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Running Head: INTERNATIONAL MANAGEMENT THEORY 1

International Management Theories

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INTERNATIONAL MANAGEMENT THEORY 2

International Management Theories- Case Analysis: Rajah Ratan Tata

Introduction

In our contemporary society, Tata industries are a model of successful international enterprise

with a visionary leadership lead by Ratan. N. Tata. By the use of transaction cost theory Ratan N

Tata has been able to transform Tata industries from a stodgy regional player to a global

heavyweight having extensive businesses around the world in countries South Korea,

Indonesia, Singapore, Thailand, San Francisco, Vietnam, Boston and even New York (Crane,

Matten, Spence 2013). Tata has several brands which include Tata technologies, Tata steel,

telecom, Tata motor and Tata consultancy motors. With several leading capital investments Tata

has been able to establish several brands through the use of co-operation mechanism and

absorption dynamic principle like Tata’s steel takeover of Dutch-British steel giants Corus group

and the purchase of Tyco International telecom cables in 2004(Crane, Matten, Spence 2013).

Source Problems

A Ratan Tata industry is a classical model of qualitative global expansions strategy that has been

used to achieve global dominance and control in the business dynamic business paradigm. Ratan

Tata has used different core mechanisms towards realization of the company’s goals, ideas and

objectives. His visionary and ethical leadership can be attributed to the success of Tata industry.

Due to the pragmatic leadership approach of Ratan. N. Tata has made the economic aspects of

the company blossom with a tremendous increase of market value from $ 12 billion to $ 62

billion(Crane, Matten, Spence 2013).. The ability of Rattan N. Tata to make critical partnerships

has also seen the boost of the company’s fiscal peridature per capita. Ratan Tata depicts the

attributes of visionary leadership, business ethics, principles, and risk-taking ability (Jha, &

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Arora, 2013). Nevertheless, Rata’s industries have experienced several challenges since the idea

of globalization was incubated like, a possibility of weakening of financial markets margin due

to heavy deals like Corus Mill. This has put the integrity and authenticity of Ratans Company

under test with regards to their eminent corporate social responsibility and forging a sustainable,

durable and competitive business front. Thus the main challenge for Ratans Company is on how

to uphold its systematic and traditional core values while forging a thriving, durable and

competitive front in the global markets.

Secondary Problem

Since the inception of the idea of globalization Tatan group has faced several obstacles with

some being long term while others short term.

Short Term Problems

Ratan group of companies has faced several financial problems while expanding to other

geographical regions. The company has faced several financial obstacles and landed into large

financial debt of $7.4 billion as it strove to establish new brands like Corus Mills. There has been

financial strife from workers that the company pumps in a total of $ 600 million for the

betterment and assurance of their livelihood. This has made the company alter its fiscal and

financial reports as it sabotages development. Due to the expansive nature of Ratans company,

the administration of the several group units is has to effectively achieve.

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Long Term Problems

Although, Tata’s group is flourishing it still faces the problem of compatibility in balancing old

economic paradigm and strategies with new emerging eco-technological approaches to business

and globalization. The company has faced several obstacles in its marketing strategy of

introducing new brands to the market. It has proven a challenging factor in gaining customers

trust in their new business venture like the Jaguar and Ranger Rover bid which provided a

daunting challenge. Another major challenge that has faced Tata group is lack of maintaining

and producing talented leaders that are capable successor to propel the organization to the peak

of performance. Consequently, this has created a problem of succession.

Analysis

Tata’s multinational companies have been able to tap into abundant low cost efficient

power, technological knowhow, readily available mineral resources and wide economic market.

Tata approach of product specificity has made his companies to concentrate on few enterprises

and drops others. This has worked immensely to promote the growing enterprises in information

systems, consumer products, energy and engineering material consultancy, and communication.

The transformational changes have involved steps of professionalism that have spurred a global

outlook on Rata industries. The modern market has many dynamics which fosters market

transition based on the political elites and ethical leadership (Pasricha, Singh, & Verma, 2017).

Despite this Tata has been able to build an organization with coherent vision, risk tasking,

development oriented and well a structured market plan which has been able to withstand several

economic tides. Tata charismatic leadership has enabled him rise through the radar from being a

mere employee to the spiritual cement of the company and has overseen several drastic all

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changes like downsizing of the company, risk taking into different venture and the

transformation of conglomerate insular and lethargic management culture.

These changes have played a major role in the transformation of Tata’s industries from

being mere regional players to global market heavyweights. Tata group has played a critical role

in the Indian's economy despite the market liberalization. His business enterprises have provided

employment opportunities to several people and also brought goods and services near to the

people (Tymon, & Mackay, 2016). Despite tremendous success in business, world development

has remained a pivotal goal of Ratan Rata by promoting cooperate social responsibility, carrying

out philanthropic activities such as refurbishing schools, building of health facilities and

extensive agricultural development programs within India.

The organization had built a durable business empire founded on integrity and trust even

when the future and the prevailing market were uncertain. The Tata Group through Ratan Tata

has established benchmarks in the international market platforms at various domains. The Tata

Group or industry has expanded beyond government regulations, peripheral organization

barriers, and geographical boundaries through multiple business portfolios. Tata group has

devised and adopted strategy differentiation tactics to redefine the statue of the company.

Therefore, Tata Group has maintained production of quality products based on the supply

reliability and competitive prices at the global market. Over the years Tata has used several

business strategies to maintain a competitive business front through measures like cutting out the

number of its stuff and increasing funding to effect modernization. Both short and long term

problems have had massive negative influence on organizational operations and structure

dynamisms. This may be due to the use of old theoretical mechanisms in solving real time

business problem which require real time solutions

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Alternatives

There are several alternative criteria’s that can be used to foster a competitive and sustainable

economic front for the Ratans group,

Short Term Alternatives

Due to its large number of entities Ratan group should decentralize its management system for

higher efficiency. They should also improve their marketing strategy of new brands in order to

ensure profitability.

Long Term Alternatives

To attract long term clients the company should reduce the costs of some products and rampage

its marketing strategy to attract more clients. The long term goal of attaining growth should be

financed accordingly and avoid cases of financial debiting (Laurentiu, 2014). The decentralized

structure of leadership should be implanted on both the local and global level. The company

should work on its technological manpower and management style and adopt more efficient and

emerging mechanisms.

Recommended Strategy

Short Term Strategy

Tata’s group should establish a good rapport with the local community which usually provides

market for their products. They should work towards eliminating culture related issues within the

company.

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Long Term Strategy

The company should increase and intensify its marketing efforts and also use its brand strength

to establish new entities in new geographical areas and countries (Gbaffou, & Katsaura, 2014).

The human resource management should be overhauled and a decentralized system of business

management adopted. This will reduce management responsibilities hence ensuring efficient

functioning of the group’s management and implementation of strategies.

Justification of Recommendation

The justification of these recommendations in brought into check by the fact that the company

has a strong brand name hence appealing to new clients through advertisement is easy. Though

the current management system is qualified, the idea of decentralization ensures that workers are

not overloaded with tasks hence increasing their productive efficiency. Maintain a good rapport

with the locals is one way of upholding the group’s core values and belief system and approach

of collective societal responsibility.

Implementation, Control and Follow-Up

The implementation of these strategies should be carried out periodically till they are fully

absorbed into the groups systems of operation. The control and monitoring of the implementation

of these strategies should be done by studying previous reports and evaluating the progress

which has been achieved and what needs to be done to achieve the remaining strategies.

Furthermore it is the company’s responsibility to implement, monitor, control and co-ordinate all

strategies towards achieving them.

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References

Crane, A., Matten, D., & Spence, L. (2013). Corporate social responsibility in a global context.

Jha, V. S., & Arora, S. (2013). Strategic leadership for corporate sustainable development at Tata

Steel. International Journal of Indian Culture and Business Management, 7(3), 283-306.

Bénit‐Gbaffou, C., & Katsaura, O. (2014). Community Leadership and the Construction of

Political Legitimacy: Unpacking Bourdieu's ‘Political Capital’in Post‐Apartheid

Johannesburg. International Journal of Urban and Regional Research, 38(5), 1807-1832.

Pasricha, P., Singh, B., & Verma, P. (2017). Ethical Leadership, Organic Organizational

Cultures, and Corporate Social Responsibility: An Empirical Study in Social Enterprises.

Journal of Business Ethics, 1-18.

Laurentiu, R. M. (2014). Modern business development through managerial ethics. Annals of the

“Constantin Brâncuşi” University of Târgu Jiu, Economy Series, 119-121.

Tymon, A., & Mackay, M. (2016). Developing business buccaneers: employer expectations of

emergent leaders. Human Resource Development International, 19(5), 429-446.

INTERNATIONAL MANAGEMENT THEORY 9

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