TATA GROUP

Report

Submitted To:
MR.MUBASHIR MALIK
Submitted By:
RAMEEZ SHAHID
&
MASOOD SADIQ
Department of Business
Administration
UNIVERSITY OF LAHORE
 LAHORE
Introduction:

The Tata Group (Hindi: टाटा समूह) is a multinational conglomerate company

headquartered in Mumbai, India. In terms of market capitalization and revenues, Tata

Group is the largest private corporate group in India and has been recognized as one of

the most respected companies in the world.[3][4] It has interests in steel, automobiles,

information technology, communication, power, tea and hospitality. The

Tata Group has operations in more than 85 countries across six continents and its

companies export products and services to 80 nations. The Tata Group comprises 114

[5]
companies and subsidiaries in seven business sectors , 27 of which are publicly listed.

65.8% of the ownership of Tata Group is held in charitable trusts.[6] Companies which

form a major part of the group include Tata Steel, Corus Steel, Tata Motors,

Tata Consultancy Services, Tata Technologies, Tata Tea, Titan

Industries, Tata Power, Tata Communications, Tata Teleservices and the

Taj Hotels.The group takes the name of its founder, Jamsedji Tata, a

member of whose family has almost invariably been the chairman of

the group. The current chairman of the Tata group is Ratan Tata, who

took over from J. R. D. Tata in 1991 and is currently one of the major

2
international business figures in the age of globality.[7] The company is

[8]
currently in its fifth generation of family stewardship. The 2009

annual survey by the Reputation Institute ranked Tata Group as the

11th most reputable company in the world.[9] The survey included 600

global

Brief History:

The foundation of what would grow to become the Tata Group was laid

in 1868 by Jamsetji Nusserwanji Tata — then a 29-year-old who had

learned the ropes of business while working in his father’s banking firm

— when he established a trading Company in Bombay. A visionary

entrepreneur, an avowed nationalist and a committed philanthropist,

Jamsetji Tata helped pave the path to industrialization in India by

seeding Pioneering businesses in sectors such as steel, energy, textiles

and hospitality Empress Mills, a textiles venture set up in Nagpur in

central India in 1877, was the first of the big industrial projects

undertaken by the Tata Group. Jamsetji Tata was by this time, though,

already gripped by what would the three great ideas of his life: setting

up an iron and steel company, generating hydroelectric power and

creating an institution that would tutor Indians in the sciences None of

3
these ideas would come to fruition while Jamsetji Tata lived, but they

were realized in full measure by those who followed him. he most

dazzling of the Tata enterprises that came into being during Jamsetj

Tata’s lifetime was the Taj Mahal Hotel in Bombay, which opened for

business in 903. Legend has it that Jamsetji Tata set his mind on

building it after being denied entry into one of the city's fancy hotels

for being an Indian today, the Taj Group of Hotels is a byword for

luxury and quality, with standout Properties across the world the most

dazzling of the Tata enterprises that came into being during Jamsetji

Tata’s lifetime was the Taj Mahal Hotel in Bombay, which opened for

business in 1903. Legend has it that Jamsetji Tata set his mind on

building it after being denied entry into one of the city's fancy hotels

for being an Indian Today, the Taj Group of Hotels is a byword for

luxury and quality, with standout Properties across the world In 1911,

seven years after his death, Jamsetji Tata’s long-cherished dream of

Establishing an institution where Indians could cultivate their scientific

temper was realized. The Indian Institute of Science, set up in

Bangalore, would nurture some of the brightest minds in India. In

1911, seven years after his death, Jamsetji Tata’s long-cherished

dream of Establishing an institution where Indians could cultivate their

scientific temper was realized. The Indian Institute of Science, set up

4
in Bangalore, would nurture some of The brightest minds in India It

was the first of a clutch of centers of learning and research that would

come up with the substantial and steadfast support of the Tata Group

It was the first of a clutch of centers of learning and research that

would come up with the substantial and steadfast support of the Tata

Group.

Tata products and services for consumers

Agriculture Appliances Automobiles

Beverages Charter flights Crockery
DTH television Financial services Food
Holiday homes Hotels Housing
Jewellery Leather Retail
Solar appliances Telecommunications Watches and clocks

1-Corporate Social Responsibility Objective and

Measure:

Tata Power is committed to setting high standards in its pursuit of

social responsibility and remaining sensitive to the issues of resource

Conservation, environment protection and enrichment and

Development of local communities in its areas of operations. The

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company has a simple philosophy that guides its activities in these

matters, “Giving back is a means towards going ahead”. Our

widespread programmers on biodiversity conservation, a forestation,

Pisciculture, family planning, health services, primary and secondary

education and many more have made inroads into the tiny hamlets

and tribal regions of our Hydro catchments areas and it is our

endeavor to light up these dark and narrow Streets to new dawns.

The mission of the Tata Technologies Corporate Social Responsibility

program is to make a positive impact on the communities in which the

company does business through its support of select programs,

outreach efforts and initiatives that improve and enhance the quality

of life. Our goal is to make things better for the planet, better for

people, better for business, better now, better for the future. Tata

Technologies: BETTER & BETTER™

 Community Network Services

 Macomb Homeless Coalition

 Environmental Stewardship

 Susan G. Komen for the Cure

 Singapore Student Project on Racial Harmony

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  Asia Pacific Blood Donor Drive

 Road Safety in India

 First Book

 Mount Saint Vincent

 Coats for Colorado

 Cyber Safety

a) Community Network Services:

Community Network Services Inc. (CNS) is a private, non-profit

human agency that provides comprehensive health and social services

to nearly 3,000 individuals in Oakland County, Michigan, home of the

Tata Technologies North American Headquarters facility. Tata

Technologies participates in the annual “Adopt-a-Family” program in

the months of November and December, to coincide with the

Christmas holiday season in the United States. Professionals collect

funds, shop for and wrap gifts for underprivileged families seeking help

through CNS. The gifts and contributions are traditionally presented at

the Tata Technologies Holiday Luncheon in December in Novi. To learn

more about Community Network Services, including how to volunteer

time or donate funds

b)Macomb Homeless Coalition:

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The Macomb Homeless Coalition (MHC) is an umbrella association of

providers of shelter and supportive services in Macomb County,

Michigan, a community neighboring the Tata Technologies North

American Headquarters facility. Two annual efforts on behalf of MHC

are the focus of Tata Technologies: Homeless Connection Day – Held

each January to help needy individuals find housing, employment,

food, clothing, health care and emergency shelter. Tata Technologies

professionals volunteer time, technical support and computers on-site

as resources throughout the event. Warming Center Support –

Throughout each winter, MHC coordinates temporary shelter with

warming centers at local churches and community centers. Tata

Technologies supports this effort through the collection of funds and

personal care items including socks and bedding. To learn more about

MHC and to support its effort

c)Environmental Stewardship:

Here days, 60 miles, countless blisters and thousands of dollars. That’s

the bottom line for Tata Technologies professionals who participate

every year in the Breast Cancer 3-Day event in metropolitan Detroit,

8
benefiting Susan G. Komen for the Cure and the National Philanthropic

Trust Breast Cancer Fund. The Tata Technologies team - professionals,

their friends and family members - raised more than $15,000 in

metropolitan Detroit over the past two years. Participating teams walk

60 miles over a long weekend, supported by community volunteers

who provide overnight camping facilities in bright pink tents, hot

meals, showers, entertainment, safety, medical support and, most

importantly, encouragement. To learn more about the 3 Day and

Susan G. Komen for the Cur

d)Susan G. Komen for the Cure:

Three days, 60 miles, countless blisters and thousands of dollars.

That’s the bottom line for Tata Technologies professionals who

participate every year in the Breast Cancer 3-Day event in

metropolitan Detroit, benefiting Susan G. Komen for the Cure and the

National Philanthropic Trust Breast Cancer Fund. The Tata

Technologies team - professionals, their friends and family members -

raised more than $15,000 in metropolitan Detroit over the past two

years. Participating teams walk 60 miles over a long weekend,

supported by community volunteers who provide overnight camping

9
facilities in bright pink tents, hot meals, showers, entertainment,

safety, medical support and, most importantly, encouragement. To

learn more about the 3 Day and Susan G. Komen for the Cur

e)Singapore Student Project on Racial Harmony:

Singapore is well-known for its multi-racial, multi-religious society.

While ethnic Chinese are the largest group, the country’s population

includes significant communities of ethnic Malays, Indians, Eurasians

and others. Tata Technologies was pleased to have the opportunity to

support and promote cultural tolerance by sponsoring a two-day camp

for upper primary students from every race, tagged “Search Those

Roots!” During the March 2008 program, children were given hands-on

opportunities to learn more about one another’s cultures, languages,

religious practices, pastimes and even favorite foods. The event was

conceived and organized by a group of senior high school students as

part of their own Leadership Development Program.

f)Asia Pacific Blood Donor Drive:

Tata Technologies encourages its professionals to participate in various

social events organized by non-profit organizations, non-governmental

10
Organizations (NGOs) and charitable institutions that contribute to the

social good. In keeping with this spirit, Tata Technologies organizes

blood donation camps at its Center for Advanced Engineering and

Design in Hinjawadi, Pine; at Tata Motors, Pimpri; and at other

locations throughout India and the Asia Pacific region.

g)Road Safety in India:

Safety Ryodan in India and the Asia Pacific region has conducted

special Road Safety Drives in support of festivals and special events.

The Road Safety Drives have focused on traffic and pedestrian

management involving up to 100 volunteers - as well as a street play

campaign involving up to 10 volunteers targeting youngsters. More

than 100 volunteers from Tata Technologies went through a volunteer

training program conducted by the local traffic department that

provided key insights on traffic and

h)First Book:

The Tata group encourages its group companies to support First Book,

a non-profit organization with a single mission: to give children from

low-income families the opportunity to read and own their first new

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books. First Book provides an ongoing supply of new books to children

participating in community-based mentoring, tutoring, and family

literacy programs. Founded in 1992, the First Book model was

developed to leverage the work of local heroes who reach children

through existing literacy programs in a variety of settings, such as

Head Start centers, libraries, soup kitchens, churches, housing

projects, and after school initiatives. To learn more, or to get involved

i)Mount Saint Vincent:

Since 2001, Tata Technologies has hosted a variety of events year-

round for the children of Mount Saint Vincent’s, based in Denver,

Colorado, U.S. and founded in 1883 by the Sisters of Charity of

Leavenworth as an orphanage. One very special event is the Annual

Christmas Party sponsored by the company and very generous staff

donations of money and time to put on a great party, sometimes the

only Christmas these children experience.

In 2005, Tata Technologies donated funding for the contents of an

entire classroom at the new school that was being built, and Tata

Technologies professionals consistently volunteer on boards and with

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other activities at the school. Mount Saint Vincent is currently a

residential and day treatment center for boys and girls, ages five to

fourteen and in 1997 it began to offer services for children as young as

three. To learn more about Mount Saint Vincent

j)Coats for Colorado:

This past winter, Tata Technologies professionals initiated a campaign

to be part of a local-to-Colorado, U.S. non-profit coat drive. In

conjunction with Dependable Cleaners and KMGH-TV, a local news

station, Tata Technologies professionals dug deep into the closet and

donated dozens of coats for people in need throughout Colorado. Coats

for Colorado is believed to be the U.S.'s largest per capita coat drive.

Since the program's inception in 1982, over 1.5 million coats have

been distributed, and last year, more than 80,000 coats were donated

to people and non-profit organizations in need. For more information

k) Cyber Safety:

TATA Technologies was actively involved in "Cyber Safe Pine 2009" a

three-day awareness campaign on cyber safety and security issues for

clients, industry, academia, and other stakeholders. The campaign

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addressed issues of information security, cyber crime, cyber security,

best practices and preventive measures. The National Association of

Software and Services Companies - Data Security Council of India

(NASSCOM - DSCI) organized the campaign under the Cyber Security

project sponsored by the Department of Information Technology,

Ministry of Communications & Information Technology, and

Government of India. The program is part of a larger "Trusted

Sourcing" initiative to strengthen India's regulatory framework and

reinforce India's appeal as an outsourcing destination.

Tata Steel Benchmark in Corporate Social

Responsibility

Jamshedpur: A study on 'Benchmarking Corporate Social Responsibility

Activities', by the Gas Authority of India Limited (GAIL), finds Tata

Steel creating a benchmark in corporate social responsibility (CSR).

The study has been based on 'Organization Dynamics'. The purpose of

the study was to identify the best practices in CSR activities available

in Tata Steel, and to enable GAIL to undertake the interventions more

effectively and in a more focused manner. Tata Steel is a pioneer in

the concept of CSR. It believes that the loyalty and commitment of its

employees depend upon the quality of life they are provided with at

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work and at home. Consistent with the group purpose, Tata Steel has

declared in its vision statement that it will constantly strive to improve

the quality of life of the communities it serves through excellence in all

facets of its activities. The company has received a number of awards

in recognition of its CSR efforts. The most recent testimony to Tata

Steel's contribution is The Energy & Resources Institute (TERI) Award

conferred on it in recognition of corporate leadership for good

corporate citizenship and sustainable initiatives. Tata Steel is the only

Indian company to have pledged to translate the Global Compact

principles on human rights, labor and environment into practice. It was

conferred the Global Business Coalition Award for Business Excellence

in the Community for HIV /AIDS. Over the years, the nature of the

company's involvement with the community has undergone a change.

It has moved away from charity and dependence, to empowerment

and partnership. The many facets of Tata Steel's efforts are medical

and health services in the rural and semi-urban areas, sports,

women's health and education, water harvesting and tribal

development, relief and rehabilitate.

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 2-CORPORATE Social Responsibility Strategy

and Resources Implication:

Tata strategy management Group:

Tracking the Customer’s Need

In order to achieve higher profitability and market share, companies

should adopt a needs-centric marketing approach and design marketing

initiatives, product offerings and services around customer needs, say

Harsha Kapoor, practice head, analytics, and Rituparna Dasgupta,

associate consultant, of Tata Strategic Management Group. The m arket

place evolves constantly and keeping

abreast of changes and pleasing the

customer Becomes a huge challenge for companies. Addto this the fact

that customers today are more Knowledgeable, conscious and

demanding, and it is easy to see why traditional marketing approaches

Centered around products, campaigns and a supply Chain are proving

to be inadequate in achieving the Strategic goals of companies. In

today’s market, a ‘one size fits all’ approach will show considerable

shortfalls. When products are not aligned to customer needs, it results

in wasteful marketing expenditure, accompanied by low conversions

and early attrition, due to incorrect targeting. Companies would do

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Much better to use needs-
centric marketing approach (NCMA) that

helps in increasing market share and revenue. NCMA involvesderiving

customer insights, identifying customer segments, prioritization and

selection of customer segments, and identifying the right marketing mix

to m eet their needs to enhance business perform ancethe

andcompany’s

objectives.

Identify Customer Needs:

The first step is to segment customers into Hom ogeneous groups based

on their needs and buying

Behavior. A myth in the mindset of most

Indian Companies is that demographic data is a necessity for

Meaningful segmentation. In fact, demographic Segmentation might be

misleading at times as it couldbe possible that the needs of a 25-year-

old customer are the same as that of a 50-year-old. By using NCMA,

all customers with similar needs and buying behavior would belong to

the same group. This would enable companies to first identify varying

clusters of needs and then address them differently.

Example 1: A leading provider of telecom services in India wanted to

increase revenues by launching a new range of value-added services.

They deployed a product-centric marketing approach wherein they

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Targeted subscribers in the age group of 25-35 years. However,

response rates were much lower than expected. To the company’s

surprise, there was a sizeable number of enquiries from subscribers

who were not in the target age group. The management was quick to

realize that they were selling the product to the wrong subscribers and

thereby missing out a large number of potential customers. A careful

analysis of their customer call database revealed the distinct calling

patterns of subscribers. Now, the company has segmented their

subscribers into different groups based on their calling patterns and

needs, rather than demographics. Each segment represents unique

calling behavior and subscriber preferences. Coupled with external

data, segment insights help the company identify subscribers who

actually have a need for the new product.

Example 2: A financial services provider in India wanted to increase

market share by improving its renewal business and cross-selling

strategy. Analysis of historical transactional data helped identify

investors’ behavioral patterns and financial needs. Focus group

discussions with relationship managers and intermediaries further

strengthened the results of the analysis. The company segmented its

investors on the basis of their needs rather than on demographic

criteria like geography and age profile. Each investor segment

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Represented a preferred investment portfolioalong with a set of

expectations from the financial services provider. Such investor

insights served as building blocks for a strong needs-centric marketing

strategy. Thereafter, the com pany was able to target

right
theinvestors with

the right product offering through the right intermediaries. It achieved

a competitive advantage over other players by adopting NCMA rather

than the traditional demography-based targeting approaches.

Assess potential and choose segments:

Once customers are segmented and their needs identified, the next

step is to assess their growth potential. A particular segment might be

currently small in size, but might have immense growth potential

depending on the influence of mega trends like digitization,

globalization, etc. Evolution of new technologies might radically alter

the growth of certain segments. Based on the growth potential,

customer segments can be evaluated and prioritized so that a selection

can be made for focused attention. Example: A European food and

grocery retailer studied the impact of market and macro- economic

trends on its customer segments. It broke the mega trends in

consumer trends and derived the implications for each segment. New

living conditions and technology developments were expected to

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Influence customer buying behavior and preferences, leading to new

needs. With trends towards a more demanding work environment and

a stressful lifestyle, the health-conscious segment and the easy usage

and convenience segments were expected to witness sizeable growth.

The retailer took into consideration the growth potential, competitive

intensity, strategic fit feasibility to serve and profitability to priorities

and choose segments for core and secondary focus.

Meeting customer needs:

Once target groups have been identified, m eeting their needs effectively

becom es the challenge. Segm ent-

specific initiatives or actions need to be

designed as customer needs are different for different segments. A

particular segment might be price-sensitive whereas another might be

willing to pay for quality. Identifyingthe right marketing mix for each

segment becomes crucial. The marketing mix would spell out the right

pricing, the right product, the right place and the right promotion

strategy that would optimize the return on marketing investment.

Example 1: A leading Indian automobile manufacturer aiming to

increase market share identified its customer needs and growth

potential. However, the challenge was to target them effectively.

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A thorough diagnosis of the company’s marketing and selling

Processes revealed that the dealers were not communicating to the

customers correctly. Often the product met customers’ needs but this

was not conveyed effectively by the dealer. The company worked on

the communication aspect and organized an extensive training

programmed for dealers. Communication improved significantly and so

did the results.

Example 2: A European retailer had developed a unique customer

segment — one that bought pet food and accessories along with party

festival items. They noticed that purchase of disposable plates, glasses

and decorative items for Christmas / Halloween parties drove the sales

of pet accessories and pet food. This implied that customers belonging

to this particular segment would generally pick up an item for their

pets as and when they shopped for a party. This insight helped the

retailer redesign its store pangram and it reported increased revenue

by displaying pet accessories and pet food near party items.

Benefits of NCMA

NCMA’s numerous benefits, in itself as well as compared to other

traditional marketing approaches, are outlined below: Creates better

understanding of customer needs, preferences and factors influencing

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Customer purchase decisions. Establishes a one-to-one relationship

with the customer for a more personalized customer experience.

Enables development of products or service offerings that the

customer needs or prefers to buy. Increases market share and

revenue by serving customers with products aligned to their needs.

Saves wasteful marketing expenditure on customers who don’t have a

need for certain products. A needs-centric marketing approach is

feasible in the Indian context. It enables a company to use customer

insights to identify and effectively target segments based on needs.

This can enhance market share and / or lower spending and potentially

redefine market leadership rankings. In the current competitive

climate, NCMA can provide the crucial edge to outperform other

players.

IMPLICATIONS

The accumulation of acquisition opportunities risks derailing the focus

on the core business. In 2003, Ratan Tata first mentioned his dream of

building a INR 100,000 (about US $2,500) car– the cheapest, by far,

ever made. If the Nano is a success when it goes on sale in the second

half of 2008, it will herald the emergence of Tata Motors on the global

auto scene, mark the advent of India as a global centre for small-car

production and represent a victory for those who advocate making

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cheap goods for potential customers at the 'bottom of the pyramid' in

Emerging markets. With this background, it is not surprising that

pundits rumbled in summer 2007 when Tata Motors joined the bidding

for two of the world’s most luxurious brands, UK-based Jaguar and

Land Rovers. 44 In short, the question is whether winning trophy

brands is a correct strategy when the ultimate objective is to gain the

appropriate production scale and technology to be the world’s lowest-

cost car producer. Second, integration issues are responsible for the

relatively high failure rate of international M&As (Bruner 2005). 45 The

2006/07 annual report of VSNL lists integrating acquisitions, managing

operations in diverse international locations and changes in the local

regulations as critical risks for the success of the company’s plans. The

Tata companies have tried to develop an ability to understand the

culture of the country where the acquisition takes place, as well as the

Working environment in that country, as a strategic tool for skilful

handling of post-merger issues. In the recent Chorus combine, a

Strategic and Integration Committee (SIC) chaired by Ratan Tata has

been formed to facilitate integration and create a virtual organization

across the combined businesses. The obvious paradox is that the

emphasis on collaboration rather than controlling as the adaptive

model may make it more difficult to keep the distinctiveness of the

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Tata Equity Brand. In fact a crucial issue being debated within Tata is

To what extent a group strategy, including a country-specific one, is

needed to maintain a modicum of coherence. In South Africa and, to a

Lesser extent, Bangladesh, Tata seems to be looking at opportunities

for diversification into prima facie unrelated businesses along the lines

of the home country trajectory nothing like this is in the United

Kingdom, although no fewer than 18 Tata companies operate there

and generate US $1.6 billion in sales in 2006-07. 48 Although not

explicitly stated, the reason may be that conglomeration has

advantages in a developing country context and not in an industrial

one – despite the difficulties that Tata faces in Bangladesh for political

reasons. In keeping with its commitment to societal responsibilities,

the Tata Group has been actively involved in initiatives that promote

the social and economic development of host countries. The United

Nations’ Global Compact has emerged as a key instrument to adopt

common principles in the areas of human rights, labor standards, the

environment and anti-corruption. All the 10 principles of the UN Global

Compact are incorporated in the Tata Code of Conduct. 50 Tata Steel

is a founder member of the Global Compact and also been conferred

the Global Compact Business Coalition Award for Business Excellence in

the Community in recognition of its pioneering work in the field of HIV-

24
AIDS awareness. The city of Jamshedpur is one among six in the world

to be chosen to participate in the UN Global Compact Cities Pilot

Program. Tata Steel Managing Director B Muthuraman sits on the 20-

member the Board of the Global Compact. Tata Motors has formulated

in 2005 specific policies on Human Rights, as enunciated by

International Labors Organization. There are also policies on Equal

Opportunity, Non-Discrimination in Employment and Sexual

Harassment. The Adult Literacy Project is in South Africa of particular

interest insofar as the community development program is adapted

from TCS’s computer-based functional literacy initiative that was

implemented in India. The project was replicated in the North Sotho

(Sepedi) language in partnership with the WDB Trust, an organization

that works in the areas of micro finance, entrepreneur training and

education of impoverished rural women. The initiative has so far

trained 65 people to read, with plans to introduce more languages to

the program and thus increase its reach. Other synergies have been

created in a skills-development program in rural South Africa

developed by Tata Africa and Kabana, an organization set up by the

Ministry for Minerals and Energy in partnership with Harmony Gold and

Mintek (the South African R&D center for minerals technology). As part

of the program, trainees traveled to India where they were trained in

25
jewelry making at the Titan plant in Bangalore and in decorating

Ceramic ware at Tata Ceramics in Kochi.An additional problem is lack

of recognition and the ever-lingering risk that an Indian company is

treated as a sub-standard entity. 51 Again, various Tata companies

have started post-merger integration by bringing the board of the

acquired foreign companies to India to show them the new owners’

facilities. 52 As part of the drive to get the group’s message across,

the group is also opening offices in key countries.

3-Timetable for Implementation:

1868

Jamsetji Nusserwanji Tata starts a private trading firm, laying the

foundation of the Tata group.

1874

The Central India Spinning, Weaving and Manufacturing Company is

set up, marking the group's entry into textiles and its first large-scale

industrial venture.

1902

The Indian Hotels Company is incorporated to set up the Taj Mahal

Palace and Tower, India's first luxury hotel, which opened in 1903.

1907

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The Tata Iron and Steel Company (now Tata Steel) is established to

Set up India's first iron and steel plant in Jamshedpur. The plant

started production in 1912. Sets up its first office overseas, Tata

Limited in London.

1910

The first of the three Tata Electric Companies, The Tata Hydro-Electric

Power Supply Company is set up. The second, Andhra Valley Power

Supply Company was established in 1917 and Tata Power in 1919. The

first two companies were merged with Tata Power in 2000 to form a

single entity.

1911

The Indian Institute of Science is established in Bangalore to serve as

a centre for advanced learning.

1912

Tata Steel introduces eight-hour working days, well before such a

system was implemented by law in much of the West.

1917

The Tatas enter the consumer goods industry, with the Tata Oil Mills

Company being established to make soaps, detergents and cooking

oils. The company was sold to Hindustan Lever (now Unilever) in 1984.

27
1932

Tata Airlines, a division of Tata Sons, is established, opening up the

aviation sector in India. Air India was nationalized in 1953.

1939

Tata Chemicals, now the largest producer of soda ash in the country,

is established.

1945

Tata Engineering and Locomotive Company (renamed Tata Motors in

2003) is established to manufacture locomotive and engineering

products.Tata Industries is created for the promotion and development

of hi-tech industries.

1952

Jawaharlal Nehru, India's first Prime Minister, requests the group to

manufacture cosmetics in India, leading to the setting up of Lakme.

The company was sold to Hindustan Lever (now Unilever) in 1997.

1954

India's major marketing, engineering and manufacturing organization,

Volta’s, is established.

1962

Tata Findlay (now Tata Tea), one of the largest tea producers, is

Established.Tata Exports is established. Today the company, renamed

28
Tata International, is one of the leading export houses in India.

1968

Tata Consultancy Services (TCS), India's first software services

company, is established as a division of Tata Sons.

1971

Tata Precision Industries, the first Tata Company in Singapore, is

founded to design and manufacture precision engineering products.

1984

The first 500 MW thermal power unit at the Tomboy station of the Tata

Electric Companies is commissioned.

1995

Tata Quality Management Services institutes the JRD QV Award,

modeled on the Malcolm Baldrige National Quality Value Award of the

United States, laying the foundation of the Tata Business Excellence

Model.

1996

Tata Teleservices (TTSL) is established to spearhead the group's foray

into the telecom sector.

1998

Tata Indica — India's first indigenously designed and manufactured car

29
— is launched by Tata Motors, spearheading the group's entry into the

passenger car segment.

1999

The new Tata group corporate mark and logo are launched.

2000

Tata Tea acquires the Tetley group, UK. This is the first major

acquisition of an international brand by an Indian business group.

2001

Tata AIG — a joint venture between the Tata group and American

International Group Inc (AIG) — marks the Tata re-entry into

insurance. (The group's insurance company, New India Assurance, set

up in 1919, was nationalized in 1956).

2002

Tata Sons acquires a controlling stake in VSNL (renamed Tata

Communications in 2008), India's leading international

telecommunications service provider.Tata Consultancy Services (TCS)

becomes the first Indian software company to cross one billion dollars

in revenues. Titan launches Edge, the slimmest watch in the world.

2004

Tata Motors is listed on the world's largest bourse, the New York Stock

Exchange, the second group company to do so after VSNL.Tata Motors

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acquires the heavy vehicles unit of Daewoo Motors, South Korea.TCS

goes public in July 2004 in the largest private sector initial public

Offering (IPO) in the Indian market, raising nearly $1.2 billion.

2005

Tata Steel acquires Singapore-based steel company Nat Steel by

subscribing to 100 per cent equity of its subsidiary, Nat Steel Asia.

VSNL (now Tata Communications) acquired Tyco Global Network,

making it one of the world's largest providers of submarine cable

bandwidth.Tata Sons completes 60 years of Tata operations in the US.

The Taj acquires a hotel run by Star wood, Sydney (renamed Blue)

and takes over management of The Pierre, NY.

2006

Tata Sky satellite television service launched across the country.

Foundation stone for the Tata Medical Centre unveiled in Kolkata.

2007

Tata Steel acquires the Ango-Dutch company Corus, making it the

world's fifth-largest steel producer.TCS inaugurates TCS China — a

joint venture with the Chinese government and other partners.

Computational Research Laboratories, a division of Tata Sons,

develops Eke, one of the fastest supercomputers in the world and the

fastest in Asia. The Taj acquires Campton Place Hotel in San Francisco.

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Tata Steel celebrates its centenary on August 26, 2007.

2008

Tata Motors unveils Tata Nano, the People’s Car, at the 9th Auto Expo

in Delhi on January 10, 2008.Tata Motors acquires the Jaguar and

Land Rover brands from the Ford Motor Company.Tata Chemicals

acquires General Chemical Industrial Products Inc.

2009

Tata Motors announces commercial launch of the Tata Nano; Tata

Nano draws over 2.03 lakh bookings; first 100,000 owners of the Tata

Nano chosen; delivers first Tata Nano in the country in Mumbai.Tata

Motors ushers new era in Indian auto industry with its new, world-

standard truck range.Tata Teleservices announces pan-India GSM

service with NTT DOCOMO.TRF acquires Dutch Lanka Trailer

Manufacturers (DLT), Sri Lanka, a world-class trailer manufacturing

company. Jaguar Land Rover introduces its premium range of vehicles

in India. Tata Motors acquires remaining 79 per cent shares in Hispano

Carrocera, one of the largest manufacturers of bus and coach cabins in

Europe.Tata Teleservices launches Photon TV, an application that

allows Tata Photon Plus subscribers to watch live television channels

on their laptops while on the move, and on their personal computers at

home and in the office. Tata Chemicals launches Tata Swatch — the

world’s most cost-effective water purifier.

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2010

TRF acquires UK-based Hewitt Robins International.

4-Gaining Commitment Stakeholders:

The Tata Group has always striven to balance its responsibility toward

shareholders with a commitment to the community. Group company

Volta’s, true to this tradition, has consistently looked beyond its

immediate business environment to address larger societal issues. This

concern springs from the belief that a true corporate vision must

embrace the wider community rather than just shareholders,

customers and suppliers. There is nothing idealistic or utopian about

this vision, nor is it in conflict with hard-headed business sense. Volta’s

understands that the time, resources and in-house professional

expertise invested in social development projects pay rich dividends to

the company and the communities in which it operates. The message

is clear: creating profits can and should go hand-in-hand with

generating goodwill. There have been, through the years, numerous

causes to which Volta’s employees have given freely of their time and

effort. But until recently the company’s approach to community

development initiatives was not very structured. Things began to

change when Margaret D’Souza, the resourceful and motivated senior

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executive from Volta’s human resources department in Mumbai, was

handed the responsibility of giving the movement a decisive direction’s

D’Souza, with a one-year deputation to the Tata Council for

Community Initiatives (TCCI), the group’s umbrella organization for

social development projects, behind her, organized a dedicated band

of Volta’s volunteers. Help was forthcoming from the management.

"Our managing director [Ashok Soni] and vice president (human

resources [AJ Gole] have given tremendous support," she says,

"enabling me to shape the corporate social responsibility movement

for Volta’s during my deputation with TCCI."Speaking at the official

release of a brochure on the company’s community development

activities, Mr. Soni said the fact that Tata Sons (the group’s holding

company) was 60 per cent owned by charitable institutions was a

vindication of the Tata philosophy of social activism. He commended

the volunteering team for its untiring efforts and assured full

management support for all such future initiatives.Mr. Gole revealed

that over the past year there had been a decisive transfer of control

and responsibility from the management to the volunteering team. Ms

D’Souza’s deputation to TCCI had, he said, resulted in a more

structured approach to the company’s community development

initiatives. "The team’s involvement in core competency projects

34
Signals a paradigm shift in our corporate volunteering efforts," he

remarked. Volta’s volunteers are currently involved in two ‘core

competency’ projects, so called because they involve a sharing of the

core skills of the company’s employees. Engineers from across the

various divisions have designed a course on air-conditioning that is

specifically targeted to meet industry requirements. The course is

being offered at the Joseph Cardin Institute for Vocational Training in

Mumbai, with the volunteers providing hands-on training to poor

students. The company has donated equipment for this programmed,

and its former managing director, ND Khurody, has extended valuable

support to ensure its success. The diploma course in air-conditioning

and refrigeration being offered at the KJ Somaiya College of

Engineering in Mumbai is another brainchild of the Voltas family.

Designed by RS Iyer, a former general manager at Volta’s research

and development wing, this course is the first of its kind in Mumbai.

The maiden batch of students passed out recently, and was quickly

absorbed up by the industry. The company’s ‘corporate volunteering’

efforts encompass numerous other projects in the vicinity of its

facilities. This ‘service-nearer-home’ rationale has less to do with

maintaining amicable labor relations than with easily monitoring

project progress and usage of funds. Presented below are snapshots of

35
Some of the causes where Voltas volunteers have made significant

contributions.Vatsalya, a Mumbai shelter for street children, is

receiving a helping hand from Voltas. Company volunteers recently

organized an exhibition-cum-sale of handicrafts fashioned by the

inmates. The event was a sellout, and was followed by a stage show

entirely managed by the children. A computer centre for these kids

was inaugurated during the function. The National Association for the

Disabled Enterprise, a project directed by TCCI’s Mumbai chapter,

employs blind and physically handicapped people to assemble and

pack typewriter components. It also runs a printing press — from

where Voltas recently sourced a significant volume of stationery — and

a garment manufacturing unit. Akanksha, a haven for Mumbai’s

destitute children, operates from Volta’s Mumbai office. Company

volunteers have held a series of meetings with Akanksha officials to

start a mentoring programmed for these children. Women are at the

vanguard of the company’s community initiatives. With Ms Komal Bir

Singh in charge, the Voltas Organization of Women (VOW) nurses the

sick, provides financial help to the needy, and frequently organizes

various seminars, knowledge workshops and training camps for the

general public. The bulk of Vow’s budget is allocated for dispensing

medical treatment, and it plans to set up a dialysis centre for poor

36
Kidney patients in the near future. The ANZA school for mentally

handicapped children in Mumbai is another institution Voltas has

adopted. Volunteers actively support the many workshops organized at

this school and arrange to sell the handicrafts made by the children.

Plans are afoot to set up a regular stall selling the school’s products.

The Shepherd’s Widows’ Home is a regular stopover for the volunteers.

They chat up these lonely women and make them feel wanted. Last

Christmas was a truly joyous occasion for the inmates, with Santa

providing the icing on the cake — a brand new TV. Volta’s employees

from Pine recently visited the Father VS Lourdes’s Children’s Shelter in

the city. The gifts they distributed brought a great deal of cheer to the

homeless children there. This volunteering effort was spearheaded by

NS Shenoy and Arnavaz Irani. The Tata Group has joined hands with

the Hyderabad-based MV Foundation to educate child laborers. Volta’s

Hyderabad, with Vikram Kajjam from the human resources department

at the helm, is actively supporting this project by donating furniture

and teaching material. A team of Voltas volunteers in Kolkata

distributed school uniforms to needy children during last year’s Durga

Puja festivities. The city office has installed a collection box for

employee contributions toward social service activities. Volunteers

regularly visit the St. Joseph’s Old Age Home, run by the Little Sisters

37
Of the Poor, in Kolkata to chat up the lonely people there and bring

some cheer to their bleak lives. With the Tata Business Excellence

Model offering significant importance to such worthy initiatives, the

group has sent a strong signal that all Tata companies must do their

bit for the community at large. Voltas is doing more than its bit to

fulfill this commitment.

5-Monitoring and Evaluation:

TCS: Double clicking EVA

'Economic Value Add' is not just another term that will settle down

among management jargon. At TCS it is a strategy that holds promise

to take the company to the heights it plans to achieve Tata

Consultancy Services (TCS) is the oldest and most profitable

enterprise in India's IT pantheon. While Indian software players see

TCS as the organization which set up the industry in India, Tata Group

companies look up to it for the pace at which it implements various

management and quality practices. As it scales up to become one of

the top 10 global consultancy firms, TCS is playing a game where rules

are stricter and opponents tougher. TCS hopes its adoption of EVA in

April 1999, will help it survive in this intensely competitive business.

To achieve operational excellence, TCS had to answer a few questions:

38
How to grow beyond just an increase in numbers? How to sell

competence and value rather than skills? How to manage

commitment? How to reduce wastage? The answer to these questions

demanded a system of efficient resource management, better control

of outstanding, and performance evaluation that would link rewards to

revenue generation. TCS faced many challenges while implementing

EVA, but it successfully overcome them to complete the

implementation ahead of schedule. The implementation coincided with

corporate reorganization. Also, given the nature of its projects, TCS

had to design an incentive mechanism not only to retain talent but

also to reward it accordingly.

a)EVA for employees

TCSs EVA framework aligns corporate value with the performance of

the constituent business units and the individuals who comprise these.

It is a compensation model where the employee has a share in the

profits of the organization. At the individual level, an employee needs

to know the drivers to enhance the EVA of the enterprise and the

business unit, and his own contribution towards all these. There are

three basic drivers: revenue, cost and capital charge.

"Given that the order size is increasing, TCS has now started looking

39
At pricing and structuring of deals using the net present value

approach," says Tej Pavan of Stern Stewart. Revenue is driven by the

rate or license price put into the product, sales, billable hours,

response time and domain skills. Cost is managed through

productivity, and is affected by sales and marketing costs,

recruitment, etc. Receivables and training are the bulk of the capital

charge. The individual works towards the improvement of the benefit

package, which essentially has three components: corporate EVA,

business-unit EVA, and the individual performance factor. Out of the

total EVA payment, a certain percentage goes to each employee on the

basis of corporate EVA improvement. Besides, if ones business unit

does better than another business unit, one gets more than somebody

in the other unit. It is a team reward concept.

b)Bonus bank

The third one depends on the evaluation of individual performance.

TCS has also introduced the concept of bonus bank. Whenever a

stipulated corporate target is exceeded, the company declares a

potential bonus for the individual. It is cumulated over years and the

pay out is a function of the cumulative balance. This approach ensures

performance improvements and maintains a cumulative relationship

40
Between pay and performance. If TCS successfully implements EVA,

the credit should go the organizations willingness to break down the

broad strategy into day-to-day activity and integrate them properly.

More importantly, it is the commitment of the entire enterprise

towards value creation that sets TCS apart from the rest of the

industry.

Tata Steel: Rolling Out EVA

"EVA is more relevant for us as we are in a capital-intensive business,

and EVA lays stress on investment management," says B Muthuraman

Tata Steel is not content with being India’s only world-class steel

maker. The urge to improve and to emerge as the most cost-efficient

steel producer induced it to consider quality- and performance-

improvement initiatives. It adopted the value-engineering technique,

ISO 9000, ISO 14000, QS 9000, Six Sigma, and the JRD Quality Value,

among other things. So why did the company choose to go in for one

more value-based management initiative? The company had been

lagging behind in shareholder returns. Traditional measures like

operating profit and price earnings ratio placed the company at the

top. But it still had a long way to go. As a performance-monitoring

41
Tool, EVA speaks about value creation for shareholders. "EVA is more

relevant for us as we are in a capital-intensive business, and EVA lays

stress on investment management," says B Muthuraman, Tata Steel’s

managing director.Tata Steel had not expected major benefits in the

short term. But it expected to identify the levers that would help plan

future initiatives. In the medium to long term, it plans to create a

mindset where initiatives across all levels can be linked to EVA growth.

Cascading accountability and decision making downwards is

challenging. "Stern Stewart and Co will be providing extensive training

to 40 of our officers, who will customize the training programmed and

take it down to each employee," Mr. Muthuraman adds.

Luck of the team

Tata Steel is lucky in many ways. Despite its size and historical

baggage, the teams have a lot of enthusiasm and ability to undertake

and improve upon the number of large initiatives concurrently. They

have the best team to extract the best out of consultants, says Tej

Pavan Gandhok of Stern Stewart.

Tata Steel adopted a five-stage process for implementing EVA: Sharing

the vision: Creation of awareness among employees Value diagnostic:

Identification of gaps and opportunities Value audit and goal setting

42
Measurement and management Training and knowledge transfer from

working groups to employees So far the implementation has

progressed along expected lines. Tata Steel’s experience with ‘total

operating performance’ and the performance ethic programmed (PEP)

have helped. These initiatives have instituted a meritocracy-based

management structure, which has improved decision-making

processes even prior to the EVA rollout. Earlier initiatives, like the

balanced scorecard, helped align employee goals with the company’s

objectives. Tata Steel did not have to spend time on identifying EVA

centers and drivers as the PEP was already structured on those lines.

The company was able to integrate all initiatives and make speedy

progress on multiple initiatives.

"We have set ourselves the target of turning EVA-positive by 2007,

which implies that we should be able to meet the expectations of our

investors," says Mr Muthuraman. If the recent capital expenditure

plans are anything to go by, there is every reason to believe EVA is on

a roll.

Tata Tea: EVA in a tea cup

Tata Tea started building EVA as a key performance indicator in the

43
Balanced scorecards, so that the performance-management system

centers around EVA It was the preoccupation with the here, the now

and the future that drove Homi Khusrokhan, managing director, Tata

Tea, to embrace EVA. "An organization that measures business

performance purely in accounting terms will fall into the trap of taking

decisions on the basis of impact o profit, a myopic way of running a

business, rather than impact on wealth, a measure that forces one to

think of the long-term consequences of every decision made," he says.

Setting the stage

Dissatisfied with traditional accounting measures, Mr Khusrokhan had

asked Stern Stewart to do a diagnostic study on value in Tata Tea. The

aim of the study was to see whether information systems focused on

value and enabled good decision making, and which areas had to be

addressed in order to create positive value. Also, the value chain was

not sufficiently de-aggregated to show where value was being created

and where it was being destroyed. Later, Tata Tea started the

measurement phase. This involved training its finance personnel in the

adjustments to be made in the accounting figures. The company

steering group decided on how many and which EVA centers should be

created within the company. The EVA process was made possible

through a workshop on plantation economics. The workshop was

44
Designed to provide a method for treating each plantation as an asset,

with the value of the discounted value of future earnings from the teas

produced at that plantation evaluated at auction-equivalent prices. The

method looked at plantations as units of production that are capable of

generating alternative streams of revenue, depending on inputs,

agronomic practices and prices. This outlook allowed people to make

choices on the basis of financial outcomes rather than gut feel.

Tata Tea has started building EVA as a key performance indicator in

the balanced scorecards, so that the performance-management

system centers on EVA. "The minimum number of such balanced

scorecards will be nine, one for each of the EVA centers," explains Mr.

Khusrokhan. "Since EVA is influenced by decisions made within the

centre, the impact of these decisions will be tracked on the balanced

scorecards for the EVA centre." The idea is to identify where the value

for the stakeholder is being created. The company will test its first cut

medium-term three-year business plan on this metric, and determine

whether the plan delivers the required future growth value. If not, it

will have to reexamine some of the strategies.

Changing for the positive

Mr. Khusrokhan adds, "People generally think that only strategic

decision making influences EVA. In fact, quite a few day-to-day

45
Operating decisions impact value creation and future cash flows. EVA

is not just about capital budgeting or major acquisitions." EVA does

not bear fruit instantly. "We must be realistic. The plan is to improve

EVA year-on-year. We need to generate incremental positive change

and ensure that were moving in the right direction.” Implementing EVA

was not easy for Mr Khusrokhan and his team. They needed to change

mindsets and beliefs that were once held dear. For instance, brands

became "captive to plantations" and the choices open to the company

were narrowed down. Dependencies were created between plantations

and brands, and these became difficult to sever. All own-plantation

teas are substitutable and have a value that can be easily

ascertainable. No unit of production can be awarded a realization that

is higher than its true economic rent. To make the right choices, one

needs to de-aggregate the value-chain and determine where value is

being created and where it is being destroyed. The EVA-based way of

looking at plantation values at the auction-equivalent price of the teas

produced, rather than the aggregated realization that can be got out of

a brand is a better and more correct way of looking at the true

economics of plantations, asserts Mr. Khusrokhan.As far as human

resources are concerned, training in the new methodology will be the

greatest challenge. "Our finance people must think of themselves as

46
business managers and guide the decision-making process correctly, in

addition to controlling the books," says Mr. Khusrokhan.

Empowering employees

By creating EVA centers in the organization, Tata Teas top echelon is

moving away from a top-down decision structure. The company wants

to break problems into constituent parts. The job of the plantation EVA

centre is to maximize the value of plantation assets. The nine EVA

centers are supported by EVA-measurement points, which will aid the

spread of the methodology. The North India plantation operations are

collectively an EVA centre; individual plantations like Poway or Chubwa

are EVA-measurement points. The importance of shareholder value

creation is the most important learning for the management. "Bringing

a long-term perspective to decision making, and not being a slave to

today’s profits and tomorrows reports and results is crucial if the

shareholders interests are to be served in the longer term," says Mr

Khusrokhan. Improving decision making and forcing a focus on the

longer term are the other important lessons that EVA can teach a

management. What the future holds Mr. Khusrokhan expects a

momentous change from EVA implementation. Speaking of benefits to

the Tata Group, he says, "The most significant benefit that the group

can derive out of the EVA methodology is an improvement in the

47
Quality of strategic decision making within individual group

companies." If correctly implemented, an EVA culture can become a

way of life within the organization.

References

1. Tata group introduction and history [online] (Updated May 2010)

Available at: http://en.wikipedia.org/wiki/Tata_Group [Accessed
8 July 2010].

2. Tata group corporate social Responsibility objective and

measures [Online] (updated May 2010) Available at:
http://www.tatatechnologies.com/global/Community.aspx?
MenuCode=161http://www.tata.com/company/releases/inside.a
spx?artid=AMzaeJoYELI= [Accessed 10 July 2010].

3. Tata group corporate social responsibility objective and measure

[Online] (Updated May 2010) Available at:
http://www.tata.com/htm/tata_review.htm [Accessed 9 July
2010].

4. Tata group Timetable for Implementation [Online] (Updated May

2010)Availableat:http://www.tata.com/htm/Group_milestone.ht
m?sectid=0Xw9Kk6LW6s=[Accessed 13 July 2010].

5. Tata group Gaining Commitment stakeholders [Online] (Updated

May 2010) Available at:
http://www.tata.com/ourcommitment/articles/ inside.aspx?
artid=xFD+EPoMm3A= [Accessed 10 July 2010].

48
6. Tata group Monitoring and Evaluation [Online] (Updated 3 March
2010) Available at: http://www.tata.com/company
Articles/inside.aspx?artid=SGJslTdQYEM= [Accessed 11 July
2010].

49