Assignment Sample on 7BUS2039 Strategic Leadership & HR Management 

Introduction

Organisations that operate in a highly competitive environment ensure that their business strategy aligns with their human resource strategy. In other words, the human resources of an organisation are the key aspects of the company that helps in achieving its goals and objectives. In this regard, the following study would evaluate Tata Steel and its business strategy that has helped them to maintain a competitive advantage in the global market. The study also aims to critically evaluate the company’s approach in terms of human resource management and how this aligns with their existing business strategy. As a result, the human resource strategy of the organisation would also be analysed in terms of measuring its sustainability in the long run.

Company Background

Tata Steel is one of the most iconic companies that started its operations in India in 1907. The organisation has been operating for the last 114 years and has expanded its market operations extensively. Tata Steel is one of the business entities within the TATA Group and has its own set of subsidiaries, which include Tata Steel Europe, Tata Steel BSL and a few more (Tata Steel, 2019). As the name suggests the organisation is a global manufacturer of iron and steel.

Figure 1: Tata Steel equity performance over the last 5 years

(Source: Money control, 2021)

At present, the company has 32,364 employees with a net asset worth of $33 billion. The organisation earned revenue of $24 billion and continues to grow in the global market (Money control, 2021).

Business strategy

Organisations business strategy focuses upon four main strategic objectives that are to receive industry leadership in terms of steel manufacturing, generate profitability from cyclicality of steel, achieve leadership in terms of CSR also maintain a position in the global market as a cost leader (Tata Steel, 2021).

Figure 2: Strategic objectives of the company

(Source: Tata Steel, 2021)

To achieve the strategic objectives of the company, the organisation heavily relies upon its human resources, which reflect the importance of human resource management in the company. Not only that, but the organisation also aimed to be a cost leader in the global market by ensuring they have a closely-knit logistics network (Tata Steel, 2021). Another aspect that has always been a part of the organisation’s success is its ability to utilise acquisition strategies for its market expansion process. Some of the major companies that the organisation has acquired in order to expand globally are NatSteel, Corus, Millennium Steel and a few others. The organisation also utilises joint venture strategies to enter foreign markets (Tata Steel, 2021).

Considering the company’s expansion in future, the organisation has also planned to expand their business operations within India by developing a steel manufacturing plant that has a capacity of 6 million tonnes per annum. Projects also include a major 10 million tonne P/A capacity plant in Vietnam (Times of India, 2021). Similar expansion projects are also underway in various places of India. The successful business strategies adopted by the organisation has helped the company to expand its presence in over 50 countries with manufacturing operations present in 26 Nations which includes countries like India, South Africa, UAE, Netherlands, France, Canada and many more (Web Archive, 2021).

Competitive advantage position of Tata Steel

Tata Steel, India’s largest steel manufacturer is placed in the top 10 among its market. Therefore, the corporation manufactured 26.5 million tonnes of raw materials (Adamkasi, 2018). In India, the manufacturing organisation operated in an autocratic way until the 1990s, before they faced competitiveness. In this respect, there are several different aspects through which Tata Steel has attained the competitive advantage, which is reflected below.

Design and manufacturing approach

Tata Steel, like other companies, has to make accurate predictions in order to remain afloat. They knew at some point that merely manufacturing would not suffice. They sought to go for a tighter and more profitable production strategy that used the least amount of natural resources and production schedule. Dr. J.J. Irani, the company’s former managing director, realised the advantages of incorporating a quality management in the manufacturing process, which has undoubtedly helped the organisation to flourish in the marketplace (Özcan et al. 2018).

Customer centred planning

The competitive rivalry was starting to heat up, and customers had to be kept happy. “If we don’t take care of our clients, someone else will,” said the CMD of the organisation (Adamkasi, 2018). Higher-quality merchandise was required to provide better service for the customers. Greater qualified people were required to make superior steel, and leveraging these qualified personnel will indeed necessitate a more efficient and productive communication network among the business’s many departments. To accomplish all this, a more effective method needs to be integrated to be efficient with all the services and outcomes.

Figure 3: Performance of Tata Steel

(Source: FinMedium, 2021)

Customer friendly products

The corporation seems to divert their pathway for manufacturing. It promptly assessed its situation and began developing short-term tactics that were in line with their protracted objectives. Furthermore, the organisation has understood the requirement of customer satisfaction along with winning over their hearts effectively (Vinayak and Khan, 2017). This has been done through product mix that was tailored to the requirements of the customers. In respect to this, Tata Steel immediately examined the supplier business, acquired information on demand and distribution, and devised a manufacturing plan. Apart from this, they shifted their focus in setting a benchmark for creating value for shareholders and stakeholders across the organisation.

Effective personnel management

Change may not always be effortless; hence, Tata Steel’s hand-selected individuals have the ability to really drive transformation within the organisation. Moreover, professionals were introduced to the team and during the course of the day; the ultimate findings were exact and efficient. The cost of production dropped by a remarkable 57% (Adamkasi, 2018). Steel production has become even more affordable. The production cost was reduced by 15%. The cost of fuel has dropped by a startling 80%. All of these elements were both cheaper and more effectively made, which the market desired. Employee satisfaction rises during such situations as well. The workplace has become a safer place to live and work along with this the overall productivity of the corporation improved by 95% (Adamkasi, 2018).

Critical evaluation of the extent to which the company’s approach to managing human resources is linked or aligned to its business strategy

The business world is moving at a much greater pace, in this relation, the HR needs to be aligned with the organisational business strategy. Business strategy of a company needs to be incorporated with the human resource. Hence, gap in business decisions will directly impact the workforce resulting in misinterpretation and miscommunication. In this relation, Tata Steel has found to be implementing several policies for their workers as the organisation has been awarded as “Best Place to Work in the Core Sector” during the survey of Business Today (Tata Steel, 2019). As per them, the human resources play the primary role and in this context, it is essential to look after their needs and requirements along with job satisfaction. Apart from that, the organisation has found to be providing paternity leave, extended maternity leaves along with taking initiatives including diversity, friendly infrastructure along with specific focusing on gender equality and making the women participate in the leadership as well. Furthermore, they have to focus on accessing the employees’ nutritious food, and in this context, they have a specific management who looks after the improvement and process. Furthermore, they celebrate based on organisational growth or personal success as well (Tata Steel, 2019).

A concise employee oriented approach can be notified from the perspective of Tata Steel with their human resource management strategy. It can be notified through identifying the establishment of high standards by Tata Steel for ensuring health and safety at the workplace. Quality standards are eventually established by the organisation in this case by considering proactive surveillance of the office setting arrangements. The installation of an air pollution control system is also playing a leading role in this context along with the mobile application namely mobi-safe (Tata Steel, 2021). Through this mobile app, potential employees can report about any unsafe condition in the workplace. It eventually allows potential employees for online detection of hazardous gases as well as visual displays of the shop floor and others.

Apart from that, a bi annual holistic health checkup arrangement is also done by Tata Steel. Different first aid centres are also opened throughout the organisational plants with a well-equipped feature (Tata Steel, 2021). Experienced doctors and paramedics are eventually hired by the organisation as an integral part of ensuring employee health and well-being. The mentioned features highlight adequate attention from the organisational HRM department towards employee health and safety and their well-being.

Critical analysis to justify strategic sustainability

In terms of considering a critical perspective for anticipating the long-term vision of the strategic sustainability, the porter’s generic strategy framework has been undertaken.

The theoretical understanding highlights that the relative position of an organisation within the industry can be determined by comparing their profitability to the relational industrial average (Islami et al. 2020). Different types of competitive advantage aspects can be signified as per this theory, which includes cost leadership, differentiation, and focus.

Figure 4: Porter’s generic strategy

(Source: Firoz Suleman et al. 2019)

From the perspective of Tata Steel, the company has been noticed to consider the aim of emerging as a cost leader across the global market. With regards to this concern, the cost leadership strategy can be signified for Tata Steel. In this case, the company has been looking forward to reduce their operational expenditure to some extent as an integral part of supporting their financial stability and feasibility in the market (Firoz Suleman et al. 2019). It highlights a long-term approach to ensure prolific business growth with adequate financial support obtained through cost leadership aspects.

Moreover, the resource-based view can also be highlighted in this context. The theoretical understanding highlights the determination of strategic resources that can be exploited by an organisation for achieving sustainable competitive advantage. The concept of this theory highlights different types of assets including tangible and intangible assets (Alexy et al. 2018). From the perspective of Tata Steel, the organisational business strategy has heavily relied upon the prospects of effective brand recognition that can be also reflected upon their market performance. The tangible assets, on the other hand, reflect potential products and services offered by them, capital infrastructure, financial support and employee base, and others.

Figure 5: Resource based view

(Source: Alexy et al. 2018)

The customer-friendly products are eventually acting in favour of increasing the organisational service efficiency with the improvement of financial position. These highlight respective intangible assets of the company. For evidence, it can be stated that Tata Steel experienced increasing growth of their brand value by efficiently mitigating consumer demands and market requirements. During the previous year, the brand value of Tata Steel experienced a 16% hike, which amounted to $1.3 billion growth (Money Control, 2021). It eventually reflects a long-term vision from the organisational perspective that underpins the strategic sustainability for future growth.

The mentioned aspects and real business evidence of Tata Steel completely underpins the organisational desire of emerging as the most valued company over the market. Human resource management approach of the company eventually highlights the consideration of an employee centric approach that can serve beneficially to signify long-term growth based on tangible assets. These tangible assets are eventually responsible for driving foremost attention towards intangible assets earned by the organisation.

Conclusion

The findings from the above study have helped to identify the business strategy of Tata Steel, which has allowed the organisation to maintain a competitive position in the global market. The study has critically evaluated various aspects of business strategy utilised by the company in order to maintain a competitive edge in the market. The study has also helped in identifying the human resource strategy adopted by the organisation, which plays a major role in determining how effective they are in achieving goals and objectives. The sustainability of these human resource strategies has also been evaluated with the help of theoretical underpinnings helping to understand and justify reasons why Tata Steel has adopted them.

References

Adamkasi, 2018. Competitive Advantage of TATA Steels [Online] Available at: <https://competitiveadvantageanalysis.com/competitive-advantage-of-tata-steels/> [Accessed on 19 December 2021]

Alexy, O., West, J., Klapper, H. and Reitzig, M., 2018. Surrendering control to gain advantage: Reconciling openness and the resource‐based view of the firm. Strategic Management Journal, 39(6), pp.1704-1727.

FinMedium, 2021. TATA Steel Fundamental Analysis and Future Outlook [Online] Available at: <https://finmedium.com/2020/08/tata-steel-fundamental-analysis-and-future-outlook/> [Accessed on 19 December 2021]

Firoz Suleman, M., Rashidirad, M. and Firoz Suleman, S., 2019. The applicability of Porter’s generic strategies in pure online firms: A case study approach. Strategic Change, 28(3), pp.167-176.

Islami, X., Mustafa, N. and Latkovikj, M.T., 2020. Linking Porter’s generic strategies to firm performance. Future Business Journal, 6(1), pp.1-15.

Money Control, 2021. India’s Most Valuable Brands 2020: Tata Steel is the most valued among metals and mining companies [Online]. Available at: <https://www.moneycontrol.com/news/business/companies/indias-most-valuable-brands-2020-tata-steel-is-the-most-valued-among-metals-mining-companies-5336611.html> [Accessed 18 December 2021]

Money control, 2021. TATA STEEL [Online]. Available at: <https://www.moneycontrol.com/india/stockpricequote/steel-large/tatasteel/TIS> [Accessed on 23 December 2021].

Özcan, G.B., Mondragon, A.E.C. and Harindranath, G., 2018. Strategic entry and operational integration of emerging market firms: The case of Cemex, Beko and Tata Steel in the UK. Journal of Business Research, 93, pp.242-254.

Tata Steel, 2019. Human Resources: Putting employee welfare at the very heart of our growth strategy [Online] Available at: <https://www.tatasteel.com/corporate/our-organisation/hr/> [Accessed on 19 December 2021]

Tata Steel, 2019. Integrated Report & Annual Accounts 2018-19. Money control, 2021. TATA STEEL [Online]. Available at: <https://www.tatasteel.com/investors/integrated-report-2018-19/index.html> [Accessed on 23 December 2021].

Tata Steel, 2021. Human Resources [Online]. Available at: <https://www.tatasteel.com/corporate/our-organisation/hr/> [Accessed 18 December 2021]

Tata Steel, 2021. STRATEGY Roadmap to future [Online]. Available at: <https://www.tatasteel.com/investors/integrated-report-2018-19/strategy.html> [Accessed on 23 December 2021].

Times of India, 2021. Tata Group to set up $5 billion steel factory in Vietnam [Online]. Available at: <http://timesofindia.indiatimes.com/business/india-business/Tata-Group-to-set-up-5-billion-steel-factory-in-Vietnam/articleshow/15059766.cms> [Accessed on 23 December 2021].

Vinayak, P.C. and Khan, B.M., 2017. Employer branding: Sustainable competitive advantage for organisations. TRANS Asian Journal of Marketing & Management Research (TAJMMR), 6(4), pp.27-34.

Web Archive, 2021. TATA STEEL [Online]. Available at: <https://web.archive.org/web/20130816023612/http://www.tatasteel.com/global-network/international-operations.asp?Continent=Australia&ContId=cont1#australia> [Accessed on 23 December 2021].