Tata Steel: A Century of Corporate Social Responsibility

FRAMING KEY QUESTION Will Tata Steel be able to be profitable, and social responsible? What can Tata Steel do to keep improving their business?

FLIPPING AND SKIMMING 7 pages Graphics, statistics data and financial statements Background of the market, Tata steel mantras, and their ethics as business.

BEGINNING OF CASE A tradition of compassion The Legacy in Action City of Jamshed Extended Extended Family

ENDING CASE Financial Compassion Enlighten self interest What now?

LABELING General environment Only with ISO 14001 Environment Management Systems Industry Product restrains set by government Global level of manufactured steel were above demand Competition Intensified global competition SAIL Company Strengths Largest private steel maker in the country Loyal workers Leadership in labour relations Experience Pioneered employment policies Weaknesses Shareholders without dividends Macro environment Business not attractive to investors High investments low returns
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Tata Steel: A Century of Corporate Social Responsibility

SYNTHESIZING OPTION/ HYPOTHESIS During the years Will Tata Steel be Tata Steel able to be focused on social profitable, and responsibility, social thats why they responsible? employees are loyal to them and understand that the company must be profitable to continue over the years. What can Tata Steel do to keep improving their business? They can doing more ventures to off from services start joint hand some QUESTION DECISION CRITERIA Most companies dont care about workers wellbeing, so they have a not so cooperative labour relationship while Tata Steel have a reciprocal relations with their workers By doing more joint ventures they can keep the level of services provided to their workers PROS If they succeed in implementing these two visions, the company will maintain the support of their workers and also could have dividends for their shareholders CONS If the company doesnt succeed to merge these two visions they could lose the support of their workers of they could keep being unattractive to investors and have no dividends

The can expand to another markets, and create new line of products.

By doing joint ventures the business ethic of the company can get lost by falling being social responsible.

If they expand They can keep and keep expanding and innovating and creating maintain their shareholders quality police interest. they can attract investors CONCLUDING OVERALL RECOMMENDATION Maintain social benefits for workers Keep innovating Expand in the market, maintain its low cost production Keep taking care of their workers

RISK

IMPLEMENTATION

Joint Ventures Merges

Falling to couple the two visions been profitable and social responsible

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Tata Steel: A Century of Corporate Social Responsibility

CURRENT SITUATION 1. Which is the current strategy that the company is pursuing? They are trying to be profitable and social responsible 2. What is the current situation as a result of the strategy? They have reduced the family size, have done joint ventures to keep providing services to workers, are still trying to be profitable

CORPORATE GOVERNANCE Jamsetji Tata (founder) B. Muthuraman( CEO ) Ratan Tata (member of the office of the chambermaid)

EXTERNAL ENVIRONMENT SOCIETAL OVERALL Technological Frontal running technologies Sociocultural People loyal to the company because of its social responsibility, and values from the company are appreciated by the Indian people. Economic Global competition Political/Legal Government restrictions

PORTERS FIVE FORCES Barging power of Buyers (moderate) This is a company that offers products of quality and because of their reputation and reliability people are willing to pay, in India, but international everything is about low price. Barging power of suppliers (high)

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Tata Steel: A Century of Corporate Social Responsibility

Tata Steel reputation precedes them so they are able to bring the price down by half from suppliers Threats of new entrants (moderate) Because of the government policies is hard for new companies to enter to these market Treat of substitutes (high) Government companies and international companies Rivalry (high) It exist significant global competition.

INTERNAL ENVIRONMENT Company Culture They have the idea that by being social responsible will help workers to be loyal and at the same time to commit with their work, now they are implementing a profitable structure so shareholders can have dividends Company structure The company counts with several acquisitions and joint ventures. ANALYSIS AND MATRIXES IFE ANALISYS
KEY INTERNAL FACTORS WEIGHT RATING WEIGHTED SCORE 0.6

Internal Strengths
Highly diversified 0.10 4

Experience Employee strength Low cost production No dividends High social spending Difficulty to create shareholder value TOTAL

0.20 0.15 0.10 0.20 0.15 0.10 100

4 4 3 1 2 2

0.8 0.6 0.30 0.20 0.30 0.20 3

Internal Weaknesses

EFE MATRIX
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Tata Steel: A Century of Corporate Social Responsibility

KEY EXTERNAL FACTORS WEIGHT RATING WEIGHTED SCORE

OPPORTUNITIES Expanding through acquisitions and joint ventures Exposure to new market New Products 0.20 4 0.8

0.10 0.20 THREATS

2 4

0.2 0.8

Taxes Production restrains

0.20 0.10

3 3

0.60 0.30

Globalized Economy

0.20

0.60

TOTAL

100

3.30

This is a strong company that should hold their business model

TOWS
STRENGTHS Highly diversified Experience Employee strength Low cost production WEAKNESSES No dividends High social spending create

Difficulty to shareholder value

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Tata Steel: A Century of Corporate Social Responsibility

OPPORTUNITIES

SO STRATEGIES

WO STRATEGIES

Acquisitions and joint ventures

Exposure to new market New Products

They can use their experience They should expand to new to expand to another cities markets so they can attract and become one of the largest shareholders. steel company They can have joint ventures They should use the low cost to reduce social expenses, production to create new and gain dividends products
ST STRATEGIES Using their low cost production they can try to enter in a globalized economy

THREATS Taxes Production restrains Globalized Economy

WT STRATEGIES They can try to reduce their high expenses so they can enter in a more efficient way to a globalized economy

SPACE MATRIX
INTERNAL STRATEGIC POSITION Financial +6 best;+1worst (3)ROA (2)Cash flow (4)Risk (3)Ease of exit Avg:3 Avg:-3.25 EXTERNAL STRATEGIC POSITION Environmental -1best;-6 worst (-2)Technology (-4)Competitive pressure (-3)Demand variability (-4) Barriers to entry

Y-AXIS

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Tata Steel: A Century of Corporate Social Responsibility

Competitive Advantage -1 best; -6 worst (-3)Market Share (-2)Product quality

Industry Strength +6 best; +1 worst (4)Growth Potential (5)Resource Utilization (4)Financial Stability (3) Profit potential Avg: 4

X-AXIS

(-3)Customer loyalty (-2)Technological Knowhow

Avg:-2.5

Y-axis: 3+ (-3.25) =-0.27 X-axis: -2.5+4= 1.5 Strategies: A) Reduce social expenses through joint venture and expand to other markets to create shareholder value.

B) They should use the experience of managers and business to become its core competition 1.5 -0.27 C) They should continue to fabricate in volume so they can maintain low cost I will chose alternative A.

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