Tata Case

Source problems

The case talks about the global expansion strategy that Tata group, under the leadership of Ratan Tata, has undertaken in the recent past. The expansions have been done through acquisitions of stakes in international companies in automotive, steel, mining, hotel industries etc. Ratan was inspired by the global expansion of Chinese projects. Ever since the global expansion strategy has been started, the Tata group has seen several phases of hardships and success. The heavy deals such as Corus have led the company debt ridden and hence put to test the group values such as Corporate Social Responsibility and sustainable business model. Some of the projects taken in rural areas or for cause of society upliftment might face a situation where they may not be viable for the company. So, the central challenge is “To empower the group companies to survive in difficult global economic scenarios and at the same time not compromising with the traditional values that group stands for.”

Secondary problems

The group now has 100 companies with 300 subsidiaries present in 40 businesses. The businesses are more or less independent working entities. The group faces several short term and long term problems in its pursuit of global expansion which are listed below.

Short term problems

The short term problems that any company faces while it expands into various geographies are the fundamental problems as mentioned below and same have been true for Tata group:

1. Short term financial issues

As the company synergizes the newly acquired entities, there are lot of short term borrowings that the company requires to finance the day to day operations of the companies.

2. Human resource issues

As the two entities merge, there is bound to be cultural differences among their employees. The company may also undergo restructuring of the resources but will have to stick to the traditional Tata group’s philosophy of not firing the employees (Barkema, Bell &...