Tata Sons Private Limited

Tata Sons Private Limited

Tata Sons Private Limited

Introduction

TATA group is a global enterprise comprising multiple companies that operates in more than 30 countries. Its headquarters lies in India where Jamsetetji Tata, the founder, started the first business. The mission of the group is to improve the quality of life of the communities they serve. The principle holding and promoter company for TATA companies is the Tata Sons Private Limited. The governance structure of Tata Sons and Tata Group includes a board of directors that comprise different members. One chairperson heads both the Tata Sons and Tata Group. The company has an interest in bringing positive changes to the communities by initiating and funding beneficial programs and projects. The group’s guiding philosophy enables it to remain loyal to its business and be socially responsible.

Question 1

The founder of Tata Sons was a visionary man who looked after the welfare of the communities and societies that he engaged in business. Therefore, the company follows his path and business approach by carrying out initiatives that benefit the surrounding communities. Tata Sons pioneered labor welfare initiatives by introducing the eight-hour workday and a pension plan for its employees. The firm created a working environment that focuses on providing fair, transparent, accountable, and ethical management. Tata Sons adheres to the rule of law like other responsible corporate citizens and dictates certain behaviors and rules that Tata group operating companies should follow.

The company’s leadership has been in line with the founder’s family; previous chairpersons were either descendant of the founder or related by marriage to a descendant. The evident internal change is that the current chairperson does not originate from the Parsi tribe or the Tata family. The company now gives all individuals a chance to lead business operations in the expected direction. The move indicates a shift in the company’s culture in providing equal opportunities to non-family members to run its operations. The evident external changes in the company include the introduction of the Tata code of conduct and Tata business excellence model, which aim at ensuring the diverse companies adhere to honest, responsible, and ethically-accepted behavior when conducting business.

The organization has come up with several initiatives to demonstrate adherence to its values and purpose. For example, the Tata Trust undertook the Annapoorna Centralised Kitchen project in partnership with other organizations to help school going children in over 20 schools access nutritious and tasty meals daily. The organization has engaged with the Indian community by addressing critical needs that require intervention. Sir Ratan Tata established an endowment to fund the new study of sociology at the London school of economics. Other responses include institutional building to develop domestic capabilities and producing world-class talent. The actions have proved to be fruitful as the organization has expanded its activities to other countries around the world thus reaping substantive revenue.

Question 2

Management theories address how managers and supervisors relate to their organizations in the knowledge of its goals, accomplish these objectives, and motivate employees. The classical management theory focuses on finding the best way to accomplish and manage a task. Scientific, administrative, and bureaucratic management form the three broad areas of the classical approach. Taylor focused on scientific management and insisted that supervisors should assign jobs to workers based on specialty and supervise their performance (Cole 2004, p. 66). On the other hand, Henri Fayol operated under the administrative theory and focused on developing administrative principles that could apply to both general and higher managerial levels. Lastly, Max Weber’s focus on bureaucratic management led him to promote management by standard rules, division of labor, and a hierarchical organization structure.

The concepts of business ethics and corporate social responsibility were unknown and unpracticed in the western management context. Tata Sons were socially responsible from the early period of its existence and have remained focused to present times. The organization has been at the frontline promoting business ethics and corporate social responsibility (Crane & Matten 2016). The firm pioneered the labor welfare initiatives before the law recognized it thus indicating that it holds ethical values paramount in its business activities. The organization uses a proactive approach in its social responsibility initiatives. The approach involves business practices adopted voluntarily by organizations beyond the stipulated requirements to support sustainable economic, social, and environmental development (Torugsa, O’Donohue, & Hecker 2013, p. 384). The company has built a state of the art medical center in Kolkata, India that focuses on carrying out cancer research, diagnosis, and treatment. Therefore, the organization minds the health status of the surrounding community and has taken initiative to improve their condition. Another initiative undertaken by the company is the establishment of the Tata water mission that provides pure water to the residents and aims at improving sanitation to millions of people. Proactive corporate social responsibility leads to better brand recognition, increased customer loyalty, and increased positive business reputation. The community and customers remain loyal to a brand that is socially responsible.

Question 3

Tata Sons uses an administrative organization structure to run its businesses and administer overall control. The structure is a hierarchical arrangement of the lines of authority. Each Tata company operates independently under the guidance and supervision of its board of directors. The individual companies run the daily activities independent of other enterprises (Daft 2015, p. 53). The board of directors has benefited the organization significantly. The company has established new business networks and accessed otherwise unreachable places and people. Also, the board members promote accountability by holding key managers responsible to deliver on their promises. As such, the board helps in reinforcing accountability and urgency. The members take a lead role in devising corporate strategies and ensuring the company and all departments align to the strategic goals.

Tata Sons acts as the principal investment holding company and promoter of Tata companies by controlling its management and policies. The holding company owns shares of other companies from a corporate group and does not produce any goods and services (Ficbauer & Režňáková 2014, p. 330). The approach reduces the risk for the owners and allows ownership and control of several companies. Other advantages enjoyed by Tata Sons are the quality for capital gains exemptions and asset protection from creditors. A firm that operates using a holding company cannot lose its assets and profits to a creditor. Thus, the organizational structure of Tata Sons ensures that it retains its assets hence sustain its existence.  

Question 4

A leadership style is an approach used by managers to provide direction, implement plans, and motivate people. JRD Tata used a democratic leadership style, which drives participation thus effective as it considers the input and importance of all stakeholders (Nanjundeswaraswamy & Swamy 2014, p. 27). The chairperson insisted that corporate enterprises must represent not only the interests of their owners but also that of the employees, consumers, local community, and the country. Naval Tata believed that there is no shortcut to prosperity; as such, his leadership style aimed at achieving success in a hard way. He utilized a bureaucratic leadership style to ensure that all employees adhere to the rules and procedures precisely. The chairperson insisted that discipline is paramount whether at home, school, the factory, or the farm for success. Ratan N Tata believes that business demands a lot from individuals hence used a transactional leadership style to drive laser-focus on performance. As such, leaders should contain themselves in a framework of ethics, values, fairness, and objectivity at all times. 

Conclusion

The Tata Sons Private Limited believes in supporting the community it engages with by providing social amenities. As such, the organization operates under strict business ethics as part of its vision to ensure that associated companies respect and uphold integrity in their daily activities. Proactive corporate social responsibility has enabled the company to adopt business practices that surpass the regulated requirements to actively support the social and economic growth of the surrounding communities. The organization majorly focuses on India, which is the headquarters of its business operations. The firm’s organizational structure has ensured that family members control the businesses hence effective although present managerial decisions reflect a change in the family-centered approach in top management. Past and present chairpersons have ensured that the company maintain its culture and attain its vision throughout its existence.  

Reference List

Cole, GA 2004, Management theory and practice. Cengage Learning EMEA.

Crane, A & Matten, D 2016, Business ethics: Managing corporate citizenship and sustainability in the age of globalization. Oxford University Press.

Daft, RL 2015, Organization theory and design. Cengage Learning.

Ficbauer, D & Režňáková, M 2014, ‘Holding company and its performance.’ Acta Universitatis Agriculturae et Silviculturae Mendelianae Brunensis, 62(2), pp.329-337.

Nanjundeswaraswamy, TS & Swamy, DR 2014, ‘Leadership styles.’ Advances in management, 7(2), p.57.

Torugsa, NA, O’Donohue, W, & Hecker, R 2013, ‘Proactive CSR: An empirical analysis of the role of its economic, social and environmental dimensions on the association between capabilities and performance.’ Journal of Business Ethics, 115(2), pp.383-402.

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