Case Study on

TATA : The Most Admired Brand

Objectives

• To discuss the best practices and HR initiatives adopted by the group.

• To discuss how the companies can use good HR practices to build a successful brand.

Growth of Tata Group• 1991 - restructuring process across the Tata

Group.• 1993 – Tata Motors and Tata Steel accounted

for more than 50% of the group sales.• 1995 - Tata Brand Equity Scheme : Building a

single strong entity • Stake of Tata Sons in the group companies

increased from an average of about 1.7% to a minimum of 26%.

• 1998 - A common logo was introduced

Growth of Tata Group• Jamshedji Tata wanted to provide more than

just a mere job to his employees• Tatas were pioneers in the area of employee

welfare• Ranked second in the list of most admired

companies in a survey conducted among students of leading management schools in India

• 1994 – Tata Steel annual capacity reaches four million tonnes .

• 1996 - Tatas ventured into the telecom sectors, through TataTele services.

• Two decision-making bodies : The Global Executive office (GEO) and Global Corporate Center (GCC), were constituted.

Problems in Tata Group• 2000 - The group companies had not

performed to the expected level.• BSE Sensex appreciated 46% between January

1996 and December 2000, while the Tata group index appreciated only 7% during the same period.

• .The group profit margins had dropped from about 12 % in 1995-1996 to 8% as of 1999-2000 and return on invested capital fell from about 18% to 11%.

Reasons for the Fall• Friction between the GEO, the Business

Review Committee (BRCs) and the management and board of the group companies

• Companies focused on turnover instead of profitability.

• There were a number of HR issues also.• Managers in the group were also perceived to

lack general management expertise

HR REVAMP• Group HR function was to be divided into three

divisions, each headed by a Vice President .• The Tata group sought to build an integrated HR

system, which focused on the Tata• Under the new HR framework managers could

aspire to move upwards from work level F to work level A, over a period of time.

• Employee compensation was to be driven partly by market trends and partly by the group's needs

Leadership Development program

• Managers in the group evaluated on the basis of a matrix that mapped their Emotional Intelligence with their Experience gained over the years.

Human Resource mandate

• Attract Good People, Retain Better People, Advance best people– Remuneration Policy, – Potential Assessment, – Performance Management, – Work Levels, – Career Development.

The Framework

Balanced Scorecard

Group Core Values

Group has five core values:• Integrity: Conducting business fairly, honesty and

transparency• Excellence: Achieving the highest possible standards• Understanding: caring, show respect, compassion and

humanity for our colleagues and customers around the world

• Unity: Working cohesively in group and with customers• Responsibility: What comes from people should go

back to people.