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Submitted By:
Adithya Raj
Gaurav Kumar
Nishant Choubisa
Surbhi Agarwal R
Urpreet Kaur Soni
Vipul Gupta
Introduction:
Tata Steel, formerly known as TISCO and Tata Iron and Steel Company Limited, is the world's
sixth largest steel company, with an annual crude steel capacity of 31 million tonnes. It is the
largest private sector steel company in India in terms of domestic production. Ranked 258th on
Fortune Global 500, it is based in Jamshedpur, Jharkhand, India. It is part of Tata Group of
companies. Tata Steel is also India's second-largest and second-most profitable company in
private sector with consolidated revenues of Rs 1,32,110 crore and net profit of over Rs 12,350
crore during the year ended March 31, 2008.
Backed by 100 glorious years of experience in steel making, Tata Steel is among the top ten
steel producers in the world with an existing annual crude steel production capacity of 30
Million Tonnes Per Annum (MTPA). Established in 1907, it is the first integrated steel plant in
Asia and is now the world`s second most geographically diversified steel producer and a
Fortune 500 Company.
Its main plant is located in Jamshedpur, Jharkhand, with its recent acquisitions; the company
has become a multinational with operations in various countries. The Jamshedpur plant
contains the DCS supplied by Honeywell. The registered office of Tata Steel is in Mumbai. The
company was also recognized as the world's best steel producer by World Steel Dynamics in
2005. The company is listed on Bombay Stock Exchange and National Stock Exchange of India,
and employs about 82,700 people (as of 2007).
Tata Steel has a balanced global presence in over 50 developed European and fast growing
Asian markets, with manufacturing units in 26 countries.
It was the vision of the founder; Jamsetji Nusserwanji Tata., that on 27th February, 1908, the
first stake was driven into the soil of Sakchi. His vision helped Tata Steel overcome several
periods of adversity and strive to improve against all odds.
Tata Steel`s Jamshedpur (India) Works has a crude steel production capacity of 6.8 MTPA which
is slated to increase to 10 MTPA by 2010. The Company also has proposed three Greenfield
steel projects in the states of Jharkhand, Orissa and Chhattisgarh in India with additional
capacity of 23 MTPA and a Greenfield project in Vietnam.
The TATA Steel story is a classic example of synergy leveraged through the inorganic route. In
2005, Tata Steel acquired NatSteel Asia. This helped the company not only to establish a
beachhead in seven countries across the region, namely Singapore, Thailand, China, Malaysia,
Vietnam, the Philippines and Australia, but also provided it with a customer base for close to
two million tonnes of steel. As a brand, NatSteel's strong equity in the region was yet another
strategic gain for Tata Steel. The company's strong human resources and management
effectiveness is also an inheritance of immense value. Operationally, NatSteel's finishing
facilities across the region provided Tata Steel with the necessary support for upstream
capacity expansions in India, as well as access to knowledge and expertise in downstream
processing of bars and wire rods.
The acquisition of Millennium Steel in 2005, Thailand's dominant steel producer, still
consolidated Tata Steel's gains from the NatSteel deal. Millennium's three operating units gave
the company a cumulative capacity to produce 1.2 million tonnes of steel per annum through
the electric arc furnace route along with a long products rolling capacity of 1.7 million tonnes a
year. Geared towards the construction and automotive sector, Millennium provided Tata Steel
strategic space in the heart of the ASEAN region, enhancing its market position in South East
Asia.
Apart from the existing backward integration with its own iron ore mines and collieries, the
company has enhanced its competitive advantage in raw materials further, buying a five per
cent interest in the Carborough Downs coal project located in Queensland, Australia. Its
backward and forward integration plans include the development of a deep-sea port in Orissa.
Through investments in Corus, Millennium Steel (renamed Tata Steel Thailand) and NatSteel
Holdings, Singapore, Tata Steel has created a manufacturing and marketing network in Europe,
South East Asia and the pacific-rim countries. Corus, which manufactured over 20 MTPA of steel
in 2008, has operations in the UK, the Netherlands, Germany, France, Norway and Belgium.
Tata Steel Thailand is the largest producer of long steel products in Thailand, with a
manufacturing capacity of 1.7 MTPA. Tata Steel has proposed a 0.5 MTPA mini blast furnace
project in Thailand. NatSteel Holdings produces about 2 MTPA of steel products across its
regional operations in seven countries.
Tata Steel, through its joint venture with Tata BlueScope Steel Limited, has also entered the
steel building and construction applications market.
The iron ore mines and collieries in India give the Company a distinct advantage in raw material
sourcing. Tata Steel is also striving towards raw materials security through joint ventures in
Thailand, Australia, Mozambique, Ivory Coast (West Africa) and Oman. Tata Steel has signed an
agreement with Steel Authority of India Limited to establish a 50:50 joint venture company for
coal mining in India. Also, Tata Steel has bought 19.9% stake in New Millennium Capital
Corporation, Canada for iron ore mining.
Tata Steel India is the first integrated steel company in the world, outside Japan, to be awarded
the Deming Application Prize 2008 for excellence in Total Quality Management.
The Tata Group made a huge acquisition in 2006 when it acquired the Dutch company Corus for
more than USD12 billion, making Tata-Corus one of the world's largest steelmakers.
Divisions:
Corus : Europe’s second largest steel maker with operations in the UK and
mainland Europe and over 40,000 employees worldwide. Its long and strip
products cater to the construction, automotive, packaging, engineering and
other markets worldwide. Corus is implementing major investments at its
plants at IJmuiden, in the Netherlands and at Scunthorpe in the UK as part of its
drive to strengthen product differentiation, improve operational efficiency and
reinforce existing competitive position, particularly in the construction and
automotive sectors, including the development of new advanced high strength
steels.
(www.corusgroup.com)
Tinplate Company of India Limited (TCIL) : With a market share of over 35%, it
is the industry leader in India. It has the capability to supply all tinning line
products including electrolytic tinplate / tin-free steel and cold-rolled products.
(www.tatatinplate.com)
Tayo Rolls Limited : India's leading roll manufacturer and supplier, the
company produces rolls which find application in integrated steel plants, power
plants, the paper, textile and food processing sectors, and the government
mint.
(www.tayo.co.in)
Tata Ryerson Limited (TRYL) : TRYL Is in the business of steel processing and
distribution. It offers hot and cold rolled flat steel products in customised sizes
and quantities through processing services and materials management
services.
(www.tataryerson.com)
Tata Sponge Iron Limited (TSIL) : TSIL is the first Indian sponge iron plant based
on Tata Steel's Direct Reduction Technology. Its major product lines are sponge
iron lumps and fines.
(www.tatasponge.com)
Tata Metaliks : Amongst the top wealth creating companies (EVA+) in the
country, Tata Metaliks is engaged in the business of manufacturing and selling
foundry grade pig iron.
(www.tatametaliks.com)
Tata Pigments Limited : TPL's range of products includes oxides of iron, dry
cement paint, exterior emulsion paint and distemper. Its products are used in
paints, emulsion, cement floors, plastic etc.
(www.tatapigments.com)
(www.jamipol.com)
(www.tmilltd.com)
(www.mjunction.in)
TRF Limited : TRF, one of India's leading companies in the business of design,
manufacture, supply, installation and commissioning of engineered-to-order
equipment and systems in the areas of bulk material handling, processing,
reclaiming and blending. TRF has also made its mark in the fields of coke oven
equipment, coal dust injection systems for blast furnaces and coal beneficiation
systems.
(www.trfltd.com)
Jamshedpur Utility and Service Company Limited (JUSCO) : Re-engineered out
of Tata Steel's town services, JUSCO is a wholly owned subsidiary of Tata Steel
and is the country's first enterprise that provides municipal and civic services
for townships. JUSCO is the only EMS 14001 civic services provider in the
country.
(www.juscoltd.com)
The Indian Steel and Wire Products Limited (ISWP) : Recently acquired by Tata
Steel, ISWP has two units - a wire unit comprising wire drawing mills, wire rod
mills and a fastener division and a steel roll manufacturing unit named
Jamshedpur Engineering and Machining Company - JEMCO.
Tata BlueScope Steel Limited : A joint venture with BlueScope Steel Limited,
Australia, Tata BlueScope Steel Limited offers a comprehensive range of
branded steel products for building and construction applications. The
Company is constructing a state-of-the-art metallic coating and painting facility
at Jamshedpur.
(www.tatabluescopesteel.com)
Dhamra Port Company, Orissa : A JV between Larsen & Toubro Ltd. and Tata
Steel Ltd., the company will build a deep-draft (18 metres) all weather port on
the east coast of India. The port will handle 80 million tonnes per annum of
cargo.
(www.dhamraport.com)
Hooghly Met Coke & Power Company : A joint venture with West Bengal
Industrial Development Corporation Ltd., HMC&PC envisages an annual met
coke production capacity of 1.2 million tonnes and 90 MW of electric power.
(www.hooghlymetcoke.com)
Lanka Special Steel Limited : The only unit in Sri Lanka manufacturing
galvanised wires.
(www.natsteel.com.sg)
Tata Steel Thailand : The company is the dominant steel producer in Thailand.
The company has the capacity to produce 1.7 million tonnes of steel for the
construction industry per year.
(www.tatasteelthailand.com)
Tata Steel KZN : Proposes to set up high carbon ferrochrome plant in South
Africa. The plant is slated to and commissioned by October 2007 with an annual
production capacity of 135,000 tonnes during Phase 1.
Tata NYK : A joint venture with Nippon Yusen Kabushiki Kaisha (NYK Line) for
setting up a shipping company to cater to dry bulk and break bulk cargo. Tata
Steel and NYK will each hold 50% stake in the joint venture company.
Corus has four main product segments: (1) strip products; (2) long products; (3) distribution and
building systems; and (4) aluminum.
TSL Products:
TSL’s bearings division manufactures ball bearings and taper roller bearings. Major customers of
the bearings division include companies in the automotive and engineering industries.
Corus Products
Corus has four main product segments: (1) strip products; (2) long products; (3) distribution and
building system products; and (4) aluminum.
Strip Products
Corus’ strip products are produced in the United Kingdom at Port Talbot and in The
Netherlands at IJmuiden. Uncoated strip products comprise hot rolled, cold reduced and
electrical steels, which are sold both in coil form and, cut to length, in sheet form. Corus is one
of the market leaders in the manufacture of coated strip products.
Its coated strip product range comprises metallic coated products (e.g. zinc and alloy-coated),
non-metallic coated products (e.g. painted and plastic coated steels) and tinplate. Corus is also
one of the global market leaders in steel for packaging production.
Long Products
Corus produces long products at Scunthorpe, its largest steelmaking site in the United Kingdom,
and at Teesside. Long products comprise sections and plates, and rods. Engineering steels also
form part of the long products division and are produced by the electric arc method as opposed
to the basic oxygen steelmaking method in the United Kingdom at Rotherham. Corus’ wide
range of engineering steels products include free cutting, improved machining, spring, forging
and general steel for the automotive and related markets, together with specialist steels for the
aerospace, power generation, oil and gas exploration and engineering industries. Corus also
produces a variety of other carbon steel products. In addition, Corus supplies a range of semi-
finished carbon steel products in the form of billets, blooms and slabs for re-rolling and
subsequent processing for Corus’ service centers and to third party service centers.
Distribution and Building Systems
Corus sells its finished carbon steel products directly to end users and through its own
stockholding and service center businesses. Stockholders purchase steel from high-volume
producers for subsequent resale, and service centers purchase steel stocks for further
processing prior to selling to customers. The stockholding and service center section plays a
major role in the distribution of most finished products. In addition to offering rapid off-the-
shelf service to low volume customers, major U.K. stockholders and service centers, including
Corus’ business, increasingly offer further processing facilities to the automotive, construction
and earth-moving equipment industries, among others. Typically, the large volume purchasers
buy directly from Corus’ business units, while low volume customers buy from stockholders and
service centers, including those owned by Corus.
Aluminum
On August 1, 2006, Corus completed the sale of its downstream aluminum rolled products and
extrusionsbusinesses to Aleris International Inc., for a net consideration of GBP 477 million,
subject to adjustment. Turnover and operating profits from Corus’ aluminum division now only
reflect retained aluminum smelting and metal trading operations. Corus’ primary aluminum
smelters produce rolling ingots and billets made from alumina (processed bauxite) using an
electrolysis process. Approximately 75% of this division's 272,000 tonnes output is dedicated to
the downstream operations that were sold to Aleris International Inc., with the remainder sold
to external customers under tolling or direct sales contracts.
Tata Steel Limited’s principal products for the Indian automotive industry are hot rolled sheets,
cold rolled sheets and galvanized products. Tata Steel Limited’s Indian operations supplied
664,000 tonnes of products to the Indian automotive industry in the year ended March 31,
2006 and 856,881 tonnes in the year ended March 31, 2007. Tata Steel Limited supplies such
automotive-grade steel products to a significant proportion of Indian automotive industry
participants, including Tata Motors, Mahindra & Mahindra, Toyota Kirloskar Motor Limited,
Honda Siel Car India and Honda Motorcycle & Scooter India Limited. Tata Steel Limited’s
principal products for the Indian general engineering industry are cold rolled sheets and
galvanized sheets. Tata Steel Limited also a supplier of steel to the appliance sector, including
to customers such as Whirlpool, LG and Voltas.
Indian Distribution and Marketing
Tata Steel Limited delivers steel products to Indian customers through:
Because Tata Steel Limited’s operations are located in eastern India while much of the market
for steel is on the west coast of India, Tata Steel Limited incurs additional inland transportation
costs relative to its competitors that are in closer proximity to the bulk of the Indian market. In
addition, Tata Steel Limited’s Jamshedpur plant is approximately 250 kilometers away from the
nearest port, which adds to Tata Steel Limited’s distribution costs.
Tata Steel Limited has established brands for many of its products in the Indian market. For
example, Tata Steelium, the “steel with soul”, is one of the first branded cold rolled steel
products in India. Tata Steel Limited is also using the Tata Shaktee brand for its corrugated
galvanized sheets, Tata Steelium for cold rolled sheets, Tata Tiscon for rebars and Tata Wiron
for wires. Products manufactured by Tata Steel Limited’s tubes unit are marketed under three
brands: Tata Pipes, Tata Structura and Tata Precision.
Tata Steel Limited has introduced a number of marketing initiatives in recent years. For
example, Tata Steel Limited was the first company in India to introduce the concept of a
recommended consumer price on a steel product, by fixing the price of Tata Tiscon products for
a set period of time according to a pre-determined price list. In 2006, through its Steelium
service center, Tata Steel Limited trained through 29 sessions in eight different languages,
approximately 550 dealers of Tata Shaktee products on various selling techniques. Through
initiatives such as “Customer Value Management” and “Retail Value Management”, Tata Steel
Limited has developed new collaborative approaches to meet its customers’ needs. In addition,
on December 12, 2005, Tata Steel Limited inaugurated its Steeljunction store. As India’s first
organized steel retail store, Steeljunction is a mid-size specialty store that sells a range of steel
products. The store was launched with the aim of raising awareness about the versatility of
steel products and to promote a new and more direct venue for selling steel products to end-
users.
Corus has a number of stockholders and service centers in various EU countries. The
stockholding and service center sector plays a major role in the distribution of most finished
products in the EU steel market. In addition to offering rapid off-the-shelf service to low-
volume customers, major stockholders and service centers, including Corus’ businesses,
increasingly offer further processing facilities to sectors such as the automotive, construction
and earth-moving equipment industries. Corus’ service center network consists of over 60
service centers across Europe, including in the United Kingdom, Ireland, France, Germany, Italy,
The Netherlands, Poland and Spain, which supply and process over 4 million tones of steel and
aluminum each year.
The Corus International unit is responsible for managing Corus’ network of sales offices
throughout the world. Its trading division operates on a global basis buying and selling steel
both internally and externally, while its projects division also operates globally and is
responsible for sourcing multi-metal requirements and providing supply chain services on major
construction projects. Corus has established a range of branded products across its portfolio.
One of the more recent brands, the ‘Advance’ range of structural sections, was launched in
September 2006 following a program of technical improvements at its Scunthorpe and Teesside
plants. The key driver for introducing Advance was the requirement, starting in September
2006, for structural sections in Europe to comply with the Construction Products Directive.
Corus was the first steel company to be allowed to use the CE mark and all Advance sections
carry the mark. At the same time flexibility offered to designers has been increased by adding
21 new beams and columns sizes to the range, as well as introducing a simplified method of
steel grade specification and a new section designation system.
A programme was launched to use the company’s own poor quality coal
(from its captive mines) for making good quality coke. At that point of time,
however, there was no technology anywhere in the world that could be used to
convert poor quality coal into high grade coke.
The new technology reduced the use of imported coal for coke to a large
extent. This has given the company significant sustainable cost advantage
because Indian coal is relatively low-cost and the company has an unlimited
supply of medium coking coal.
Addressing Overstaffing
The top management of the company was rudely awakened when, in the
early nineties, it went overseas to raise US $ 100 million from international
investors. Potential investors acknowledged Tata Steel as a good company but
were unhappy that it was grossly overstaffed. Its employee strength was well
beyond international norms.
Modernization of Facilities
Many of the initiatives discussed above resulted in improving the
performance of the existing assets. Simultaneously, the modernization of the
facilities became an important focus area. Although the initiative for
modernizing the plant started a few years prior to the liberalization of the Indian
economy, it gained urgency and momentum during the post-liberalization period
as the company had to grapple with the new realities of the environment. The
modernization process took over a decade to complete. These were difficult
years in terms of cash flows and liquidity. The company resorted to increased
borrowings to finance the modernization projects. The hot roll mill (1993) and
the cold roll mill (CRM) (2000) were set up to enable the company to move
towards the production of higher value-added products.
Accountability Issues
The willingness of the top management to create total transparency and
subject its performance to discipline and scrutiny of the entire organization
helped greatly in bringing about a mental transformation in the entire
workforce. The company relies heavily on the balanced scorecard, a
performance management and strategy deployment method developed by
Robert Kaplan, a Harvard Professor and David Norton, a Consultant, to break
down strategy into its component elements and track performance across the
organization starting from the Managing Director. It defines KRAs for the top
managers which are then cascaded down. The Managing Director’s balanced
scorecard is widely known across the company. A similar culture of transparency
prevails at other levels as well such as at the Vice President and Department-
head levels.
More than the use of tools and techniques, Tata Steel’s journey to international
competitiveness had much to do with the personal commitment and change-oriented
leadership of its top management with an intense focus on the 3Cs: change, costs, and
customers.
The top management’s checklist for driving change in the company included the following:
Lead the change process and take personal ownership; the responsibility cannot be
delegated.
Be the role model and the first to change; personal involvement and investment of time
is the key to success.
Create endless opportunities for two-way communication within the company.
Create a sense of urgency (not panic); embrace change even when it does not appear
necessary.
Set up a small hand-picked group to drive change in the organization; train and
empower them.
Set key result areas (KRAs) carefully; include the top management in it. In Tata Steel, this
is now done through the Managing Director’s balanced scorecard. Through this process,
the Managing Director puts himself through the credibility test by including himself in
the accountability process.
While retailing has been central to FMCG and consumer durables for years, there were no
practical examples for the company to emulate on how the company should break the shackles
of unstructured retail to pioneer a retail story. RVM provides such a stellar example. Tata Steel
has found that the actual process of implementing such a significant change in the functioning
of the retail channels in the steel business requires investment of considerable resources, time,
and effort of the company including its top management.
Essential philosophy of TOP programme
In the case of a large corporation such as Tata Steel, it requires a complete change in
organizational culture, structure, incentives, and mindset. Tata Steel went for a home-grown
process to implement RVM by adopting the TOP methodology (that the company earlier
perfected to achieve drastic improvement of its plant operations). Through RVM, it ‘cleaned up’
the working of the retail channels.
Of late, selection of market entry points for expansion to rural areas has become a major long–
term decision for steel producers. It was 2000–2001 when for the first time the second largest
player in Indian steel industry—TATA Steel acknowledged the presence of millions of small
retail steel consumers in rural areas and thought of reaching these consumers directly. TATA
Steel launched its Retail Value Management (RVM) program in 2002. The purpose of RVM was
to redefine the concepts of retailing in steel and upgrade the retail network to more than 4000
retailers across the sub-continent to directly service the rural market (Mandal, 2006). Thus it is
imperative to adopt a scientific approach to identify rural market entry points. This research
study could be construed as a step in that direction. We envisage the taluka/tehsil/block
(henceforth to be referred to as ‘block’) to be the entry points for rural steel retail.
Through the RVM process, Tata Steel has attempted to map the market place in detail in terms
of current distribution, channel capabilities, retailers, demand intensity and specific customer
needs. The focused approach here is to increase the number of foot falls in their shops so that
their business grows at a faster pace vis-à-vis other retailers. This requires support to them in
terms of advertising, participation in events, authorizing them to represent Tata Steel in
panchayats, etc. Tata Steel also conducts specific training programmes for their sales personnel.
Continuous consumer research has helped Tata Steel to identify the needs, in the market place.
Feeding this information back to the retailers has helped them to further improve their position
in the market place.
A unique programme, “World Class Work Force” was launched at the Ferro Alloys Plant,
Bamnipal to upgrade the skills of employees to world class standards.
The Bearings division has emerged as a preferred supplier with Hero Honda Motors Limited
(HHML) and Toyota Motors. Hero Honda has conferred on Tata Steel the status of “Direct On-
Line Supplier”. Toyota Qualis has recognised Tata Bearings as a ZERO ppm supplier.
In keeping with the effort of unlocking value through initiatives like Customer Value
Management and Retail Value Management, Tata Steel continues to work with customers to
assess on-going progress and to generate new ideas that benefit the customers.
Two distinct profit centers, viz., flat products and long products were created, each headed by a
Vice President (VP), who was responsible for both manufacturing and sales. A key challenge
was how the sales force, which was essentially the same set of people from yesteryears, could
be energized to take up the new challenges.
Based on a detailed analysis of the customer base of Tata Steel, the company came up with the
following three categories of business market customers:
The investments made by the company in modernization and various related initiatives in its
plant during the recent times had further strengthened its market image as a quality producer.
The brand new cold rolling mill of international standards that was commissioned during 2000
was the first of its kind in India. A new galvanizing line, which was part of the cold rolling mill,
produced steel of intricate specifications for the first time in the country. This line catered to
high-end applications for the automotive and appliance segments. The company made some
headway in setting up service centers across the country to deliver products to its customers
using the principles of JIT (just-in-time) manufacturing.
These, along with its innovations in processed steel materials as well as technology-related
improvements in long and flat products, had positioned Tata Steel as a benchmark of sorts in
the Indian steel industry.
Yet the predominant mindset of the company with regard to the sales function had not
undergone significant transformation vis-à-vis the previous ways of doing things. As Tata Steel
had to meet the sales targets at the end of each month, steel would be thrust on to its business
market customers at the end of each month even if the customers did not need the material.
Consequently, the customers would often find ways to delay the payment. The purchase
managers of the customer firms were typically the sole points of contact for Tata Steel’s CAM.
It was not uncommon for the customers to squeeze Tata Steel on price frequently demanding a
3 to 5 per cent drop in price each year. With the resulting suspicion on the part of both, it was
clear that neither was gaining from the relationship. Customers clearly began to have many
options. The company became acutely aware of the fact that it needed to find ways to come
out of the commodity trap.
The company found answers to these issues and launched customer value management (CVM)
initiative for business markets and retail value management (RVM) for its retail markets. CVM
and RVM have redefined the way steel is marketed and sold in the country and have placed the
company firmly on a trajectory of profitable growth. These were relentlessly driven by the top
management and, in a span of about four years, the entire sales and marketing was brought on
par with the best practices of the top steel plants anywhere in the world.
Branding Steel
The profitability of the steel industry in India is generally linked to business cycles, reaping
profits when economy is going well and eroding them when it is in depression. In the late
1990s, the Indian steel industry was experiencing a glut in the market which strongly affected
the profit margin of all related companies. To reduce its dependence on the external
environment and business cycles, Tata Steel adopted a strategy which stressed the following
two points: branding its products and moving to high value added products.
The company soon realized that a strong customer focus is essential if any branding approach
was to be successful. It soon began to introduce internal campaigns in order to bring the
customer-centric message to its employees. In the late 1990s, the company launched several
internal marketing programs to emphasize customer focus and service. The programs had
taglines such as, “customer first – her haal mein” (Customer comes first in any case), “customer
first – her haal mein, her saal” (customer comes first in every case, every year), “customer ki
kasam – hain taiyaar hum” (We pledge to the customer that we are ready for him). These are
the mantras behind Tata Steel’s success. This transfer from producer logic to customer logic
was seen as the path to influence customer behavior for mutual gain.
Before jumping on to the brand wagon, Tata Steel set up a branding task force in January 2000
to explore the possibilities of branding Tata Steel products. Only three months later, the task
force evolved into a brand management department. Within this department they created the
distinct sub functions “market development”‘, “order generation” and “order fulfillment”‘
which were computerized, enabling Tata Steel to reduce its customer response time
significantly. The company also initiated the concept of “customer account managers” who
were authorized and empowered to solve specific customer grievances immediately. The
company furthermore sought to increase customer interaction in order to better understand
customer needs and to explore new and improved ways to meet these needs and expectations.
Tata’s second area of key focus was to shift into the domain of high value added products. In
April 2000, Tata Steel launched its first branded product, along with the commissioning of its
CRM plant. Tata Shaktee is their brand for galvanized corrugated sheets. Eight months later the
company introduced its second brand, Tata Tiscon (re-bars) for rods used in the construction
industry. In February 2003, Tata Steel launched another product brand Tata Steelium. By
September 2003, Tata Steel had three products as well as three generic brands in its brand
portfolio, as Tata Pipes, Tata Bearings, and Tata Agrico (hand tools and implements) and Tata
Wiron (galvanized wire products).
“To beat the industry trend in a situation of over supply we need to move away from selling
commodities into marketing brands. Even as we will continue to leverage and take to greater
heights the value of the Tata brand there will be efforts to create new images and associations
for our services our product in current as well as new businesses”
The leader of the company had decided that branding the commodity steel would provide them
a unique selling proposition in a great way. Branding Steel would help Tata Steel in two big
ways: It would help stabilize the flow of revenues even during business downturns, and it would
make premium pricing possible. Similar development could be noticed in other steel companies
around the world. Usinor Steel, today part of Arcelor Steel conglomerate established in 2000 a
clear set of product brands which propelled their sales to new heights. Tata went on a similar
road. Because the corporate brand Tata was already associated with various products and
attributes the company decided not to put the main focus on it but to create subbrands with
separate identities, supported by the corporate brand as co-driver. At that time the Tata group
was involved in a wide range of product and service categories ranging from automobiles to
software and was one of the biggest industrial houses of the country. They had learned from
the European competition that specialty product offerings and strong brand associations had
guarded the market against the low cost importers from the Far East. Tata Steel wasn’t the first
company to brand its steel in India. Other steel companies are hoping to keep their bottom-line
healthy by producing branded steel in their furnaces that customers will ask for by name. But
Tata was pushing ahead with its ambitious plans to ensure that larger quantities of its steel are
branded in the coming years.
At the beginning, one of the major obstacles Tata Steel had to overcome was its inexperienced
marketing personnel. Their knowledge of branding techniques was quite limited and moreover,
many of them had doubts about the feasibility of branding steel. As a solution they started
several training programs for them and organized seminars and workshops where experienced
people from other sectors came and spoke to employees regarding various issues related to
branding. It also formed separate marketing teams for its “long” and “flat” products, keeping in
view, the different approaches required for both. The positioning reinforces especially the
brand’s leadership position, both in the market place and in the minds of the Indian consumer.
The communication tools used for the brand launches were primarily print ads and outdoor
advertising. Yet, they also created TV commercials that portrayed signs of happy customers and
employees reveling in the concern the company had for them. “We also make Steel” was the
punch line that signaled the triumphant finale of that TV ad. They also began to engage in
community welfare programs. They were instrumental in controlling AIDS in the state of
Jharkhand, by their AIDS awareness initiatives. Many such programs for community and
employee welfare put Tata Steel well ahead in terms of Corporate Social Responsibility
practices in the industry. Around 60 per cent of Tata Steel’s products are sold through contracts
– quarterly, half-yearly or annually – and so these products are naturally protected from price
fluctuations. It is, therefore, the remaining 40 per cent that are subject to price fluctuations.
This is where branding becomes important. Tata Steel is spending between 1 per cent and 1.3
per cent of brand-related turnover to establish the brands, and it pays off. The company claims
that as a product example, Tata Agrico currently commands a premium of 15 per cent over
competing brands. Company sources say there are plans to increase Agrico’s market share even
further than 25 per cent. Keeping customers is only one side of the picture. At another level
steel companies have come to believe that branding can create a greater level of awareness
and interest at the shop floor level. The theory is that if workers know where their products are
headed and what they will be used for, it creates a higher level of commitment. Value
Management Tata recognized earl on that their employees were essential assets in the course
of becoming more customer-focused. Therefore it adopted a program of Retail Value
Management, under which the company provided training to sales people recruited by the
retailers to help increase sales. In a region in northern India, for instance, sales teams trained by
the company approached local architects and convinced them of the advantages of using more
steel, resulting in a doubling of the market share of Tata Tiscon in that region. One of the most
important things in branding is to know who you are actually messaging to. One of the major
implications that Tata undertook in the course of their branding efforts was a concise target
group check and distribution revamp.
Fig. 1 Tata Steel print advertising, source: www.tatasteel.com
The company was actively involved in bothB2B and B2C areas. The B2B customers were mainly
automakers Maruti, Telco and Ford, who with their knowledge of steel helped the company to
focus on product quality on a holistic way, negotiating for specifications and discussing the
advantages of using different grades of steel. When Tata Steel scrutinized its customer base, it
revealed the quite common Pareto effect in the allocation of total sales related to customers.
Only 200 large industrial customers were providing the big chunk of its total sales – 80 percent
– while the remaining 20 percent were contributed to by around 5,000-6,000 smaller
customers. The logical consequence was to adopt different sales strategies for B2B and B2C?.
For the 200 key accounts that made up for 80 percent of the sales, the company started an
extensive Customer Value Management program. Under this program they allocated a whole
team consisting of people from various departments of the company to one customer.
Future Prospects From the beginning, the branding initiative of Tata Steel showed impressive
results. Tata Steel’s corporate sustainability report for 2003-04 states that the sale of branded
products increased by 84 per cent. This resulted in a share of branded products as a percentage
of total turnover of 22 percent in that fiscal year. The future expectations and prospects of the
company are also very positive. Today, Tata Steel is already one of the best branded names in
steel industry and has already started initiatives in the co-branding arena with high end
customers like Ashok Leyland and Telco. Looking to the future, Tata Steel has announced that
the company would be focusing on co-branding initiatives with its high-end customers such as
Telco, Ashok Leyland. Company sources say that initially Tata Steel would be focusing on the
automobile sector; later the co-branding initiative will be expanded to the consumer durables
sector also. Just recently, in November 2005, Tata Steel and BlueScope Steel announced that
they have agreed to enter into a partnership and form a new Joint Venture company in India.
The 50/50 Joint Venture Company will build a new business across India and South Asia that will
manufacture zinc/aluminum metallic coated steel, painted steel and rolls formed steel
products, and deliver pre-engineered buildings (PEBs) and other building solutions. The new
company will offer a comprehensive range of branded steel products for building and
construction applications.
The steel industry has been racing along at a surprisingly high speed during recent years, largely
due to the huge buying from China. Tata Steel has also done extraordinarily well as the industry
moved upwards, but the next big challenges are already seen on the horizon: global reach with
global branding.
Corporate Sustainability:
Regarded globally as a benchmark in corporate social responsibility, Tata Steel's commitment to the
community remains the bedrock of its hundred years of sustainability. Its mammoth social outreach
programme covers the company-managed city of Jamshedpur and over 800 villages in and around its
manufacturing and raw materials operations through uplift initiatives in the areas of income generation,
health and medical care, education, sports, and relief.
The Company, fully conscious of its responsibilities to the future generations, has always taken pro-
active measures to ensure optimum utilization of natural resources. This is reflected in the ISO-14001
certification that all its operations have achieved for environment management. The SA 8000
certification for work conditions and improvements in the workplace at the steel works in Jamshedpur,
along with its Ferro Alloys and Minerals Division, is a reiteration of its commitment towards the
Company's employees. Tata Steel has pioneered numerous employee welfare measures such as the 8
hours working day and the three tier joint consultation system of management which have been the
platform for nearly 80 years of industrial harmony in its Steel Works in Jamshedpur.
Having espoused the philosophy of Sustainable Development, the Company’s operations, including all its
out locations are inextricably interlinked with the progress of the enterprise, the welfare of the people
and the health of the environment.
As global initiatives in promoting responsible business gather momentum, Tata Steel stands as a beacon
of social and environmental commitment, not only in India but across the world as well.
Today, Tata Steel is well positioned to take forward its 100-year ethos with renewed vigor, having
formally integrated its economic, environmental and social performance reporting. Tata Steel’s
commitment to sustainable development and growth is amply reflected in its Vision. The Company has
identified and is proactively engaged in addressing economic sustainability, environmental concern and
the social needs of its stakeholders.
The core issue, however, identified by Tata Steel, which underpins all these is Value Balancing; such that
long-term partnerships are established with its stakeholders.
Sustainability has also been integrated into the business systems at Tata Steel. Inputs from stakeholders
through formal and informal processes allow the Company to focus on their concerns, to identify issues
and delineate strategic objectives.
Tata Steel is Asia’s first and India’s largest private sector integrated steel manufacturer. The Company in
2008 co-created a shared vision with its employees of becoming a global benchmark in Value Creation
and Corporate Citizenship. Although the Corporate Citizenship concept in Tata Steel has evolved
considerably over the years, it has been reinforced by goal setting, measurement and reporting across
the organization. Sustainable Development, through the improvement of the quality of life of its
employees and the communities it serves, is enshrined within it. To translate this Vision into reality, Tata
Steel has altered paradigms, repositioned benchmarks and has re-evaluated its core competencies.
TBEM:
According to a report by World Steel Dynamics (WSD), in April 2001, Tata Steel(TISCO) was ranked as the
world's lowest cost producer of steel (Refer Exhibit I). TISCO's operating cost at the 'hot metal' (liquid)
stage was $75 per tonne. The company's cost per tonne of finished steel stood at $152 in the financial
year 2001. The ranking was based on several factors including low operating costs, special company
culture, good profitability, skilled and productive workforce, high quality and niche products and
proactive and experienced management. According to the media reports, TISCO's achievement of
becoming the lowest cost producer of steel in the world was mainly attributed to the company's
successful implementation of the Tata Business Excellence Model (TBEM).
Based on the Malcolm Baldrige Award, TBEM aimed at establishing a link between business
performance and individual performance. TISCO was the first and only Tata group company to achieve
the JRD QV award (Refer Exhibit II) in 2000, having scored 616 points out of 1000 points on the TBEM
scale. The adoption of TBEM had helped not only TISCO, but also several other companies in the Tata
group (Refer Exhibit III) in enhancing the quality of their business processes.
The objective of TBEM was to facilitate every Tata group company achieve business excellence and
establish themselves as leaders in their respective industries. The implementation of TBEM had
benefited several Tata group companies by improving their productivity significantly.
R Gopalakrishnan, Executive Director, Tata Sons Limited,5 commented on the benefits of TBEM: "The
renewal of Tata group is principally on the basis of TBEM. The model itself is under constant updation so
as to keep itself fresh, vibrant, and contemporary. The model has done a great deal of good for the Tata
group as a whole."
The significance of 'organizational excellence' was not much appreciated in the corporate sector as late
as 1982, when Thomas Peters and Robert Waterman's book, 'In Search of Excellence' was published.
Earlier, organizations focused on a single aspect to improve quality, for example, improving product and
process, or systems quality.
However, focusing only on a single aspect was considered insufficient in improving the overall
organizational performance. Peters and Waterman proposed that there was a need for a broad-based
business excellence model for businesses that should focus on an organization-wide thrust to improve
quality.
In 1987, Malcolm Baldrige proposed a business excellence model for achieving organizational excellence
in quality management. Companies that successfully adopted the model were given the Malcolm
Baldrige National Quality (MBNQ) Value Award, introduced in the US in 1988. This award was conferred
exclusively on the US-based companies.
Further to the above developments, the Tata Group introduced the Tata Business Excellence Model in
1996. By implementing TBEM, the management of the Group aimed at bringing about organizational
transformation, which was necessitated by the rising global competition. The objective of TBEM was to
improve the performance and efficiency of the Tata Group in various business areas and to enable them
to successfully overcome the global competitive challenges. However, the management felt that the
attitudes and perceptions of people had to be changed first before a major change could be brought
about in the functioning of the organization.
Business excellence has been embedded in the Tata Group through a holistic methodology that enables
companies to heed the call of quality. We have adopted the Tata Business Excellence Model (TBEM) to
achieve well-defined levels of business excellence.
TBEM is a framework defining the quality movement in the TATA Group. It has been adapted in the early
1990’s from the renowned Malcolm Baldrige archetype. The Model works under the aegis of Tata
Quality Management Services (TQMS), an in-house organisation mandated to help different Tata
companies achieve their business objectives through specific processes.
The TBEM methodology has been moulded to deliver strategic direction and drive business
improvement. It contains elements that enable us to capture the best of global business processes and
practices. It translates into an ability to evolve and stay in step with ever-changing business performance
parameters.
Sustainable development is about adding value to our products and services with focus on customers,
shareholders, employees and local community in which we operate and more widely to regional and
national development. Our Policies, Statement of Purpose, Vision and Mission statements are deployed
through a well-structured and defined business model called Tata Business Excellence Model (TBEM).
These statements act as guiding principles for development of organizational structure and action plan
with clear-cut delineation of responsibilities and authorities. Sustainability concerns are built into the
model through “Leadership” that is founded on Tata Values, Code of Conduct, Policies and Guidelines.
The management leadership prioritises the concerns of stakeholders based on current business needs
market situation and the need to improve the quality of life of the “communities Tata Steel serves”. The
targets are set based on the historical data, technological and financial constraints and the industry
benchmark as shown below:
Style in steel
Steeljunction, the new steel retail outlet from Tata Steel, combines innovation,
functionality and style, to offer a never-before range in steel lifestyle products
Next time you're in Kolkata and want to buy some jewellery, you might want to hop across to check out
the spanking new steel mall. Yes, you heard it right. Steel is no longer restricted to unglamorous kitchens
and washrooms. Steeljunction has made it a trendy product that makes a lifestyle statement.
India's first organized steel retail store, you can shop for stylized furniture, objects d'art, kitchenware,
crockery and cutlery, bath fittings, garden tools, fitness equipment, home security products and wire
products. There's also jewellery, some of which is even stone-studded.
The mall has two levels. The ground level has the more functional home construction and maintenance
products department, while level one houses the home aesthetics department. Wide aisles, a warm
ambience, concept kiosks with innovative product displays and pleasant sales personnel to answer your
queries make shopping here a happy experience. The mall has thoughtfully provided ramps for
wheelchair access.
Tata Group Chairman Ratan Tata described it as an impressive and farsighted initiative. He said, "I am
proud to know that Tata Steel is paving the way and stretching the envelope to show how steel touches
us in our daily life."
The idea took shape in November 2004, when Tata Steel managing director B Muthuraman approved
the concept of a steel retail store. A retail initiatives department was formed, and the mall opened a
year later. Says Sumit Ray, chief, retail initiatives, "The project seeks to cover the last mile of the
distribution channel that has been meticulously developed by Tata Steel. It will help in building an
emotional connect with the end customer."
In this new avatar, steel has struck a chord right away. What catch people's fancy is its beauty, low
maintenance and eco-friendliness. Mr. Ray elaborates: "The key objective is to support Tata Steel's
quest to catalyze steel consumption in India's emerging mass market and to build downstream retailing
excitement for steel as a category." The vision is to create a unique retail experience displaying the
versatility of steel, from its functionality to its aesthetics.
It's not just retailing. steeljunction also serves as a platform for vendors and manufacturers to
understand consumer behavior. It helps them to innovate and develop newer products and services that
add value to the end customer. It makes steel buying a pleasant experience.
The mall gets an average of 400-plus footfalls daily. Sales have been brisk and continue to grow at 20 per
cent. The clientele is varied, from local contractors to high-end interior designers. Steeljunction also
caters to bulk orders from small and medium enterprises (SMEs), restaurant owners, offices and
hospitals.
A unique feature of the store is the Knowledge Centre, which offers a wide range of information on
things related to steel. But it has a more critical role to play than merely sharing steel trivia. The centre
designs and hosts a variety of in-store promotions and programmes to attract increased footfalls. It
studies buyer needs and behavior, develops systems and processes, and shares this with retailers and
distributors. This, it is hoped, will boost steel retailing at large.
The sections in the store are arranged in real-life settings. The concept, believes the team, makes the
wares on display much more appealing. Designed by Manashi Interiors, the décor is similar to any up-
market mall. Steeljunction even boasts of its own coffee counter that, incidentally, is Café Nescafe's first
outlet in Kolkata.
Besides Tata Steel brands, the mall showcases wares from other steel makers. Shoppers can choose
products from Tata Agrico, Parryware, Magpie, Ess Ess, Art-d-inox, Tata Tiscon, Taparia Tools, Godrej,
GKW, Neelam, Faber, Franke, ST Unicom, and Glen, to name a few.
Steeljunction hopes to forge better relationships and partnerships, to develop new products and
increase its offerings. It is also working with architects to explore ways to increase use of the metal in
the construction sector.
So far, the going has been good. The retail initiatives department hopes to set up a few more stores
across the country soon. "We will keep a close watch on the progress of this store and use the
experience to roll out more stores across India," says Mr. Ray.
Steeljunction's small but exuberant team is enthusiastic, and is rooting for more in the months to come.
So, the next time you need bathroom fittings, kitchenware, furniture and gardening tools, and this store
could be a one-stop destination. Rest assured, your visit will be rewarding.
Knowledge Management in Tata Steel:
Tata Steel decided to embark on formal KM initiative in the year 1999. The beginning was made
in July’99 to place a Knowledge Management (KM) programme for the company to
systematically & formally share and transfer learning concepts, best practices and other implicit
knowledge.
The emphasis on knowledge management was clearly demonstrated in 1999 while coining the
vision statement of the company – which read “Tata Steel enters the new millennium with the
confidence of learning and knowledge based organization…..” Then followed the new vision
statement, co-created by the employees in 2001 (which again identified ‘Manage Knowledge’
as one of the main pillars in strategy to become EVA+ by 2007. This clearly indicated the thrust
Senior Management wanted on an initiative like KM. .
The essence of Knowledge management is to capture the available abundant knowledge assets
either in form of tacit (experience, learning from failure, thumb rules, etc.) or explicit
(literature, reports, failure analysis etc.), to organize and transform the captured knowledge,
and to facilitate its usage at right place and at the right time.
Stakeholders in KM
Tata Steel aims at capturing knowledge from various working groups and outside agencies who
play a major role in day-to-day functioning. The major stakeholders covered under KM being:
Senior Management
Officers
Employees (Supervisors & Workmen)
Customers
Supplier
Experts (In & outside company)
Opportunity of knowledge transfer
Tata Steel’s knowledge management initiative is driven by its corporate KM group which
attempts to cover all possible opportunities of knowledge generation in and outside the steel
works. The primary sources being:
Day-to-day operation
Engineering Project
Tata Steel defines its value chain as a connected series of internal and external
organizations, resources, and knowledge streams involved in creation and delivery of
value to end customers. It includes the organization’s suppliers and customers. In fact,
one of the organization’s strategic goals is to develop value-creating partnerships with
customers and suppliers. Tata Steel developed two programs in particular to help
manage knowledge across its value chain: the customer value management (CVM)
program and its supplier value management (SVM) program.
Improvement Activities
The most important milestone in the company's history is its transition from a company
operating in a controlled economy to one that is flourishing in a globally competitive
environment. The quality of Tata Steel’s products was not the best and cost of production was
high. A culture of continuous improvement was ushered into the company. Apart from quality
circles, value engineering and quality improvement projects, the Company undertook a
programme called 'Total Operating Performance' (TOP) which help in increasing our focus of
cost and improving throughput.
Within the Tata Group, Tata Steel was in fact one of the first to adopt the Tata Business
Excellence Model (TBEM). It helped Tata Steel to detail its business processes, benchmark with
the best and improve them. In the last few years we have adopted several other initiatives such
as TPM, Six Sigma, Aspire and Theory of Constraints. The Company is now in the process of
bringing improvement initiatives under a single umbrella of Aspire T3 which comprises TOC,
TQM and Technology to enthuse its people to newer heights of excellence.
ASPIRE includes improvement tools like Suggestion Management, VE, TOP, Six Sigma, TPM,
Knowledge Management, TOC and some others. The broad improvement processes relate to
TQM principles of Daily Management, Policy Management, Problem solving and Task achieving
under the Aspire model.
The various improvement initiatives adopted by Tata Steel which are recognized as Aspire Tools
are:
Why do so few corporations do business the Tata way? There is a catch. First, every single
employee working for TATA companies, from the CEO to the most recent intern share in the
deep values of their leaders, still a guidepost for every new project within the group. Second,
Tata companies have evolved a collective commitment to evolving stronger connections
between their values and first- in-class business practice – not by putting either one ahead of
the other, but by finding mutually beneficial bridges between them.
“In a free enterprise, the community is not just another stakeholder in business, but is in
fact the very purpose of its existence.”
Jamsetji N. Tata (Founder, Tata Group, 1868)
“The Tata philosophy of management has always been and is today more than ever, that
corporate enterprises must be managed not merely in the interests of their owners, but
equally in those of their employees, of the customers of their products, of the local
community and finally of the country as a whole.”
– J. R. D. Tata
Starting in the early 1990s, the group has invested in structures and processes that would
gradually align its pro-social and pro-environmental values with excellence in business
endeavors. These efforts culminated in 2003 with the introduction of The Tata Index for
Sustainable Human Development, a pioneering effort aimed at directing, measuring and
enhancing the community work that assists all TATA companies in their social responsibility
efforts. The index had been developed by the TATA Council for Community Initiatives (TCCI), a
council of Tata companies CEOs chaired by Mr. Kishor Chaukar, in partnership with TATA
Quality Management Services (TQMS). Since June 2004, the Tata Index has been deployed
annually to assure continuous improvement in the delivery of social responsibility initiatives at
the company level. In 2005, reporting companies averaged almost half of its intended goal, i.e.
452.95 points on a 1000 point scale, with companies scoring as high as 712 (Tata Steel). In
2006/07, TCS scored 490. Tata Motors, now at 663, was one of the best performers on
corporate sustainability within the group.
The purpose behind the Index was to seed new benchmarks and motivate continuous
innovation in sustainability across each company’s operations. TCCI offered a common platform
where each company could share their challenges and achievements with the others and would
learn how to nurture stronger internal leadership structures that promoted business excellence
“the TATA way”.
The idea of explicitly tracking social impact originated with Tata Sons. Under the Chairmanship
of Mr. Ratan N. Tata, the Group searched for a new way to harness collective synergies among
the Tata companies. This led to the Business Excellence Model (TBEM), a detailed business
process reform which began formalizing the set of core values that the Tatas had lived by for
over a century. One of the offshoots of this effort was the adoption of a more systematic,
unified TATA approach to CSR, rooted in Jamsetji Tata’s social legacy, and the creation of the
Tata Index for Sustainable Human Development, a trendsetting approach to mapping and
measuring the social development endeavours of Tata Group companies.
The Index itself was a remarkable innovation. First, it broke down sustainability responses into
three nested levels: systems (275/1000), people (175/1000) and program (550/1000), making it
easy to measure, and easy to identify areas for improvement.
Second, the indexation exercise places great emphasis on process – not just outcomes. For
example, here is how a company might apply the index to its own operations:
For each assessment, the Corporate Sustainability Facilitator representing a Tata company and
the Community Head for the project would also identify specific opportunities for
improvement. These might read: “The Company mentions of a regular convention of review.
However, it is not clear as to how the review findings are incorporated into Company’s
strategy.” or “The Company trains its Facilitators / project leaders for leadership. However, it is
not clear how the training imparted is actually benefiting them.” or “The Company declares
‘underprivileged women’ as its key community. However, there is no evidence on the process
of identification of this community.” or “The Company states that the key community has
benefited in terms of self-reliance. However, it is not clear as to how the key community has
actually built self-reliance.”
Scores
Assurance Item
Process Outcomes Total
1 Leadership is by example 23 16 39
1 Managing Risks 28 25 53
Each project leader is responsible for understanding the specific concerns of each community,
defining the key beneficiaries, and placing a clear focus on how a company’s core capabilities
would contribute to a specific need. They would specify tangible measures both in terms of
what will actually be done and in terms of the human achievement. The project leader will also
determine the human excellence indicators and clearly identify which aspects have clear
sustainability payoffs for the community engaged.
Why do Tata companies care so much? Because that is the Tata way – and because their
employees are trusted (and expected) to approach their tasks and their volunteering with
society in mind. They do not do something because it pays. They do it because it matters – to
their business model, to their own development as leaders, and to the legacy their company
wants to leave behind. This selflessness may catch cynics by surprise, but it is part and parcel of
forging a strong connection between sustainability and competitiveness. Much like, “Think not
what society can do for your company, but what your company can do for society.” There has
been recent recognition by Harvard Business School professors Clayton Christensen and
Michael Porter, among others, that such an orientation can trigger disruptive innovations. At
Tata, the Index has made the disruption itself a way of doing business, to ensure that Tatas’
commitment to sustainable business will expand in the future and across its increasingly global
base of operations.
How do you develop Leaders for Corporate Sustainability? At Tata, this is a two-fold approach.
On the one hand, the Index encourages a proactive application of the Tata Business Excellence
model in ways that promote positive social and environmental contributions. Annual scoring
ensures constant process improvement. The assessment triggers company-wide workouts that
help strategic leaders work with their internal teams to jointly identify major risks,
opportunities and innovations that can meet both sustainability and business excellence
objectives. Using this collective understanding, the leaders then formulate a 3-5 year corporate
sustainability strategy for their organization. This gives their company a more sustainable edge
(competitively, socially and environmentally). It also gradually widens their own leadership
bandwidth to make a larger difference in their community and competitive context by setting
new standards of what businesses can achieve.
On the other hand, the Corporate Sustainability Leadership Profile guides their personality
footprints to trigger a virtuous cycle of enhanced goodwill and reputation. First, the leaders
assume responsibility for themselves and their leadership team, and work personally to tighten
convergence between the trained corporate sustainability facilitators and their unit’s business
excellence goals. They lead for sustainability by example – through involvement in volunteering
initiatives and through regular integration of sustainability issues in business meetings. Their
performance on corporate sustainability is reviewed periodically (including their ability to
promote and recognize such leadership among their subordinates). There is even a flowchart
showing how any organizations can systematically implement leadership for sustainability.
At Tata, the Leadership Protocol translates the group mission statement into executable
leadership for sustainability: “The Tata name is a unique asset representing leadership with
trust. Leveraging this asset to enhance Group synergy and becoming globally competitive is the
route to sustained growth and long-term success.” (Group Mission Statement, 2007). Projects
like the Nano or adult literacy in 40 hours do not happen by chance. But they can happen by
design.
Figure 3: The Tata Corporate Sustainability Leadership Profile: Process of Deployment
Tata companies have unleashed a virtuous cycle of evolution and execution of sustainability
strategies. The Index assesses and guides sustainability-enhancing processes; the Leadership
Profile articulates the steps for strengthening leadership capabilities. By embedding a society-
minded logic to value creation, Tata have given back many-fold to society. Their learning in turn
has strengthened their corporate identity, and encouraged bold steps in rethinking
transportation, information technology, or steel manufacturing.
Could your company follow their lead and make a difference? The Tata’s approach is simple,
but it is not easy. You can position your firm for a lasting competitive advantage by deliberately
embedding sustainability assessments in both operations and leadership. Taking a
comprehensive approach helps you indentify and configure the various capabilities needed to
create value sustainably – in systems, people and programs. And if your company is not
changing fast enough, you can. Become the change you wish to see, and lead others by
example:
Innovation with Retail Customers such as Distributors, Retailers, End Customer, Fabricator,
Smaller OE’s has been done by:
Sustainable Development:
As global initiatives in promoting responsible business gather momentum, Tata Steel stands as
a beacon of social and environmental commitment, not only in India but across the world as
well.
Today, Tata Steel is well positioned to take forward its 100-year ethos with renewed vigour,
having formally integrated its economic, environmental and social performance reporting. Tata
Steel’s commitment to sustainable development and growth is amply reflected in its Vision. The
Company has identified and is proactively engaged in addressing economic sustainability,
environmental concern and the social needs of its stakeholders.
The core issue, however, identified by Tata Steel, which underpins all these is Value Balancing;
such that long-term partnerships are established with its stakeholders.
Sustainability has also been integrated into the business systems at Tata Steel. Inputs from
stakeholders through formal and informal processes allow the Company to focus on their
concerns, to identify issues and delineate strategic objectives.
1934 - Tata Steel responded to earthquake in its Bihar province with relief supplies
1958 - 225 acre Jubilee park created for the citizens of Jamshedpur
1995- Tata Business Excellence Model - makes sustainable growth a priority and has
I included this in its Key Enterprises Process
1995- Tata Council for Community Initiatives – provides the superstructure for CSR
eff efforts across the Group
2003- Tata Index for Sustainable Development - a CSR measure adopted across the Tata
G Group
Many landmarks in Labour Welfare:
1915 - Free Medical Aid to all employees and dependent family members
2004 - Inserted clause against Sexual Harassment in the Works Standing Order
Tata Steel will volunteer its resources, to the extent that it can reasonably afford, to sustain and
improve a healthy and prosperous environment and to improve the quality of life of the people
of the areas in which it operates.”
Areas of Impact
o Environment
o Employee Relations
o Stimulating Economic Growth
o Civic Amenities & Community Service
o Population Management
o Sports and Adventure
o Health for All
o Relief During Natural Calamities
o Education / Arts and Culture
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