2001 witnessed one of the most noticeable turnarounds for an Indian automobile company in the annals of Indian vehicle making on market. The company is Tata Motors and it was the M. D. Ravikant who performed a major role along the way of change. The fact that turnaround process has been successful is obvious in the actual fact that Tata Motors rates as the fifth greatest supplier of medium and heavy trucks on the globe. In the Indian market, Tata Motors ranks second in the traveler vehicles segment. The business also offers significant stakes in ex - Soviet Republics, the center East South Africa, South Asia and Turkey. There also have been takeovers such as that of Daewoo's commercial vehicle business in South Korea and a 21% stake in Hispano Corracera, the Spanish car maker. The commercial-vehicle market in India shrank by more than 40% for Tata Motors. The 5 billion rupee reduction in 2001 triggered off a rethinking within the business. A recovery strategy was designed upon and the road towards a much better future was chalked out in three phases-each of which would last 2 yrs. Phase one looked to avoid the harm. Cost decrease was on the cards. This was going to be always a huge problem as the company have been till then operating in seller's market and used a cost-plus approach to pricing. The next phase looked at consolidating the business's position in India, and the 3rd phase would take a look at global markets and international development.
Phase1
Phase 1 aimed at building up a system of market charges and to decrease the rest even point. These needed major cut down in variable costs, diced costs and interest cost. The organization placed into use various strategies for cost-reduction such as bench marking rivals. The business also went set for e-sourcing, which has reaped positive results. In two. 5 years, Tata Motors brought down the break-even from almost two-thirds. The first phase directed to stem the blood loss and Tata Motors wanted to fully utilize information technology to operate a vehicle business goals and reduce cost.
Phase 2
While stage one focused on reducing costs, period two was all about taking action in areas that could impact the other stages. In period two, the focus evidently was on boosting product quality and upgrading product features. The procedure of making products more competitive also entailed focusing on developing new products for future years market. Phase 2 also engaged setting up a fresh sales planning process, tensing credit regulations, improving the liquidity and success of dealers, rethinking customer satisfaction levels, and extending the number of circulation network.
Phase 3
The next phase, i. e. stage 3 then focused on considering international markets. The key was to recognize a comprehensive intend to improve Tata Motors's position on the market. In phase 3, the business also centered on inorganic. The cyclical mother nature of local sales had to be considered first. Thereafter, within the transformational strategy, international diversification was the next reasonable step. Seeking new demographics and geographies for development in order to face limitations that the domestic market imposes is the company's prerogative. What Tata Motors really wanted was to optimize products globally.
P2. Organizational composition of Tata Motors:
The composition of a business is due to the organizational climate along with knowledge management. In the case of Tata Motors, the organization has understood the value of relationships between employers and staff. The procedure could be both formal and casual and the objective is to make employees feel more bound to the business. Gathering and sharing knowledge is another way. Tata Motors has a comparatively flat framework, thus it facilitates easy conversation between the different levels in the business.
Advantages of being bureaucratic:
A stable environment is created.
Managers at a lower-level are not allowed in the decision-making process as professionals at the upper-level.
Decisions are relatively modest and often professionals at a lower-level do not need to have a say in the decision-making process.
Disadvantages of being bureaucratic:
The environment becomes static and intricate.
Strengths of Tata Motors:
The transformational strategy which looked at international market segments has been to keep local managers at new acquisitions and also to transfer a few mature managers from the Indian market to the newer marketplaces. In this manner Tata Motors can continue to exchange skill and expertise.
Tata Motors has developed a strategy for the next phase of expansion. The business is concentrating on services and acquisition. It also has set up a program of rigorous management development to ensure a good leadership for future years.
Tata Motors stocks a highly effective and successful collaboration with Italian auto giant Fiat since 2006. What this has done is the fact Tata and Fiat has enhanced the conditions of creation and exchange of knowledge. For instance, the Fiat Polio Style premiered by Tata Motors in 2007, and both firms have plans to develop a vehicle for the central and Southern American market section.
Weaknesses of Tata:
One of the negatives has been that the business's passenger car products are reliant on 3rd and 4th technology platforms.
Tata Motors has bought out Jaguar and Land Rover brands. Yet, the company has not been in a position to get a steady hold in the blissful luxury car section in the local Indian market. The question that comes up is: Gets the company's brand imaging as a developer of commercial and low-cost passenger cars isolated it from the profitable luxury segment in the growing Indian economy.
In English, the word 'Tat' means rubbish. Perhaps, this works negatively for the very sensitive British isles consumer who makes a decision not to buy into such a brand name. However, Fiat, Jaguar and Land Rover do not hold such inhibitions.
P3. Alternative forms of organizational development
Mechanistic Corporation:
A framework of business which is rigid and manipulated tightly.
Highly specialized atmosphere
Rigid departmentalization.
Narrow durations of control.
High formalization
Limited information network.
Advantages:
Mechanistic organizational buildings are beneficial in highly complex environments where in fact the duties are interrelated and sophisticated. Every employee focuses primarily on a specific process and therefore makes only a tiny contribution to the company's final output. The emphasis is on improving technical processes and it is the mature level professionals who decide how the tasks are to be accomplished. Instances is the new stonecutters Bridge structure or daily businesses at MTR.
Disadvantages:
Mechanistic organizational composition tends to be very rigid and static which slows it down and resists adaptation to improve in environmental situations. Mechanistic structure is also not suited to turbulent or highly competitive marketplaces such as that of the telecommunication market section. Also, this framework is not highly recommended when a major part of the workforce is very skilled professionals.
Organic Group:
A structure which is highly adaptable and prepared to adapt to changes
Non-standardized jobs
Fluid team-based structure
Little direct supervision
Minimal formal rules
Open communication network.
Advantages:
Organic management buildings are applicable when the work environment is highly uncertain not secure or subject to very speedy changes in market conditions. Additionally it is used in situations where the workforce is empowered and empowered to make decisions and fix problems. An example would be professional consulting varieties.
Disadvantages:
Organic composition cannot work when the organization faces an emergency, or when the company is large. Also, when effective execution of company strategies would depend on the capability of mangers to have a say in the decision-making process
Transferring the composition into organic and natural:
From Mechanistic
To Organic
Function driven
Closed
Parts
Top down-hierarchical
Controlled
Corporate
Centralized
Departmentalized
Sameness
Stability
Purpose driven
Open
Whole
Local focus
Empowered
Boundary less
Distributed/Networked
Connected
Diversity
Growth/Change
P4. CHANGE IN Labor force AND CULTURE
Formulation of a clear strategic eyesight: An organization must have a vision of the new strategy, prices and frame of mind to direct and ensure a powerful social change.
Display Top-management determination: In order to effectively accomplish a ethnic change, the most notable level of the management must show determination to change. This is certainly a crucial sign of the chances of the business's successful transition. De Caluwe & Vermaak (2004. P9) have presented a platform with five other ways of thinking about change.
Model Culture change at the highest level: It's important to ensure and show that the management pressure is and only the change. This is done through the patterns of the management team to symbolize the sort of values and attitudes it wants.
Modify the organization to support organizational change:
Select and socialize newcomers and terminate deviants: A way to combine culture is to connect it to regular membership and adaptability.
Develop ethical and legal sensitivity.
Features of the radical change at Tata Motors:
Tata Nanos, the latest offering by Tata Motors has been called the 'people's car'. With a cost label or US $2500, it can be an amazingly cheap car. Nano is definitely an affordable middle income family car. The average Indian dream of owning and worries will become an authentic one with Tata Nano. What follows is an research of this hottest offering by Tata Motors which assures economic and interpersonal range of motion for the people.
Achieving the price objective:
In presenting the world's cheapest car, Tata Motors has beat conventions and problems within the industry. The Nano is a wonder of a product with cost-effective and mechanised simplification. Nano has achieved a breakthrough in frugal anatomist where technology is associated with cost benefits and utter ingenuity. Tata Motors has been able to envision the essential tenets of efficiency, while accumulating Nano, The Company has achieved this by including only the required items and excluding not so relevant ones. The product features have excluded radio, air conditioning, ability steering. The tool panel consists of only a speedometer, odometer, and energy gauge similar to that of your two-wheeler. There features are essentially useful in character. Tata has brought down the overall cost by coming up with innovative and sensible ways. Nano uses a 623 cc two cylinder petrol engine unit which is comparatively smaller and lighter than other car machines. Another invention has been the placement of the engine at the back of the car and a front space for luggage. These weight reduction measures have brought the weight of Tata Nano to about 592 Kg.
Safety at heart:
Tata Nano has installed commensurate features that meet up with the required minimum protection standards. It has a sheet-metal body with strong traveler compartment prepared with safety features such as crumple 3 ones, education resistant doors, chair belts, strong seating and anchorages. The rear tail wine glass is set to the car's body and tubeless tires ensure safe practices too.
Ownership cost:
The next question that crops up for who owns a Tata Nano is the fact does owning the car yield significant savings and benefits in the long run. Other than the low price-tag, other factor like the jogging cost of the automobile is also considered. Petrol prices have crossed the US$100 make with no signals of coming down in the near future. An insurgence of Tata Nanos on Indian roads might result in higher petrol prices over time. These surging energy costs will also need to be factored in by the owners of Nano along with the expense of alternative parts and service maintenance for the car. In addition, there is also uncertainty over the vehicle's reliability, strength and durability of the component parts.
Nano overseas:
In view of rising energy costs, consumers look for low cost car alternatives. Tata Motors seeks to focus on this aspiration beyond Indian market. One potential market has been Thailand which really is a major automobile making hub in the ASEAN region. Thailand has launched the 'Eco-car' job, an initiative to generate green cars that happen to be fuel and cost efficient. This offer is a practicable one for Nano. Tata Motors features one of the seven manufacturers which may have requested the 'Eco-Car' task.
P5. Analysis of the System:
Taking under consideration the organizational change in culture, Tata Motors practices a variety of approaches. These include ascertaining fundamental assumptions, questioning ethnical spaces and managerial action in the business. These are different models for considering organizational culture. We've followed the 'Denison' model. The Denison model divides the organizational culture into four parts based on two axes: the amount of target and degree of stability. By horizontal research, co-operation and compatibility concentrate on inner dynamics of the organization, while adaptability and quest in the external environment. By vertical dissection, participation and partnership show a company's attitude towards overall flexibility and change, while compatibility and quest stress on steadiness and clear envisioned route.
These four ethnic characteristics are reviewed below
Adaptability: Adaptability refers to the organization's capacity to make the demands of the marketplace practical. The Denison model considers three areas of adaptability which affect the organization's capacity. The first aspect is called the power of realization and reacting to the exterior environment. Included in these are being attentive to customer tendencies and competitor activities. The second aspect is the capability to react to inner events without considering level, office, function and output. The 3rd factor is the capability to set up and rearrange process and behavioral structures to help the company to adapt to new situations.
Standards for adaptability are:
Making the changes
Customer focus
Organizational learning
Constancy:
Constancy identifies the ideals and systems which donate to a solid culture. Constancy allows a central point for consolidating and harmonizing the organizational composition. Constancy in the company in produced by a coordination between your employers and the employees. Constancy, when properly inculcated, creates an impactful organizational culture predicated on joint beliefs, ideals and symbols for the labor force.
Integrity and coordination
Core values
Agreement
Involvement:
Involvement is came to the realization when employees feel in charge of the organization. The workforce attached to their work and this results in better performance. The framework becomes casual and voluntary rather than being formal and required. Involvement includes dedication one of the employees.
Standards of engagement are:
Employment
Capability development
Team orientation
Mission: Objective defines a permanent direction for the organization. Mission brings together the goals of the company, the public role and exterior objectives of the business. Activities and strategies are discovered in accordance with the required position that an corporation aspires to.
Standards of Mission are:
Strategic direction and intent
Goals and objectives
Vision
P6. Appropriate models for the change
Kurt learns has suggested three stages in bringing in change:
Unfreezing:
Older ideals and systems must be either improved or taken away to make way for newer ones. This technique must be facilitated by the leader through unlearning (and not learning) and providing psychological support.
Changing:
The step is exercising:
What I hear, I forget
What I see, I remember
What I do, I understand
This procedure for practice includes the contrasting emotions of confusion and hope, overload and discovery, despair and pleasure.
Refreezing:
This stage implies the popularity of the new functions. What has been discovered is now been practiced. The procedure is ongoing and one must learn face to face.
P7. Execution process and contingency plan for Tata Motors
Feedback: This calls for the recognition at the individual level, group level and organizational work dynamics.
Awareness of changing socio-cultural environment: One should be aware of the processes that influence and condition one's behavior. Change becomes necessary when there's a difference between present benefits and desired results.
Increased interaction and communication: Encouraging interaction brings about changes in frame of mind and patterns.
Confrontation: A confrontation brings to the top differences in beliefs, principles, and norms and thus facilitates a negotiation.
Education: Educational activities purpose at replacing knowledge and ideas, beliefs, behaviour and skills.
Participation: Participation facilitates problem solving, goal setting and development.
Contingency plan for the change at Tata Motors:
An knowing of the situation so the employees can adjust successfully toe organizational changes and entire heartedly accept change.
A support framework to ensure that employees take change easily and get adequate support from the management.
Strategy analysis to ensure that the worker knows their role in the organization.
Training program to orient the employee before the change.
Encouraging communication and discussion between management and employees whatsoever levels.
Career opportunities and incentives to inspire the labor force.
