Tata Group - Leading for a Globalized Economy

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Leading for a Globalized Economy

ANALYSIS PAPER OF TATA GROUP

Prepared by: Vikas, Suchet, Kaushal, Karamjit

Submitted to: Murtala Sani

Date of Submission: April 23, 2018

Introduction –

This case is based on the auto mobile company which is based on the Tata motors limited and the challenges they faced by the different state Government during their launching of Nano car. Tata group was established by the Jamshed ji Tata, Ratan Tata who was the former chairman of the Tata group is looking after his family business. Now the present chairman of Tata group is N Chandrasekaran who is handling the Tata group. (Chandrasekaran is Tata Motors’ new Chairman, 2017). Ratan Tata is richer than Bill gates but his name is not mention in the richest people list because of the charity purpose. 65% of his business profit of his family and company fortune is goes to charitable organisation by him (KENNEDY, 2017).

Tata motors limited established in 1945 and began manufacturing locomotives. Later in 1954 company expand its business in commercial vehicles and merge up with the Daimler Benz of Germany. Today company is dealing in passenger cars and buses; and utility vehicles and commercial vehicles. Its main manufacturing plants in India is Jamshedpur, Lucknow, Pantnagar, Ahmedabad and Pune. Its association with various brands worldwide. Company is running 96 different business and out of this 30 are publicly listed Tata enterprises which includes: Tata Consultancy Services, Tata Steel, Tata Motors, Tata Power, Tata Global Beverages, Tata Teleservices, Titan, Tata Communications, Tata Chemicals, Taj Group and several more. (KENNEDY, 2017).

Tata motors launched some passenger cars which is compactable and most preferable by the people which are Tata Indica 1998, sedan indigo in 2002 and Nano in 2009 and in the utility vehicles Tata Sumo launched in 1994 and Tata Safari in 1998. They also launched a passenger’s buses of 12 seaters to 60 seaters in the light, medium and heavy segments which includes magic four-wheeler public transport and winger a maxi van. Very few people know that JLR (Jaguar and Land Rover) is also run by the Tata group in their luxurious units. In 2008 Tata motors purchase the well known British car brands Jaguar and land Rover from the Ford motors company. (Hollar, n.d.) They made their vehicles to keep in mind the human health and future prospective. There two major concerns are to reduction of environmental pollution and restoration of ecological balance.

(Amrita, 2011)Ratan has dream to serve his people the cheapest car which is affordable by every person who wants the car but can’t fulfil his dream because of the huge amount.  To fulfil his dreams, he launches the Nano in 2009 in only 120,000 Rupees including road tax and delivery cost. Maruti 800 was the most preferable car in India, face a major competition with the launching of this small and affordable car which have 8% smaller and 21% larger seating capacity than Maruti. Mr. Tata faces a lot of challenges during his journey of Nano launching. He has a planned to open a plant in Singur, West Bengal, India. But the state Government of 2009 did not approve their proposal and the Gujrat state Government invite and allowed them to start their plant. There are some challenges which Nano faced in its journey are: to stick with the low cost, maintain the quality of the car, to acquire the land and production on time which is further describe in the next part.

Issues and Problems-  

There were various challenges faced by Tata’ motors limited before launching Nano for country’s roads also there are major challenges that company faced such as- 1.) Issue behind shifting plant to Gujrat from west Bengal 2.) Reason for choosing Gujrat over Bengal for plant establishment and how it benefitted the state government and employment. 3.) Differ between both Province offers for Tata establishment. 4.) Acquiring the land in Bengal before the shift plan. 5.) quality standard maintenance (www.ukessays.com, 2015)

Now, main issue behind the shift was land Acquisition. In India, there are two major concerns which may act as barriers before acquiring any land for industrial purpose or others i.e. What kind of land organisation want to acquire (barren or fertile) and other is population density of the area. Because there may directly affect the people living there or nearby. According to Land acquisition act 1894, there were various hurdles which a province govt of Bengal had to follow before acquiring any land for Tata’s. In Singur, Bengal where the plant supposed to start due to this 6000 families were about to suffer. The project was planned to spread over 700 acres with 300 extra for Backup production.

Furthermore, there were about 10000 people involved in protest against the Land Acquisition whereas on the other hand 256 of the 354 were got their cheques. Opposition chief leader Mamta Banerjee went on hunger strike for 26 days against the land acquisition. Because she was clearly finding political benefit by raising this issue against state government. On Dec 6, Govt of west Bengal claimed that land owners of 920 acres handover their voluntarily but compensation for 658 acres of land has been accepted. Tata finally got the lead to setup his small car plant in Bengal and agreement was signed between govt of Bengal and Tata motors Ltd. for the leasing out land of 949 acres for next 90 years. But still more than half number of people out there who were still against the acquisition as clearly seems that only 30% agreed in writing for 287.5 acres of land. That clearly stated that 22% of them are still against the acquisition. Perhaps, the matter wasn’t clear between company and farmers but Tata started plant construction in January 2007 whereas on the other side people went to supreme court of India against the decision of High court of Kolkata. (www.ukessays.com, 2015)

• Now, CEO Rattan Tata called for press conference and took a very strict decision of not starting its plant in Bengal. He said, “He didn’t let the company run in such area where they are unwanted”. So, on September 2, 2008 Tata suspended its work of Nano manufacturing in Bengal. Also, he said that he didn’t let his managers, workers and other to put in such environment where is threat to everyday life, their children’s. Meanwhile after the announcement about shifting of plant Tata was getting 3-4 offers from other state governments to setup their plant. Tata got an offer from Province minister of Gujrat to set up his Nano manufacturing plant. It was a great opportunity for Gujrat to increase business in Gujrat, because it is very clear if a big manufacturing firm is moving to some place then all the nearby areas all gets benefits from the service of company somehow in terms of inside and outside employment. So, Tata announces its new venture plant at Sanand Gujrat in October 2008. After the 14 months of its plant shifting from Bengal to Gujrat. Tata inaugurate its manufacturing unit in 2010 with a capacity of 250000 cars a year. Now its not only the Nano which is manufacturing their but also Tata launched some other cars from Gujrat plant recently. (www.TheHindu.com, 2016)

TATA success in Africa-

Tata companies in Africa embrace the opportunity to make direct impact on the communities within which they operate, addressing immediate social needs such as health care. Tata Africa Services in Nigeria has partnered with the government of Lagos and, in January 2012, donated a mobile health clinic as a contribution to the improvement of Nigerian healthcare. Due to poor infrastructure, access to primary healthcare is challenging for citizens in rural and semi rural communities. (Guardian, 2013)