Organisational Structure

Pyramid Structure with decreasing number of managers at each level.

Organisational Chain of Command (Executive)

Organizational Chain of Command (Unionised)

Management by Objectives• Specific goals and objectives are established at each level of

organisation– Goals and objectives of each section derived from

organisational goals and objectives– Policy Cascading (From MD’s policy to Manager’s Policy – My

superior’s means is my Policy)• Managers and their subordinates together determine the

subordinates’ goals– KRA formulation before the start of FY – KRA decided on the basis of KPIs and KPMs

• Managers and their subordinates periodically review the subordinates’ progresstowards meeting goals– Half-Yearly review by Managers with feedback to subordinate.– Year end appraisal by team of Managers with 360° feedback to

the subordinate.

Empowerment

• SGA circles– Circles consisting of 6 employees– Circles facilitated by a manager– Focus on Kaizens to improve processes– Rewards on Kaizens.– 100 % employee involvement

• System of instant rewards (Sabash) of Rs. 250/200.

Environment (Specific)

Suppliers• Volatile raw material market

Government• Applicability of various industrial regulations•Environmental regulations

Environment (General)

Environmental forces• Increasing environmental activism•New tougher regulations

Economic forces• Rapidly growing GDP•Focus on infrastructure building

Resource Dependence

• Suppliers– Mostly owned raw material supplies– Only dependent on Foreign Coal supplies for 50% of

its requirement– Highly systematized procurement channels.

• Customers– Introduction of latest technology and processes (Six-

Sigma, Daily Management) to reduce defects– Closely coordinating with customers to assess their

requirements and compliance

Managing Symbiotic Resource Interdependencies

Informal Formal

Managing Competitive Resource Interdependencies

Informal Formal

Values• Trusteeship

“The wealth generated by Jamsetji Tata and his son….The whole of that wealth is held in trust for the people and exclusively for their benefit. The cycle is thus complete. What came from the people has gone back to the people many times over.”

• Integrity“Every employee of a Tata Company shall deal on behalf of the company with professionalism, honesty, integrity as well as high moral and ethical standards.”

• Respect for Individual“Employees of a Tata company shall be treated with dignity. Employees policy and practices shall be administered in a manner that would ensure that in all matters equal opportunity is provided to those eligible and the decisions are merit based.”

• Credibility“A Tata company shall be committed in all its actions to benefit the economic development of the countries in which it operates and shall not engage in any activity that would adversely affect such objective”

• Excellence“A Tata Company shall be committed to supply goods and services of the highest quality standards. The company seeks to scale the heights of excellence in all that it does.”

Ethics• Tata group company following Tata Code of Conduct• The Management of Business Ethics is effectively

instituted today in Tata Steel through its four pillars concept. – Leadership– System and Processes– Training and awareness– Measurement

• All employees required to sign the acceptance of TCOC.

• Any deviation results in severe penalties (commonly termination of service which is otherwise very uncommon)

Role Orientation

Collective – The new recruits are trained in groups with common training courses.

Individual – Each recruit is assigned a mentor. Training requirements of individuals are identified and a program schedule is developed.

Formal – Initial training is in the from of formal classroom courses and guided visits.

Informal – After initial induction the recruit is assigned to shop floor to learn on the job.

Sequential – The new recruits are gradually exposed to the system.

Random – Based on the performance, training needs are identified.

Serial – Existing senior members act as mentors.

Disjunctive – Due to nature of industry disjunctive processes are not promoted.

Divesture – A small divesture exists on the basis of cadre difference though it is not recognised.

Investiture – Recruits receive positive social support from the existing members.

Organisational RitesType of Rite Rite Purpose of Rite

Rite of passage Induction and comprehensive one year training

Learn and internalize norms, values and systems.

Rite of integration Community social gatherings, officers’ club partiesInvitation to all official gatherings and functions

Build common norms and values, feeling of belongingness

Rite of enhancement Annual bonuses Motivate commitment to norms, values and performance

Common Property RightsManager’s Rights Workforce Rights

•Good Salaries•Performance based annual bonuses•Stock options for senior management•Control over organisational resources at all levels•Freedom of decision making

•Long term employment•Freedom to form Unions•Gratuity and retirement benefits•Lucrative Employee separation schemes•Participation in decision making•Suggestion management

Organisational Lifecycle

1907Organisational

BirthOrganisational

GrowthOrganisational

DeclineOrganisational

Death

1994

Tata steel is

presently in growth

phase

The growth curve

Birth – Strategies for Competing in the Resource Environment

TISCO

Greiner’s Model of Organisational Growth

• Stage 1 – Growth through creativity– Started as TISCO in 1907, incorporated by Sir Dorabji

Tata– J N Tata visited US to gain insights into Steel Making– Recruited Managers and Engineers from all over the

world to erect the plant– Found suitable site at Sakchi in iron and coal rich

chotanagpur belt– Introduced many firsts in Indian Industry like 8 hour

working day, joint consultation etc.

Greiner’s Model of Organisational Growth

• Stage 2 – Growth through direction– Guided by J.R.D. Tata for most of the later half of 20th

century– Leadership of the likes of Russi H. Modi, and J. J. Irani– Grew to 3 MT by 1995– B. Muthuraman initiates expansion through

Greenfield and Brownfield projects– Ratan Tata leads the acquisition of Corus to leapfrog

Tata Steel to 6th largest steel producer in the world

Greiner’s Model of Organisational Growth

• Stage 3 – Growth through delegation– Teams scavenging for raw material resources all

over the world by the way of acquisitions and JVs– Green field and Brownfield projects continuing to

expand India operations