country. The company's
manufacturing unit in India is spread across Jamshedpur (Jharkhand), Pune (Maharashtra),
Lucknow (Uttar Pradesh), Pantnagar (Uttarakhand) and Dharwad (Karnataka). The company
is establishing a new plant at Sanand (Gujarat). Over 5.9 million Tata vehicles are running on
Indian roads.

TATA Motors, the first company from India's engineering sector to be listed in the New York
Stock Exchange in September 2004. It has also emerged as an international automobile
company having operations in the UK, South Korea, Thailand & Spain.

In year 2008, it acquires Jaguar Land Rover from Ford Motors & in the same year TATA
launched
aunched Nano, people’s car. Fiat Group & Tata Motors announce establishment of Joint
Venture in India in 2007. Tata Motors acquires 21% stake in Hispano Carrocera SA, Spanish
bus manufacturing Company. In 2004, it acquired the Daewoo Commercial Vehicles
Company, South Korea's second largest truck maker.

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The company’s manufacturing base is spread across Jamshedpur, Pune, Lucknow and
Pantnagar (Uttarakhand). Also the company has R&D centres in Pune, Jamshedpur,
Lucknow, Dharwad in India, & in South Korea,
Korea, Spain & the UK. TATA Motors developed the
first indigenously Light Commercial Vehicle, India's first Sports Utility Vehicle & in 1998, the

Tata Indica, India's first fully indigenous passenger car. Within two years of launch, Tata
Indica became India's
ia's largest selling car in its segment. In 2005, Tata Motors created a new
segment by launching the Tata Ace, India's first indigenously developed mini-truck.
mini The
company is establishing two new plants at Dharwad (Karnataka) and Sanand (Gujarat). The
company’s
any’s dealership, sales, services and spare parts network comprises over 3500
communication points.

The People
Tata Motors is having employee base of 24,165. The company helps its employees to realize
their potential through innovative HR practices. The company’s
company’s goal is to empower and
provide employees with dynamic career paths in congruence with corporate objectives. All-
All
round potential development and performance improvement is ensured by regular in-house
in
and external training. The company has won several
several awards recognizing its training
programmes.

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PRODUCTS AND SERVICES

Passenger Cars:
The range comprises Tata Indica (compact car), Tata Indigo (sedan), Tata Indigo
Marina (station-wagon)
wagon) and Tata Nano (small car). The company also distributes and
markets Fiat branded cars in India.

Utility Vehicles:
A range comprising Tata Aria (Crossover); Tata Safari (SUV), Tata Xenon XT (Lifestyle
Pick-up),
up), and Tata Sumo Grande MK II, Tata Sumo range and Tata Venture (People
Carriers).

Commercial Vehicles for goods transportation

• Small Commercial Vehicles:
Vehicles Tata Ace, India’s first indigenous mini-truck.
truck.
• Light Commercial Vehicles:
Vehicles Pick-ups
ups and trucks ranging from 2T GVW to 7.5T GVW.

Commercial Vehicles for passenger transportation

• Tata and Tata Marcopolo range
range of light, medium and heavy buses from 2T GVW
onwards.
• Multi-purpose
purpose vehicles – Tata Magic, Tata Magic Iris, Tata Winger and Tata Venture –
for urban and rural transportation.

Subsidiaries Companies
These are various subsidiaries of Tata Motors.
• Jaguar Land Rover
• Tata Marcopolo Motors
• Tata Daewoo
• Hispano Carrocera
• Tata Motors (Thailand)
• Telcon
• Tata Motors European Technical Centre
• Tata Technologies
• TAL Manufacturing Solutions
• HV Transmission and HV Axles
• Tata Autocomp
• TML Distribution Co.
Co
• Tata Motor Finance

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Product Profile

Commercial
Passenger Cars Utility Vehicle Trucks passenger
Vehicles

Indica Sumo Small Commercial Bus

trucks (Ace)

Winger
Light Commercial
Indigo Safari
trucks (TL4X4)

Nano Xenon Intermediate Commercial Magic

trucks (Turbo Truck)

Fiat

Medium & Heavy

Prima truck
Commercial trucks

Construck

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ARTICLE REVIEWS
ORGANISATIONAL STRUCTURE LITERATURE

1. How organizational climate and structure affect knowledge management-

management The
social interaction perspective. (Chen & Huang, 2007)

Objective:-
The article emphasises on the study to examine the effects of organizational climate and
structure on knowledge management from the social interaction perspective. The
regression analysis is used to test the hypotheses in a sample of 146 cases.

Key Variables:
Organisational climate, organisational structure,
structure, social interaction, knowledge
management.

Findings:-
Firstly, the author has adopted the process-oriented
process oriented view to investigate the mediating
effect of social interaction on the relationship between organizational
organizational climate and
knowledge management. Secondly, he examines how social interaction affects the
relationship between organizational structure and knowledge management.
Organizational climate plays an essential role in shaping employees’ behaviours and an
influencing their perception of knowledge management. If the organization possesses a
strong innovative and cooperative climate, employees would receive a clear signal that it
is acceptable or desirable for them to build up interaction networks to share and gather
knowledge. Conversely, if the innovative and cooperative climate is relatively weak or
inexistent, employees would perceive a lower need to interact with colleagues. Besides
organizational climate, the author also emphasises on organizational structure
st which is
likely to affect the social interaction among organizational members. As a result, the
author expects that an innovative and cooperative climate would provide a vital
atmosphere for strengthening social interaction among organizational members.
mem

The author also states the importance of mediating effect which gives the relationships
between independent variables of organizational climate and organizational structure
and dependent variable of knowledge management and states two hypothesis that the
social interaction mediates the effect of organizational climate on knowledge
management and Social interaction mediates the effect of organizational structure on
knowledge management. These hypotheses have been explained by the author with
regression method.

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Conclusion:-
1. First, the smaller sample size of this study raised the non-response
non response bias concern.
We have done the t-statistics
t statistics and w2 test to verify that the non-response
non bias is
not a significant issue. Also, the sample size in our study is barely
ba satisfactory to
generate the meaningful results as the regression models include 8–12 8
independent variables. Accordingly, the smaller sample size of the survey is
noted as a potential limitation in this study.
2. The study focuses only on two organizational
organizational context including climate and
structure. There are other organizational constructs that warrant discussion.
Future research may explore how these different constructs affect intra- intra
organizational social interaction and knowledge management.
3. The findings suggest that innovative and cooperative climate is positively related
to social interaction. When the organizational structure is less formalized, more
decentralized and integrated then the social interaction is more favourable. Also
the social interaction
interaction is positively related to knowledge management.
4. These empirical evidences support the process-oriented
process oriented view and indicate that
social interaction plays the mediating role between organizational climate,
organizational structure, and knowledge management.

2. The relationship between product customization and organizational structure

(Vickery, CorneliaDroge, & Germain, 1999)

Objective:-
This research examines the relationship between the extent of use of a product
customization strategy
ategy and organizational structure, since structure is a key to
managers’ implementation of strategy.

Key Variables:
Product customisation, decentralisation, span of control

Findings:-
Four aspects of organizational ‘structure’ are considered. They are formal control
(encompassing the measurement of competitive, internal, and supplier performance)
and three key dimensions of organizational design: decentralization, layers, and spans of
control. A contingency approach is taken by simultaneously examining the main and
moderating effects of environmental uncertainty and firm size. LISREL results show that
customization associates with more formal control, fewer layers, and narrower spans of
control. Subgroup analysis revealed that these main effects are, for the most part, not
moderated by size or environmental uncertainty.

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The main effects of size on structure were consistent with previous research: larger
manufacturers are more formalized (in terms of performance controls) controls and de-
centralized, and utilizee more layers and wider spans of control. Manufacturers
Manufacturers operating
in more dynamic environments are more decentralized, but have more rigorous formal
control.

Conclusion:-
Managers should thus understand that, for the most part, they need not concern
themselves
elves with size and environmental uncertainty when selecting an appropriate
organizational structure to ‘match’ the desired level of product customization
customizatio

3. Knowledge sharing in inter unit co-

co operative episodes: The impact of
organizational structure dimensions
dimen (Willen & Buelens, 2009)

Objective:-
The objective of article is how the classic organizational structure dimensions should be
altered to be more adapted to organizational knowledge sharing. The behaviour of the
relationship between coordination, centralization, formalization, and specialization, with
the concept of knowledge sharing has been studied.

Key Variables:-
Knowledge sharing, coordination, formalisation, specialization

Findings:-
Studying effective inter-unit
unit knowledge sharing in organizations requires insight into how
organizational structure influences and shapes the cooperative episodes in which
knowledge sharing takes place. To obtain this insight, we revisit four of the most
important classic organizational
organizational structure dimensions, namely coordination,
centralization, formalization, and specialization; and assess their impact on inter-unit
inter
knowledge sharing. These classic organizational structure dimensions are underpinning
the differentiation–integration
integration balance,
bala which has been the major focus in the classic
organization theory literature.
literature The impact of coordination on knowledge sharing depends
on the kind of coordination mechanisms used, and this is closely related to the other
structure dimensions (centralization,
(centraliz formalization and specialization).

Formalization indicates the extent to which the rights and duties of the members of the
organization are determined and the extent to which these are written down in rules,
procedures and instructions. Decentralised,
Decentrali i.e. horizontal-coordination
coordination consisting of
teams, mutual adjustment, networking, and integration roles (less formal and
decentralized) allows flexible coordination during task execution and can deal with ad
hoc communication and information.

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Informal coordination (informal and decentralized) was not topical in the classic
organization structure literature but received thorough attention in the network
literature, which also stressed the relationship with knowledge sharing. Informal
coordination,
n, i.e. any form of personal contact between people and units in the
organization that is not intended or imposed by management.
management

Conclusion:-
Empirical data was collected by means of a questionnaire in two companies. Our
findings indicated that expected relationships,
relationships, such as the negative effect of
centralization or the positive effect of lower formalization, were not found.
Interdependency and knowledge complexity, caused by specialization, had an important
interacting effect on the relationship between coordination
coordination and knowledge sharing. A
comparison between the two companies revealed that the organization-specific
organization context
in which the coordination is applied influences the potential of this coordination for
knowledge sharing. By bringing new issues such as knowledge management into
organization structure theory, this theory might regain some of its lost value.

4. An holistic approach to understanding the changing nature of

organizational structure (Doherty, Champion, & Leitao Wang, 2, 2010)

Objective:-
This article discusses about one of the most debatable & important topic i.e. importance
of IT on organizational structure & mostly about Enterprise Resource Planning (ERP). It is
a well defined technology with low interpretive flexibility.
fl

Key Variables:-
Standardisation, formalisation, Entrepreneur Resource planning

Findings:-
It mostly influences the locus of decision making, standardization & formalization of
working practices and procedures. But it does not consider its impact
impact on span of control,
the degree of horizontal integration, or the number of hierarchical layers. It is difficult to
get an overall view of the impact of IT on organizational structure.

ERP is typically acquired in the form of packaged software, with integrated

integrated modules that
support all major business functions across an organization, such as production,
distribution, sales, finance & HR management. It encourages organizations to streamline
& standardize their business processes across the organization & within wi individual
business units.

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Strategy is also having significant impact on organization’s structure. Results of the

quantitative analyses suggest that the configuration of an organization is influenced by
ERP benefits & strategic orientation. Author has also done quantitative study to
recognize impact of ERP.

Large-scale
scale & successful ERP system is deployed in an organization with a Prospector
orientation, & then there are a most chances that organization will become flatter, the
decision-making
making will be less centralized, level of horizontal integration will increase & its
working practices will become more standardized.

Results of many previous studies say that,

that, an ERP implementation is an extremely
complex & problematic undertaking. ERP has dominant role in reshaping corporate
structure.

Conclusion:-
1. This study gives two valid interpretations that ERP systems will only deliver
benefits in circumstances in which the host organization’s structure is already
well aligned, with the structural models & management teams will only be
prepared to make any significant changes to their organizations’ structure, to
better align it with ERP.
2. This article does not give any particular answer to this debatable topic, but it
mostly says that, it is successful ERP adoption that is driving structural change.

5. Theories of organizational structure and innovation adoption: the role of

environmental change (Damanpour & Gopalakrishnan, 1998)

Objective:-
This article discuss about various theories of Organizational structure & innovation
adaption & their framework within which they are applied. Mostly these theories
focuses on only one dimension i.e. type, radical-ness, or stage-of
of innovation at a time.
But in reality these dimensions are overlaps on each other & for the same reason these
theories produce inconsistent results.

Key Variables:-
Innovation adaptation, environmental change,

Findings:-
In this article, authors also discussed about innovations, its adoption, rate & speed to
adopt it by organizations & its sources like imitative, acquisitive & incubative.

There are three structural theories of innovation:

1. Dual core theory: It distinguishes between

tween administrative and technical
innovations

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2. The theory of innovation radicalness: It discusses about two aspects i.e. variation
(routine) & reorientation.
3. The ambidextrous theory: It discusses about the pre-adoption
adoption activities that lead
to a decision to adopt & the activities that facilitate implementation and
continued use of an innovation

Article also tells that organizations is open systems seek a state of equilibrium with their
environments and its dimensions are extent of stability and extent of turbulence or
predictability. So, the two sets of values for each dimension are stable vs. unstable;
predictable vs. Unpredictable
npredictable. Four environmental sets of conditions: stable and
predictable (EC1), stable and unpredictable (EC2), unstable and predictable
predictab (EC3), and
unstable and unpredictable (EC4).
(EC4) A way to make a framework for above conditions is to
bring together elements of environmental change, organizational structure and
innovation adoption.

Conclusion:-
1. The article gives complex but precise theories by identifying the environmental
conditions under which certain structural characteristics facilitate or hinder
organizational innovation. The framework identifies dimensions of innovation adoption
in each environmental condition. This paper helps to resolve some of the discrepancies
that existed among the three prominent theories of organizational innovation.
2. This article is having some limitations like it is complex in construct. It mostly focuses on
external environment & not on other variables that impact structure–innovation
structure
adoption relationships, such as organizational technology, size and ownership.

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REVIEW OF LEADERSHIP STYLE LITERATURE

1. How Much Time Should CEOs Devote to Customers? (Quelch, 2008)

Objective:-
Customers are the source of all cash flow. Organic growth depends on developing
relationships with new and existing customers. And future growth prospects are baked
into stock market valuations of companies.
companies Thehe current economic downturn, companies
need marketing
rketing skills more than ever. But while every corporate mission statement pays
lip service to respecting customer needs, actual customer expertise is typically a mile
wide and an inch deep.

Key Variables:-

Customer relationships, Consumer behavior, General leadership,, customer satisfaction

Findings:-
"THE CUSTOMER IS GOD AND THE MARKET DECIDES EVERYTHING" is very well known
quote it becomes even more pivotal in situations of economic crisis. But as seen very
few of the CEOs of FORTUNE-500
FORTUNE 500 companies have come up the ranks through marketing
and sales. Every corporate mission statement pays lip service to respecting customer
needs; actual customer expertise is typically a mile wide and an inch deep. To be
customer-oriented,
oriented, executives must get out and meet customers on their home turf—in
turf
their homes, on job sites, in their
t offices.

A good CEO knows how to balance time spent on the outside versus the inside. However
they should consider following three things

• CEO should spearhead the identification of three or four customer health metrics
that are leading indicators of sales or profit performance. These metrics should not
be off-the-shelf
shelf standbys such as customer satisfaction.
satisfaction They must get out and meet
customers on their home turf—in
turf in their homes, on job sites, in their offices.
• CEOs must ensure an adequate pipeline of new product and market opportunities.
This requires the investment in uncovering customer insights discussed above,
either through business leaders regularly going into the field and through more
formal customer research studies.
studies
• CEO has to develop marketing
marketing talent throughout the company. This cannot merely
mean appointing a high-profile
high profile rainmaker as chief marketing officer. It requires the
long-term
term infusion of customer centricity and marketing strategy capability
throughout the organization. Over time, this should mean a higher percentage of
general managers coming up through the marketing ranks.

Conclusion:-
Every CEO should spend at least 10 percent of his or her time taking care of these three
challenges i.e. human touch, customer relationship and . Running around visiting
customers is simply not enough.

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2. Organization development and leadership: R.B. Reid and the dynamics of

success- BRITISH RAILWAYS (Barlow, 1996)

Objective:-
To extract various qualities of leadership style from Reid’s tenure in British railways and
comparison of it with leadership trends in TATA MOTORS.

Key Variables:-
Leadership capacity, delegation of authority, commitment

Findings:-
Reid carried through arguably one of the most fundamental and potentially far-reaching
far
processes of change and organizational development that British Rail (BR) has
experienced in the past 40 years.

Growth in BR’s productivity and financial performance was among the fastest in Europe,
and BR ended that decades one of the most productive and certainly the most profitable
rail networks in Western Europe.BR in before Reid However, the development of road
and air competition and growth in private car ownership had brought about a far more
precipitous loss of BR’s business than could be redressed merely by closing down routes
where traffic could be handled more economically and effectively by road. In a nutshell,
Beeching had sought to identify and mobilize the railways’ distinctive characteristics to
greatest competitive advantage.
dvantage.

Although his plans remained largely in abeyance, they nevertheless remained as an

agenda for regenerative change. His (Reid)
( wide-ranging
ranging experience, Astute, intelligent,
politically aware as well as professionally experienced, Reid knew how to get things done
within the railways’ organization. He also knew what needed to be done. Within two
years, Reid had delivered productivity improvements and cost reductions on a scale that
his predecessors had been unable to achieve

As a professional, he knew
w the railways and their management intimately. He knew what
needed to be done, and how to get it done: he possessed systemic leadership capacity
He also knew how to operate the levers of power.

He induced change built on success,

success rather than to avoid failure. He communicated a
clear vision and was decisive and determined in implementing it. it He set clear,
achievable goals, and expected them to be achieved.
achieved He delegated authority, giving
clear mandates to others along with discretion to achieve results in ways
w which were
most effective. As a result, he created and won the commitment of new coalitions of
professional managers and galvanized support within BR as a whole for the
transformation he brought about.

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This view was endorsed recently by a director of one of the sector businesses, now
disbanded, who summed up Reid’s achievement succinctly: Reid recognised the need for
change. He created a sense of business purpose. He dissolved the Regions and replaced
them with the sectors.. The sector businesses were
were full of people who understood the
industry and the business they were in. Reid got them all pulling in the same direction.
direction
There was a real feeling of achievement and success.

Conclusion:-
• Wide- ranging experience, astute and intelligence and political awareness,
a within
two years, Reid had delivered productivity improvements and cost reductions on a
scale that his predecessors had been Unable to achieve.
• A clear vision & keen to accomplish it & a clear set of goals helped him to develop an
organization structured around identified business sectors and, simultaneously,
running down and eventually eliminating BR’s structure based on geographical
regions.

3. Leadership Types and Styles - Overview of Skills (Hick)

Objective:-
To identify when and where these leadership qualities to be used and how these is
relevant to TATA MOTORS.

Key Variables:-
Autocratic, Delegative /Free Rein, Democratic

Findings:-
Leadership style is crucial to success. We find leadership all around us. Each of us will fill
the role ourselves at various times in our lives. Leadership can be found in the world of
business, sports, politics, religion and as close as home. Leaders must respond to the
rapidly changing world and meet the challenges it demands. There are different types of
leaders and you will most likely encounter many over the course of time. Understanding
different leadership styles and their impact will help you become a more effective leader.

In 1939 famed psychologist Kurt Lewin identified classic styles of leadership. These three
styles are well established though more specific types have been identified since. Leaders
should not be confused with managers.

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Autocratic:
a) What needs to be accomplished, as well as, how and when,
when is the sole responsibility of
the leader.
b) Allow for quick decisions when time is crucial.
c) This is a less creative approach. A "Do what you are told" Obedient and strict form of
control.
d) Use when a group or member doesn't have knowledge of the practice or procedure.
e) The autocratic style works best when there is no need for input. Input will not change
the decision or outcome.

Democratic:
a) The leader acts as a guide. Accepts input and seeks ideas and suggestions through
discussion.
b) Even though the leader may have the final say the team contributes to the process.
c) Democratic style can be problematic when the final decision is hampered by a wide
range of opinion.
d) People are more committed when involved in the process of making decisions. They
have a personal stake in the outcome.
e) This style is mutually beneficial and helps improve people skills.

Delegative/Free Rein:
a) Minimal in direction.
b) Allow decision-making
making by the team.
c) Works well when the team or a member is more knowledgeable about the subject.
d) This style
le works best with highly motivated and well trained people.

Leaders are always managers but the reverse is not necessarily the case. case Good leaders
will use the style or a combination of styles that best fits the situation. Leadership style is
crucial to success. We find leadership all around us. Each of us will fill the role ourselves
at various times in our lives. Leadership can be found in the world of business, sports,
politics, religion and as close as home. Leaders must respond to the rapidly changingchangin
world and meet the challenges it demands. There are different types of leaders and you
will most likely encounter many over the course of time.

Conclusion:-
Leaders should not be confused with managers. Leaders are always managers but the
reverse is not necessarily the case. Good leaders will use the style or a combination of
styles that best fits the situation.
situation

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4. A dynamic theory of leadership Development (Mostovicz, Kakabadse, & Kakabadse, A

dynamic theory of leadership developement,
develope Vol. 30 No. 6, 2009)

Objective:-
The paper examines selected leadership literature through the lens of theory building-
building
blocks. It identifies the role of the ideal goal in leadership and its importance in
developing the psychological aspect of leadership.

Key Variables:-
Leadership, Leadership development

Findings:-
The paper posits that leadership is a developmental process, which is based on the
type of choice a leader
eader makes. While choice implies that two good options are always
available from which to select, one should make choices in accordance with the
leader’s worldview, looking for affiliation (i.e. the Theta worldview), or looking for
achievement (i.e. the Lambda
Lambda worldview). Consequently, leaders need to recognise
that the choices they make for organisational activities have to fit their own
worldview. Pursuing the fit between one’s worldview and planned organisational
activities ensures that leaders continuously
continuously improve their ethical behaviour. The paper
concludes with the presentation of a dynamic theory of leadership, which is based on
the assumption that one can only strive toward truly ethical leadership with the
knowledge that this goal is beyond human capacity.

Leadership has examined three different phases within the leadership timeline: the
past, the present, and the future. Leadership
Leadership is about making choices. The choice
c is a
binary action that divides options into two sets, the desired and the undesired
undes ones,
according to a higher principle or value.

Conclusion:-

The paper conceptualises that leadership quality develops by making choices

according to the following two world views:
1. Theta model- Socially oriented
2. Lambda model-
model Personally oriented

Thus keeping with either of the two world view a leader keeps on making choices.

These choices create memory based on which leader take decisions for future. Thus
leadership that was historically considered to be either as purely in born quality or
as purely a learned behaviour is now known to be a Dynamic leadership
development process. This means that an Ideal leader does not exists but a leader
always strives to achieve ideal ethical behaviour continuously.

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This paper puts the views on dynamic theory of leadership,, which is based on the
assumption that one can only strive toward truly ethical leadership with the
knowledge that this goal is beyond human capacity.
capacity

5. Transformational versus servant leadership: a difference in leader focus (Stone,

Russell, & Patterson, (2004,Vol. 25 No. 4))

Objective:-
This article examines transformational leadership and servant leadership to determine
what similarities and differences exist between the two leadership concepts.

Key Variables:-
Leadership, Transformational leadership, Influence

Findings:-
The transformational leader’s focus is directed toward the organization, and his or her
behaviour builds follower commitment toward organizational objectives, while the
servant leader’s focus is on the followers, and the achievement of organizational
objectives is a subordinate outcome. The extent to which the leader is able to shift the
primary focus of leadership from the organization to the follower is the distinguishing
factorr in classifying leaders as either transformational or servant leaders. This article
also looks at the next stage of developmental issues in servant leadership, such as the
challenges facing empirical investigation and measurement, and the changes that are
occurring in current thinking about the servant leadership approach.

The primary premise of the article is that transformational leaders tend to focus more
on organizational objectives while servant leaders focus more on the people who are
their followers. Transformational leaders transform the personal values of followers to
support the vision and goals of the organization by fostering an environment where
relationships can be formed and by establishing a climate of trust in which visions can
be shared. Idealized influence is the charismatic element of transformational
leadership in which leaders become role models who are admired, respected, and
emulated by followers. Transformational leaders inspire and motivate others by
“providing meaning and challenge to their followers’ work” The leader inspires
followers to see the attractive future state, while communicating expectations and
demonstrating a commitment to goals and a shared vision. Idealized influence and
inspirational motivation are usually combined to form charismatic-inspirational
charismatic
leadership.. Similarly, the Transformational leaders play a vital role in Intellectual
stimulation of employees, Individualized consideration,

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While servant leadership is an increasingly popular concept, throughout much of its

history the concept has been systematically undefined and lacking in empirical
support.

Conclusion:-
Both transformational leaders and servant leaders are visionaries, generate high levels
of trust, serve as role models, show consideration
consideration for others, delegate responsibilities,
empower followers, teach, communicate, listen, and influence followers. Certainly,
transformational leadership and servant leadership are not antithetical theories.
Rather, they are complementary ideologies because
because they both describe excellent
forms of leadership. Nonetheless, there are significant points of variation in the
concepts. Most importantly, transformational leaders tend to focus more on
organizational objectives while servant leaders focus more on the th people who are
their followers.

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Current organizational
rganizational Structure of TATA Motors

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COMPARISON & CONCLUSION

TATA Motors with
ith Organisation Structure

As per article relating organizational structure & climate with knowledge management,
organizational climate plays an important role on employees’ behaviour.
behaviour The same concept
held true in case of Tata motors. They are having frequent interactions with their employees
& workers, formally & informally which helps employees to feel more bounded with
organization. Also, it helps in gathering & sharing the knowledge. As Tata motors is having
relatively flat structure, it helps them in easy interaction between various level in structure
which improves knowledge & ideas sharing within organization.

One of the article talks about product customization & organization. It also talks about span
of control & levels in structure. As Tata motors is also operates with less levels of
organizational structure, it is having narrow span of control. Article also relates
environmental uncertainty with product customization. But for Tata motors, how
environmental uncertainty effects product customization is not so clear. In decentralization,
the main Tata group has command over Tata motors, but all strategic actions & plans are
taken by board of directors of Tata motors itself.

Other paper defines various impacts of organizational structure dimensions on knowledge

sharing. One of the dimensions is formalization & it defines
defines specific role & duties for
employees, their responsibilities. In Tata motors, they follow Tata code of conduct &
authority matrix which helps them to identify different responsibilities and decision
making powers of an individual both functionally and financially.
financially. Other dimension is
coordination. In Tata motors, they are having newsletters and house magazines
published monthly for each division and are circulated though out the company. Also
regular emails/correspondence from Chairman, MD and CFO are circulated circ on
regular basis. The higher level management is always accessible to the lower level.
This helps them to gather, share & spread the knowledge & ideas very easily from
level to level.

In today’s world of computerization all the activities are need to be computed and all
the data is to be maintained precisely to take the major management decision.
Based on this data all the activities of the all departments like production,
manufacturing, purchase, finance, operations, etc can be interlinked. Thus the th article
gives the importance of Information Technology on organizational structure &
mostly about Enterprise Resource Planning (ERP). During the initial years in 90s,
TATA Motors was not having any efficient software that will monitor all the activities
of the organization. Nowadays, the TATA Motors is using various software like for
ease of all these activities like ERP & SAP also various design software like CATIA, UG,
AUTO CAD, etc.

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This enables TATA Motors to be more efficient in delivery, payments,

payme order
execution, as well as in maintaining in-house
in house inventory as well as ware house
inventory management systems. The company has become one of the best in the
supply chain management system due to incorporation of these IT solutions.

All the departments

ents of TATA Motors are interconnected with intra networking
system, as well as all the divisions are connected with internetworking system. This
enables the easy and fast flow of information among the employees, management
including the board of directors,
directors, vendors, suppliers. The company is publishing
various articles, newsletters about the wellbeing of the employees, promotions,
deaths, etc periodically. This keeps all the employees to be connected to the
organization all the time and gives them the latest
latest updates and happening in and
around organization.

In one paper, it mostly focuses on innovations and how it helps to improve

organizational structure and its stability. In Tata motors, they also focuses on
innovations, as likely said in introduction company
company has introduced various innovative
models in market and they became a boom. For example, Tata Nano, it is a dream of
its chairman Mr. Ratan Tata, to make a car for middle class families in Rs. 1 lakh. and
they launch it in market successfully and it creates
creates a blast in automobile industry
worldwide. Also, other models like Tata Ace, these are firstly India's first
indigenously developed mini-truck
mini truck & Tata Magic is one of its own kinds. This type of
innovations creates some kind of spirit to work for organizationorgan with full
responsibility and enthusiasm, sense of belongingness towards organization. All the
officers as well as employees of Tata motors started feeling ‘Nano’ as their own
project. Due this reason, Mr. Ratan Tata was able to deliver his dream in reality
within stipulated time period. Research and Development department of Tata
motors is working continuously on designing and developing new innovative product
range. Various joint ventures of the company also working for the same goal like
Jaguar, Land
and Rover, Fiat, Xenon, etc. These practices help company to strengthen its
organizational structure.

TATA Motors with

ith Leadership Style

The group chairman Ratan Tata is responsible for transforming Tata Motors Ltd. into
a Group strategy think-tank
think and a promoter of new ventures in high technology
businesses. His vision of making a truly international company brought in a foreign
CEO. As per one of the paper there is no such ideal leader rather one evolves as an
ideal leader with experience. Initially his decisions were criticized but now he is
assumed to be one of the best in the world. He is currently part of 203 board
members in 20 different organizations across 23 different industries.

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Earlier Tata Motors was seen as a sleepy company. Its products were
were dependable but
few said they’d buy their cars for personal use. Its trucks were also bought for price
first. Reliability was a lesser consideration. But since then the company has had a
slew of successful launches – the Indica Vista, the Manza, its range of world trucks
(and the Nano). It has also gone and bought a Spanish bus maker, Hispano Carrocera.
During this time Tata Motors has also realised it needs to globalise aggressively. The
man leading the charge is Carl-Peter
Carl Foster who was in charge of General Motors’
European operations and he is trying to internationalize the company in true sense.
Every plan in the company is first evaluated under Enterprise Risk Management
team. The parent group doesn’t have much control over the TATA motor and it’s it the
CEO of the company who is the boss. He draws a hefty salary of over 34 lakh plus
bonus and incentives per month and is on a contract period of three years. He is a
true leader with a clear vision of bringing TATA motors on international grounds. He
pays a lot of focus on R&D. He can be said as a leader first while the group chairman
can be said to be servant first. Both this styles are complementary to each other.

Before Mr Forster joined this company, reported its first annual loss in seven years
in the year ended March 2009, since then he has been doing a fairly good job
continue to increase sales while simultaneously cutting costs. He doesn’t spend too
much time with the end customers but addresses the whole company quarterly.

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ANNEXURE
1. Correspondence with Interviewee
I

Communication from group member to interviewee through e-mail

e

Reply from interviewee to group member through e-mail.

e mail. (The interview date was rescheduled by
the official to 25/8/2010 over phone)

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We conducted the second

ond interview telephonically with Mr Rakesh Kapoor , Deputy Manager
(Product Development – Electricals) Pune on 29th August 2010 at 1530 hrs.

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2. Interview Questionnaire

1. What are the organization’s goals and Mission?

Vision

"Best in the manner in which we operate, best in the products we deliver, and best in
our value system and ethics.“

Mission

“To become a world class automotive engineering and product development centre,
centre
and enable Tata Motors to become a world class automotive company.”

2. How many divisions does TATA Motors have? Are the Divisions of the organization
based on geographical situation or based on products differentiation? Or is it a mix
of both?
TATA MOTORS has a mixed organizational structure. There are two main divisions
based
sed on product type viz Commercial vehicle division and Passenger cars division.
Both these divisions have been subdivided as per geographical location into north
south east and west zone.

3. What are the opportunities to get promoted over the years? What is the career
progression program/policy deployed in TATA Motors?
There is a very great scope of growth along with the company. On an average a
normal middle level employee is promoted every 3-53 5 years. An employee with
exceptional record and good performance
performance is promoted on an average of two years.

4. How much support is made available to individuals for professional development

such as – professional
ofessional courses, seminars and trainings, higher education?
Tata does provide research opportunities. It encourages research based projects. It
has tie ups with various universities. Scholarship of 50% up to 100% is provided by
the company for higher education.
education. They also have in house training programs.

5. Who decides the work distribution? And How?

The work is distributed in based on strategic activities or operational/routine
assignments. The strategic level activities are taken up by top management. The
operational activities are distributed to middle and lower level. This becomes the
base of their yearly performance appraisal.

6. Are new ideas from employees welcomed? If an idea is found good enough then is
it implemented?
Yes new ideas are welcomed from the employees and they are rewarded suitably.
They have a suggestion boxes to invite new ideas. Few ideas have also been

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implemented. (When asked very trivial example was given, like change in shape of
envelope).

7. How much control of parent company is there on TATA Motors?

TATA Motors is more or less independent. All the strategic decisions are taken by
Board of directors of TATA motors.

8. What is the reporting procedure and flow?

flow

9. How often management interacts with employees?

The management interact with the employees on a regular basis. The chairman
addresses the whole company thrice a year, MD visits each division quarterly.
Accordingly the lower management have meeting with employees on day to day
basis.

10. How often different departments comes together

together and at what level?
Every month there is a ManCom meeting. Apart from that there are various cultural
activities throughout the year.

11. Is the interaction among employees (at different posts) only limited to formal
levels or interaction is there on personal level also?
The functional group meets thrice a year for a cultural event with families. The
welfare association conducts various activities throughout the year which involves
employee and their family including different sport activities.

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PGDIE 40, NITIE Mumbai

12. Is there any difference in working styles of an Indian CEO and a Non Indian CEO?
No, there is no much difference in their working.

13. How the span of control of managers at TATA Motors?

At corporate level the span of control varies from 1:5 to 1:7. While at the
t middle and
lower level management it varies as 1:10. This indicates that the organisational
structure is somewhere between flat and hierarchical structure.

14. To what extend decision making power given to a department? How much does
the top level interferee in working within a department?
Each employee is bound by TATA Code of conduct and authority matrix which clearly
identifies different responsibilities and decision making powers of an individual both
functionally and financially.

15. In general, in TATA Motors,

Motors, whether the managers act as a mentor to their
colleagues/juniors?
Yes, they have a mentoring program which enables each employee to empower
themselves in the functional areas.

16. How the organisation communicates effectively with the employees? How long lo
does it take for a message to reach from top of the organization to bottom and vice
versa?
They have newsletters and house magazines published monthly for each division and
are circulated though out the company. Also regular emails/correspondence from
Chairman, MD and CFO are circulated on regular basis. The higher level management
is always accessible to the lower level.

17. What practices do you implement during conflicts? Have you ever had to make a
decision without knowledge of all the needed data?
In case of conflicts the action plan is chaired by top management.

18. How do you approach complex problems? Like In case of NANO’s Singur Plant,
what factors prompted to cancel the project there in spite of huge investment
already incurred?
They have an Enterprise
ise risk management (ERM) team that studies and evaluates
different aspects of any occurrence on operational, functional and strategic
background.

19. Is TATA Motors a product oriented organization or people oriented organization?

TATA Motors is more of a product oriented organization.

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LOG OF VISIT
Whom visited
1. Mr. Rajesh Aidoor,
GM (Internal Audit & ERM)
TATA Motors Limited
4th Floor, One Forbes,
1 Dr VB Gandhi Marg, Fort
Mumbai – 400 001
2. Rakesh Kapoor
Deputy Manager (Product Development – Electricals)
R&D Department, Pune
Tata Motors
Pune - 411033

Who Visited
1. Sumit Guha
Roll no: 104, PGDIE 40
Batch of 2012
National Institute of Industrial Engineer (NITIE)
Mumbai

2. Sunit Mhasade
Roll no: 105, PGDIE 40
Batch of 2012
National Institute of Industrial Engineer (NITIE)
Mumbai

When Visited

First Interview
Date : - 25th August, 2010
Time : - 1700 Hrs
Venue : - TATA Motors Limited (Corporate Office)
4th Floor, One Forbes,
1 Dr VB Gandhi Marg, Fort
Mumbai – 400 001

Second Interview
Date : - 29th August, 2010
Time : - 1530 Hrs
Nature : - Telephonic

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