Study on Organizational Structure and Leadership Style of TATA Motors

NITIE Mumbai

Study on Or anizational Structure and Leadership tyle of TATA Motors

Team Members Suhas Jamble 102| Balu Sukate 103| Sumit Guha 1 4 Sunit Mhasade 105| Sumeet Suman 106| Sunny Tonk 107

PGDIE 40, NITIE Mumba i

CONTENTS INTRODUCTION

3

PRODUCTS AND SERVICES

5

ARTICLE REVIEWS

7

7

ORGANISATIONAL STRUCTURE LITERATURE

1. How organizational cli ate and structure affect knowledge manageme nt- The social interaction perspectiv . (Chen & Huang, 2007)

7

2. The relationship betw en product customization and organizational st ucture (Vickery, CorneliaDroge, & Ger ain, 1999)

8

3. Knowledge sharing in i nter unit cooperative episodes: The impact of rganizational structure dimensions (Willen & Buelens, 2009)

9

4. An holistic approach t understanding the changing nature of organiza ional structure (Doherty, Champion,

Leitao Wang, 2, 2010)

10

5. Theories of organizati nal structure and innovation adoption: the role of environmental change (Damanpour & Gopalakrishnan, 1998)

11 13

REVIEW OF LEADERSHIP STYLE LITERATURE

1. How Much Much Time Time Should CEOs Devote to Customers? (Quelch, 2008)

13

2. Organization develop ent and leadership: R.B. Reid and the dynamics of success- BRITISH RAILWAYS (Barlow, 1996)

14

3. Leadership Types and tyles - Overview of Skills (Hick) 4. A dynamic theory of leadership Development (Mostovicz, Kakabadse, dynamic theory of lea ership developement, Vol. 30 No. 6, 2009)

15 Kakabadse, A 17

5. Transformational vers s servant leadership: a difference in leader focus (Stone, Russell, & Patterson, (2004,Vol. 2 5 No. 4))

18

Current organizational Structur of TATA Motors

20

COMPARISON & CONCLUSION

21

TATA Motors with Organisation Structure

21

TATA Motors with Leadersh ip Style

22

ANNEXURE

24

1.

Correspondence with Interviewee

24

2.

Interview Questionnaire

26

LOG OF VISIT

29

BIBLIOGRAPHY

30

2


INTRODUCTION Tata Motors Ltd has two b siness units – the Passenger Car Busines s Unit (PCBU) and Commercial Vehicles Busine s Unit (CVBU). The vision and mission of both the business units are given below

Vision

“Best in the manner in which we operate, best in product we deliver & best in our value systems & ethics.”

Mission

“To become world class auto otive engineering & product development c entre and enable Tata Motors to become a wo ld class automotive company.”

Company Overview

Tata Motors is India’s larges t automobile company. It is the leader by far in commercial vehicles in each segment, a d among the top three in passenger vehicles with winning products in the compact, midsize car and utility vehicle segments. T e company is the world’s fourth largest truck manufacturer and the second largest bus manufacturer with consolidated revenues of Rs. 92,519 crores (USD 20 billion) in i n 2009-10. TATA Motors is one of the ol est automobile companies established in 1945 & delivered its first model on roads of India in 1954. Now, it is present all over the coun try. The company's manufacturing unit in India i spread across Jamshedpur (Jharkhand), P ne (Maharashtra), Lucknow (Uttar Pradesh), Pa tnagar (Uttarakhand) and Dharwad (Karnataka). The company is establishing a new plant at Sanand (Gujarat). Over 5.9 million Tata vehi cles are running on Indian roads. TATA Motors, the first company from India's engineering sector to be listed in the New York Stock Exchange in Septemb r 2004. It has also emerged as an intern tional automobile company having operations i the UK, South Korea, Thailand & Spain. In year 2008, it acquires Jag uar Land Rover from Ford Motors & in the same year TATA launched Nano, people’s car. Fiat Group & Tata Motors announce establishment of Joint Venture in India in 2007. Tat Motors acquires 21% stake in Hispano Ca rocera SA, Spanish bus manufacturing Company. In 2004, it acquired the Daewoo Co mmercial Vehicles Company, South Korea's second largest truck maker.

3


The company’s manufacturing base is spread across Jamshedpur, P ne, Lucknow and Pantnagar (Uttarakhand).

lso the company has R&D centres in

une, Jamshedpur,

Lucknow, Dharwad in India,

in South Korea, Spain & the UK. TATA Mo ors developed the

first indigenously Light Commercial Vehicle, India's first Sports Utility Vehicle & in 1998, the Tata Indica, India's first fully indigenous passenger car. Within two ye rs of launch, Tata Indica became India's largest selling car in its segment. In 2005, Tata Mo tors created a new segment by launching the Tata Ace, India's first indigenously developed mini-truck. The company is establishing two new plants at Dharwad (Karnataka) and Sa and (Gujarat). The company’s dealership, sales, services and spare parts network co prises over 3500 communication points.

The People

Tata Motors is having emplo ee base of 24,165. The company helps its e ployees to realize their potential through inno ative HR practices. The company’s goal i to empower and provide employees with dynamic career paths in congruence with corpo ate objectives. Allround potential development and performance improvement is ensured y regular in-house and external training. The company has won several awards reco nizing its training programmes.

4


PRODUCTS AND SERVI CES Passenger Cars:

The range comprises

ata Indica (compact car), Tata Indigo (s dan), Tata Indigo

Marina (station-wagon) and Tata Nano (small car). The company also distributes and markets Fiat branded c rs in India.

Utility Vehicles:

A range comprising Tata Aria (Crossover); Tata Safari (SUV), Tata enon XT (Lifestyle Pick-up), and Tata Sumo Grande MK II, Tata Sumo range and Tat a Venture (People Carriers).

Commercial Vehicles for goo s transportation •

Small Commercial Vehicles: Tata Ace, India’s first indigenous mini- ruck.

•

Light Commercial Vehicles: Pick-ups and trucks ranging from 2T G W to 7.5T GVW.

Commercial Vehicles for pass enger transportation •

Tata and Tata Marcopolo range of light, medium and heavy b ses from 2T GVW onwards.

•

Multi-purpose vehicles – Tata Magic, Tata Magic Iris, Tata Winger and Tata Venture – for urban and rural transportation.

Subsidiaries Companies

These are various sub idiaries of Tata Motors. •

Jaguar Land Rover

•

Tata Marcopolo Motors

•

Tata Daewoo

•

Hispan Carrocera

•

Tata Motors (Thailand)

•

Telcon

•

Tata Motors European Technical Centre

•

Tata Technologies

•

TAL Manufacturing Solutions

•

HV Tra smission and HV Axles

•

Tata Autocomp

•

TML Di tribution Co.

•

Tata Motor Finance

5


Product Profile

Passenger Cars

Indica

Uti tillity Vehicle

Commercial passenger Vehicles

Trucks

Small Commercial

Sumo

Bus

trucks (Ace)

Indigo

Safari

Nano

Xenon

Light Commercial

Winger

trucks (TL4X4)

Intermediate Commercial

Magic

trucks (Turbo Truck)

Fiat

Prima truck

Construck

6

Medium & Heavy Commercial trucks


ARTICLE REVIEWS ORGANISATIONAL STRUCTURE LITERATURE

1. How organizational climate and structure affect knowledge man agement- The social interaction per spective. (Chen & Huang, 2007)

Objective:The article emphasises on the study to examine the effects of organizational climate and structure on knowledge management from the social interaction perspective. The regression analysis is use to test the hypotheses in a sample of 146 cases.

Key Variables: Organisational climate,

organisational

structure,

social

interaction,

knowledge

management.

Findings:Firstly, the author has ad opted the process-oriented view to investi ate the mediating effect of social interaction on the relationship between organiza ional climate and knowledge management. Secondly, he examines how social interaction affects the relationship

between

organizational

structure

and

knowledge

management.

Organizational climate plays an essential role in shaping employe s’ behaviours and influencing their percepti n of knowledge management. If the organization possesses a strong innovative and cooperative climate, employees would receive

clear signal that it

is acceptable or desirable for them to build up interaction networks to share and gather knowledge. Conversely, i the innovative and cooperative climate is relatively weak or inexistent, employees would perceive a lower need to interact with olleagues. Besides organizational climate, the author also emphasises on organizational structure which is likely to affect the social interaction among organizational membe s. As a result, the author expects that an innovative and cooperative climate would provide a vital atmosphere for strengthening social interaction among organizational members. The author also states th importance of mediating effect which giv s the relationships between independent variables of organizational climate and orga izational structure and dependent variable f knowledge management and states two ypothesis that the social interaction medi tes the effect of organizational clima e on knowledge management and Social interaction mediates the effect of organiza ional structure on knowledge management. These hypotheses have been explained regression method.

7

y the author with


Conclusion:1. First, the smaller s ample size of this study raised the non-res onse bias concern. We have done th t-statistics and w2 test to verify that the n n-response bias is not a significant issue. Also, the sample size in our study is ba rely satisfactory to generate the m aningful results as the regression mo els include 8–12 independent vari bles. Accordingly, the smaller sample siz

of the survey is

noted as a potential limitation in this study. 2. The study focuses only on two organizational context including climate and

structure. There

re other organizational constructs that

arrant discussion.

Future research may explore how these different const ucts affect intraorganizational social interaction and knowledge management. 3. The findings sugg st that innovative and cooperative climate is positively related

to social interacti n. When the organizational structure is less formalized, more decentralized and integrated then the social interaction is more favourable. Also the social interaction is positively related to knowledge management. 4. These empirical e idences support the process-oriented vie

and indicate that

social interaction plays the mediating role between organizational climate, organizational structure, and knowledge management.

2. The relationship bet een product customization and organizati onal structure (Vickery, CorneliaDr ge, & Germain, 1999)

Objective:This research examines the relationship between the extent of use of a product customization strategy

nd organizational structure, since structure is a key to

managers’ implementation of strategy.

Key Variables: Product customisation, d centralisation, span of control Findings:Four aspects of organiz tional ‘structure’ are considered. They

re formal control

(encompassing the measurement of competitive, internal, and supplier performance) and three key dimensions of organizational design: decentralization, layers, and spans of control. A contingency approach is taken by simultaneously exami ing the main and moderating effects of en ironmental uncertainty and firm size. LISREL results show that customization associates with more formal control, fewer layers, and narrower spans of control. Subgroup analysis revealed that these main effects are, for the most part, not moderated by size or environmental uncertainty.

8


The main effects of size on structure were consistent with previo s research: larger manufacturers are mor

formalized (in terms of performance controls) and de-

centralized, and utilize m re layers and wider spans of control. Manu acturers operating in more dynamic environ ents are more decentralized, but have m re rigorous formal control.

Conclusion:Managers should thus understand that, for the most part, they need not concern themselves with size an d environmental uncertainty when selecting an appropriate organizational structure t ‘match’ the desired level of product custo c usto ization

3. Knowledge sharing in inter unit cooperative episodes: Th e impact of organizational stru ture dimensions (Willen & Buelens, 2009) Objective:The objective of article is how the classic organizational structure di ensions should be altered to be more adapted to organizational knowledge sharing. The behaviour of the relationship between coordination, centralization, formalization, and specialization, with the concept of knowledge sharing has been studied.

Key Variables:Knowledge sharing, coordination, formalisation, specialization Findings:Studying effective inter-unit knowledge sharing in organizations requires insight into how organizational structure influences and shapes the cooperative

pisodes in which

knowledge sharing takes place. To obtain this insight, we revisit four of the most important

classic

organizational

structure

dimensions,

namely

coordination,

centralization, formalizati n, and specialization; and assess their i pact on inter-unit knowledge sharing. These classic organizational structure dimension are underpinning the differentiation–integr tion balance, which has been the major f ocus in the classic organization theory literat re. The impact of coordination on knowled e sharing depends on the kind of coordinati n mechanisms used, and this is closely related to the other structure dimensions (centralization, formalization and specialization). Formalization indicates th extent to which the rights and duties of t e members of the organization are determined and the extent to which these are writ ten down in rules, procedures and instructi ns. Decentralised, i.e. horizontal-coordin tion consisting of teams, mutual adjustm nt, networking, and integration roles (less formal and decentralized) allows flexible coordination during task execution an can deal with ad hoc communication and information.

9


Informal coordination (i formal and decentralized) was not topical in the classic organization structure literature but received thorough attentio

in the network

literature, which also stressed the relationship with knowledge sharing. Informal coordination, i.e. any form of personal contact between people and units in the organization that is not intended or imposed by management.

Conclusion:Empirical data was coll cted by means of a questionnaire in two companies. Our findings indicated that expected relationships, such as the negative effect of centralization or the

ositive effect of lower formalization, were not found.

Interdependency and knowledge complexity, caused by specialization, had an important interacting effect on the relationship between coordination and kn wledge sharing. A comparison between the two companies revealed that the organization-specific context in which the coordination is applied influences the potential of this coordination for knowledge sharing. By bringing new issues such as knowledge management into organization structure th ory, this theory might regain some of its los value.

4. An holistic approac to understanding the changing natur of organizational stru ture (Doherty, Champion, & Leitao Wa g, 2, 2010) Objective:This article discusses abo t one of the most debatable & important t pic i.e. importance of IT on organizational structure & mostly about Enterprise Ent erprise Resource Planning (ERP). It is a well defined technology with low interpretive flexibility.

Key Variables:Standardisation, formalis tion, Entrepreneur Resource planning Findings:It mostly influences the locus of decision making, standardization & formalization of working practices and procedures. But it does not consider its impact on span of control, the degree of horizontal i tegration, or the number of hierarchical la ers. It is difficult to get an overall view of the impact of IT on organizational structure. ERP is typically acquired i the form of packaged software, with integ ated modules that support all major business functions across an organization, such as production, distribution, sales, financ & HR management. It encourages organizations to streamline & standardize their business processes across the organization business units.

10

within individual


Strategy is also having s ignificant impact on organization’s struct re. Results of the quantitative analyses suggest that the configuration of an organizati n is influenced by ERP benefits & strategi

orientation. Author has also done quantitative study to

recognize impact of ERP. Large-scale & successful ERP system is deployed in an organization with a Prospector orientation, & then there are a most chances that organization will ecome flatter, the decision-making will be less centralized, level of horizontal integratio will increase & its working practices will become more standardized. st andardized. Results of many previous studies say that, an ERP implementation is an extremely complex & problematic undertaking. ERP has dominant role in reshaping corporate structure.

Conclusion:1. This study gives two valid interpretations that ERP systems will only deliver benefits in circumstances in which the host organization’s structure is already well aligned, wit

the structural models & management teams will only be

prepared to mak any significant changes to their organiza ions’ structure, to better align it with ERP. 2. This article does

ot give any particular answer to this deb table topic, but it

mostly says that, i is successful ERP adoption that is driving st uctural change.

5. Theories of organizational structure and innovation adopt on: the role of environmental cha ge (Damanpour & Gopalakrishnan, 19 8) Objective:This article discuss about various theories of Organizational structure & innovation adaption & their frame ork within which they are applied. Mostly these theories focuses on only one dim nsion i.e. type, radical-ness, or stage-of in ovation at a time. But in reality these dime sions are overlaps on each other & for the same reason these theories produce inconsis ent results.

Key Variables:Innovation adaptation, environmental change, Findings:In this article, authors al o discussed about innovations, its adoption, rate & speed to adopt it by organizations

its sources like imitative, acquisitive & inc bative.

There are three structural theories of innovation: 1. Dual core theor : It distinguishes between administrati ve and technical innovations

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2. The theory of inn vation radicalness: It discusses about two a pects i.e. variation (routine) & reorie tation. 3. The ambidextrous theory: It discusses about the pre-adoption activities that lead to a decision to adopt & the activities that facilitate implementation and continued use of an innovation Article also tells that orga nizations is open systems seek a state of eq ilibrium with their environments and its di ensions are extent of stability and extent of turbulence or predictability. So, the two sets of values for each dimension are stable vs. unstable; predictable vs. Unpredi table. Four environmental sets of conditions: stable and predictable (EC1), stable and unpredictable (EC2), unstable and pre ictable (EC3), and unstable and unpredictable (EC4). A way to make a framework for ab ve conditions is to bring together elements of environmental change, organizatio al structure and innovation adoption.

Conclusion:1. The article gives complex but precise theories by identifying the environmental conditions under which

certain structural characteristics facilitate or hinder

organizational innovation. The framework identifies dimensions of innovation adoption in each environmental condition. This paper helps to resolve some of the discrepancies that existed among the three prominent theories of organizational in ovation. 2. This article is having som limitations like it is complex in construct. It mostly focuses on external environment & not on other variables that impact st ucture–innovation adoption relationships, such as organizational technology, size and o nership.

12


REVIEW OF LEADERSHI STYLE LITERATURE 1. How Much Time Should CEOs Devote to Customers? (Quelch, 2 08) Objective:Customers are the source of all cash flow. Organic growth depe ds on developing relationships with new and existing customers. And future growth p ospects are baked into stock market valuations of companies. The current economic do nturn, companies need marketing skills mor than ever. But while every corporate mission statement pays lip service to respecting ustomer needs, actual customer expertise is typically a mile wide and an inch deep.

Key Variables:Customer relationships, Consumer behavior, General leadership, cust mer satisfaction

Findings:"THE CUSTOMER IS GOD AND THE MARKET DECIDES EVERYTHING" is very well known quote it becomes even

ore pivotal in situations of economic crisi . But as seen very

few of the CEOs of FORTUNE-500 companies have come up the ranks through marketing and sales. Every corpora e mission statement pays lip service to re specting customer needs; actual customer expertise is typically a mile wide and an inch deep. To be customer-oriented, executives must get out and meet customers on their home turf—in their homes, on job sites, in their offices. A good CEO knows how t balance time spent on the outside versus the inside. However they should consider following three things •

CEO should spearhead the identification of three or four custo er health metrics that are leading indicators of sales or profit performance. These metrics should not be off-the-shelf standbys such as customer satisfaction. They must get out and meet customers on their h me turf—in their homes, on job sites, in their offices.

•

CEOs must ensure an adequate pipeline of new product and market opportunities. This requires the in estment in uncovering customer insights discussed above, either through business leaders regularly going into the field

nd through more

formal customer rese rch studies. •

CEO has to develop

arketing talent throughout the company. his cannot merely

mean appointing a high-profile rainmaker as chief marketing officer. It requires the long-term infusion of customer centricity and marketing

trategy capability

throughout the orga ization. Over time, this should mean a hi her percentage of general managers co ing up through the marketing ranks.

Conclusion:Every CEO should spend t least 10 percent of his or her time taking care of these three challenges i.e. human t ouch, customer relationship and . Runni g around visiting customers is simply not enough. 13


2. Organization development and leadership: R.B. Reid and the d namics of success- BRITISH RAIL AYS (Barlow, 1996) Objective:To extract various qualities of leadership style from Reid’s tenure in ritish railways and comparison of it with lead rship trends in TATA MOTORS.

Key Variables:Leadership capacity, delegation of authority, commitment Findings:Reid carried through argu bly one of the most fundamental and potentially far-reaching processes of change and organizational development that British Rail (BR) has experienced in the past 40 years. Growth in BR’s productivity and financial performance was among th fastest in Europe, and BR ended that decades one of the most productive and certainly he most profitable rail networks in Western Europe.BR in before Reid However, the de elopment of road and air competition and growth in private car ownership had brought about a far more precipitous loss of BR’s business than could be redressed merely by cl osing down routes where traffic could be handled more economically and effectively by road. In a nutshell, Beeching had sought to i entify and mobilize the railways’ distinctiv characteristics to greatest competitive adva tage. Although his plans remained largely in abeyance, they neverthele s remained as an agenda for regenerative change. His (Reid) wide-ranging experience, Astute, intelligent, politically aware as well as professionally experienced, Reid knew how to get things done within the railways’ orga ization. He also knew what needed to be done. Within two years, Reid had delivered roductivity improvements and cost reductions on a scale that his predecessors had been unable to achieve As a professional, he knew the railways and their management intima ely. He knew what needed to be done, and how to get it done: he possessed systemic l adership capacity He also knew how to oper te the levers of power. He induced change built on success , rather than to avoid failure. H communicated a

clear vision and was d cisive and determined in implementing it. He set clear, achievable goals, and ex ected them to be achieved . He delegate

authority, giving

clear mandates to others along with discretion to achieve results in ways which were most effective. As a resul , he created and won the commitment o new coalitions of

professional managers and galvanized support within BR as a whole for the transformation he brought about.

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This view was endorsed ecently by a director of one of the sect r businesses, now disbanded, who summed p Reid’s achievement succinctly: Reid reco nised the need for change. He created a sens e of business purpose. He dissolved the Re ions and replaced

them with the sectors . T e sector businesses were full of people w o understood the industry and the business they were in. Reid got them all pulling in t he same direction . There was a real feeling of achievement and success.

Conclusion:•

Wide- ranging experience, astute and intelligence and political awareness, within two years, Reid had elivered productivity improvements and c st reductions on a scale that his predece sors had been Unable to achieve.

•

A clear vision & keen o accomplish it & a clear set of goals helped him to develop an organization structured around identified business sectors and, simultaneously, running down and eventually eliminating BR’s structure base

on geographical

regions.

3. Leadership Types and Styles - Overview of Skills (Hick) Objective:To identify when and whe e these leadership qualities to be used and ow these is relevant to TATA MOTORS. Key Variables:-

Autocratic, Delegative /Free Rein, Democratic Findings:-

Leadership style is crucial o success. We find leadership all around us . Each of us will fill the role ourselves at vario us times in our lives. Leadership can be fo nd in the world of business, sports, politics, religion and as close as home. Leaders m st respond to the rapidly changing world an meet the challenges it demands. There ar different types of leaders and you will most likely encounter many over the course of ti e. Understanding different leadership styles and their impact will help you become a more effective leader. In 1939 famed psychologist Kurt Lewin identified classic styles of lead rship. These three styles are well established though more specific types have been identified since. Leaders should not be confused wi h managers.

15


Autocratic:

a) What needs to be acco plished, as well as, how and when, is the s le responsibility of the leader. b) Allow for quick decisions when time is crucial. c) This is a less creative a proach. A "Do what you are told" Obedien and strict form of control. d) Use when a group or m mber doesn't have knowledge of the practice or procedure. e) The autocratic style works best when there is no need for input. In ut will not change the decision or outcom . Democratic:

a) The leader acts as a g ide. Accepts input and seeks ideas and s ggestions through discussion. b) Even though the leader may have the final say the team t eam contributes to the process. c) Democratic style can be problematic when the final decision is hampered by a wide range of opinion. d) People are more com itted when involved in the process of making decisions. They have a personal stake i the outcome. e) This style is mutually be neficial and helps improve people skills. Delegative/Free Delegative/Fr ee Rein:

a) Minimal in direction. b) Allow decision-making y the team. c) Works well when the team or a member is more knowledgeable ab ut the subject. d) This style works best wi th highly motivated and well trained people.

Leaders are always mana ers but the reverse is not necessarily the case. Good leaders will use the style or a com ination of styles that best fits the situation. Leadership style is crucial to success. We find leadership all around us. Each of us will fill the role ourselves at various times in our lives. Leadership can be found in the world f business, sports, politics, religion and as close as home. Leaders must respond to the rapidly changing world and meet the challenges it demands. There are different types of leaders and you will most likely encounter

any over the course of time. t ime.

Conclusion:Leaders should not be con used with managers. Leaders are always managers but the reverse is not necessarily t he case. Good leaders will use the style or a combination of styles that best fits the sit ation.

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4. A dynamic theory of lea dership Development (Mostovicz, Kakaba se, & Kakabadse, A dynamic theory of leadership developement, Vol. 30 No. 6, 2009)

Objective:-

The paper examines selected leadership literature through the lens of theory buildingblocks. It identifies th

role of the ideal goal in leadership and its importance in

developing the psychol gical aspect of leadership. Key Variables:-

Leadership, Leadership development Findings:-

The paper posits that leadership is a developmental process, which is based on the type of choice a leader makes. While choice implies that two good options are always available from which o select, one should make choices in ac ordance with the leader’s worldview, lo king for affiliation (i.e. the Theta worldvi w), or looking for achievement (i.e. the Lambda worldview). Consequently, leaders need to recognise that the choices they make for organisational activities have to fit their own worldview. Pursuing t e fit between one’s worldview and plan ned organisational activities ensures that l aders continuously improve their ethical behaviour. The paper concludes with the pre entation of a dynamic theory of leadership, which is based on the assumption that one can only strive toward truly ethical leadership with the knowledge that this goal is beyond human capacity. Leadership has examined three different phases within the leadership timeline: the past, the present, and t he future. Leadership is about making choi es. The choice is a binary action that divides options into two sets, the desired and t e undesired ones, according to a higher principle or value. Conclusion:-

The paper conceptualises that leadership quality develops b

making choices

according to the following two world views: 1.

Theta model- ocially oriented

2.

Lambda model- Personally oriented

Thus keeping with ei her of the two world view a leader keeps o making choices. These choices create memory based on which leader take decisi ns for future. Thus leadership that was historically considered to be either as purel in born quality or as purely a learne d behaviour is now known to be a D namic leadership development process. This means that an Ideal leader does not exists but a leader always strives to achieve ideal ethical behaviour continuously.

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This paper puts the views on dynamic theory of leadership , which is based on the assumption that one can only strive toward truly ethical le adership with the knowledge that this oal is beyond human capacity.

5. Transformational ve sus servant leadership: a difference in lea er focus (Stone, Russell, & Patterson, (2004,Vol. 25 No. 4))

Objective:-

This article examines tr nsformational leadership and servant leadership to determine what similarities and di ferences exist between the two leadership oncepts. Key Variables:-

Leadership, Transformational leadership, Influence Findings:-

The transformational leader’s focus is directed toward the organiza ion, and his or her behaviour builds follo er commitment toward organizational ob jectives, while the servant leader’s focus is on the followers, and the achievemen of organizational objectives is a subordinate outcome. The extent to which the t he leade is able to shift the primary focus of leadership from the organization to the follower i the distinguishing factor in classifying lea ers as either transformational or servant leaders. This article also looks at the next s age of developmental issues in servant leadership, such as the challenges facing empirical investigation and measurement, and the changes that are occurring in current thi king about the servant leadership approach. The primary premise of the article is that transformational leaders end to focus more on organizational objectives while servant leaders focus more on the people who are their followers. Transfo mational leaders transform the personal va lues of followers to support the vision and goals of the organization by fostering an environment where relationships can be formed and by establishing a climate of trust i which visions can be shared. Idealized influence is the charismatic element o

transformational

leadership in which le ders become role models who are admir d, respected, and emulated by followers. Transformational leaders inspire and

otivate others by

“providing meaning a d challenge to their followers’ work” T e leader inspires followers to see the a tractive future state, while communicatin expectations and demonstrating a com itment to goals and a shared vision. Idealized influence and inspirational motivation are usually combined to form charismatic-inspirational leadership. Similarly, the Transformational leaders play a vital ole in Intellectual stimulation of employe s, Individualized consideration,

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While servant leadership is an increasingly popular concept, throug out much of its history the concept has been systematically undefined and lacking i empirical support. Conclusion:-

Both transformational leaders and servant leaders are visionaries, g enerate high levels of trust, serve as role m odels, show consideration for others, deleg te responsibilities, empower followers, teach, communicate, listen, and influence f llowers. Certainly, transformational leadership and servant leadership are not an ithetical theories. Rather, they are com lementary ideologies because they both describe excellent forms of leadership.

onetheless, there are significant points

concepts. Most impo tantly, transformational leaders tend t

f variation in the focus more on

organizational objectiv s while servant leaders focus more on the people who are their followers.

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Current organization organizationa al Structure of TATA Motors

20


COMPARISON & CONC USION TATA Motors with Orga isation Structure As per article relating organizational structure & climate with know ledge management, organizational climate p lays an important role on employees’ behaviou r. The same concept held true in case of Tata motors. They are having frequent interactions

ith their employees

& workers, formally & informally which helps employees to feel

ore bounded with

organization. Also, it he lps in gathering & sharing the knowledge. As T ata motors is having relatively flat structure, it helps them in easy interaction between vari us level in structure which improves knowle ge & ideas sharing within organization. One of the article talks bout product customization & organization. It lso talks about span of control & levels in structure. As Tata motors is also operates with less levels of organizational structure, it is having narrow span of control.

rticle also relates

environmental uncertainty with product customization. But for Tata motors, how environmental uncertai ty effects product customization is not so clear . In decentralization, the main Tata group h s command over Tata motors, but all strategic actions & plans are taken by board of direct ors of Tata motors itself. Other paper defines va rious impacts of organizational structure dime sions on knowledge sharing. One of the di mensions is formalization & it defines specific role & duties for employees, their resp nsibilities. In Tata motors, they follow Tata code of conduct & authority matrix which helps them to identify different responsibilities and decision

making powers of an individual both functionally and financially. Other dimension is coordination. In Tata motors, they are having newsletters and house magazines published monthly for each division and are circulated though out the company. Also regular emails/correspondence from Chairman, MD and CFO are circulated on regular basis. The hig her level management is always accessible to the lower level. This helps them to gather, share & spread the knowledge & ide s very easily from level to level. In today’s world of co puterization all the activities are need to be computed and all the data is to be m intained precisely to take the major management decision. Based on this data all the activities of the all departments like production, manufacturing, purch se, finance, operations, etc can be interlinked. Thus the article gives the importanc

of Information Technology on organiza ional structure &

mostly about Enterp ise Resource Planning (ERP). During the i itial years in 90s, TATA Motors was not having any efficient software that will moni or all the activities of the organization.

owadays, the TATA Motors is using various software like for

ease of all these activi ties like ERP & SAP also various design softw are like CATIA, UG, AUTO CAD, etc.

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This enables TATA

otors to be more efficient in delivery, payments, order

execution, as well a in maintaining in-house inventory as w ll as ware house inventory manageme t systems. The company has become one of the best in the supply chain manage ent system due to incorporation of these IT solutions. All the departments of TATA Motors are interconnected wit

intra networking

system, as well as all the divisions are connected with internetw rking system. This enables the easy and fast flow of information among the emplo ees, management including the board of directors, vendors, suppliers. The company is publishing various articles, new letters about the wellbeing of the empl yees, promotions, deaths, etc periodically. This keeps all the employees to be connected to the organization all the ti me and gives them the latest updates and happening in and around organization. In one paper, it m stly focuses on innovations and how it helps to improve organizational struct re and its stability. In Tata motors, the

also focuses on

innovations, as likely said in introduction company has introduced various innovative models in market and they became a boom. For example, Tata Nano, it is a dream of its chairman Mr. Rata Tata, to make a car for middle class famili s in Rs. 1 lakh. and they launch it in market successfully and it creates a blast in a tomobile industry worldwide. Also, ot er models like Tata Ace, these are

irstly India's first

indigenously develop d mini-truck & Tata Magic is one of its own kinds. This type of innovations creates some kind of spirit to work for organization with full responsibility and enthusiasm, sense of belongingness towards organization. All the officers as well as e ployees of Tata motors started feeling ‘Nano’ as their own project. Due this rea on, Mr. Ratan Tata was able to deliver h is dream in reality within stipulated ti e period. Research and Development d partment of Tata motors is working continuously on designing and developing new innovative product range. Various joint entures of the company also working for he same goal like Jaguar, Land Rover, Fiat, Xenon, etc. These practices help compa y to strengthen its organizational structure.

TATA Motors with Lead rship Style

The group chairman Ratan Tata is responsible for transforming Tata Motors Ltd. into a Group strategy thi k-tank and a promoter of new ventures in high technology businesses. His vision of making a truly international company b ought in a foreign CEO. As per one of the paper there is no such ideal leader rather one evolves as an ideal leader with ex erience. Initially his decisions were critici ed but now he is assumed to be one

f the best in the world. He is currently part of 203 board

members in 20 differe nt organizations across 23 different industri s.

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Earlier Tata Motors w s seen as a sleepy company. Its products w re dependable but few said they’d buy t eir cars for personal use. Its trucks were al o bought for price first. Reliability was a lesser consideration. But since then the company has had a slew of successful launches nches – the Indica Vista, the Manza, its ran ge of world trucks (and the Nano). It has also gone and bought a Spanish bus maker, Hispano Carrocera. During this time Tata Motors has also realised it needs to globalise aggressively. The man leading the char e is Carl-Peter Foster who was in charge

f General Motors’

European operations nd he is trying to internationalize the com any in true sense. Every plan in the co pany is first evaluated under Enterprise Risk Management team. The parent gro p doesn’t have much control over the TATA motor and it’s the CEO of the company who is the boss. He draws a hefty salary o over 34 lakh plus bonus and incentives per month and is on a contract period of t ree years. He is a true leader with a cle r vision of bringing TATA motors on intern tional grounds. He pays a lot of focus on R&D. He can be said said as a leader leader first while the group chairman can be said to be serv nt first. Both this styles are complementary to each other. Before Mr Forster joined this company, reported its first annual loss in seven years in the year ended M arch 2009, since then he has been doing a fairly good job continue to increase sales while simultaneously simultaneously cutting costs. He doesn’t spend too much time with the e d customers but addresses the whole company quarterly.

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ANNEXURE 1. Correspondence with Interviewee

Communication from group me ber to interviewee through e-mail

Reply from interviewee to grou member through e-mail. (The interview date w as rescheduled by the official to 25/8/2010 25/8/2010 over p one)

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We conducted the second interview telephonically with Mr Rakesh Kapoor , Deputy Manager (Product Development – Electric als) Pune on 29 th August 2010 at 1530 hrs.

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2. Interview Questionnaire

1. What are the organiz tion’s goals and Mission? Vision "Best in the manner in which we operate, best in the products we eliver, and best in our value system and thics.“

Mission “To become a world cl ass automotive engineering and product de elopment centre, and enable Tata Moto rs to become a world class automotive com any.”

2. How many divisions oes TATA Motors have? Are the Divisions o f the organization based on geographica l situation or based on products differentia tion? Or is it a mix of both? TATA MOTORS has a

ixed organizational structure. There are tw main divisions

based on product typ viz Commercial vehicle division and Passen er cars division. Both these divisions have been subdivided as per geographical loc tion into north south east and west z ne.

3. What are the opport nities to get promoted over the years? Wh t is the career progression program policy deployed in TATA Motors? There is a very great s cope of growth along with the company. On an average a normal middle level e ployee is promoted every 3-5 years. An employee with exceptional record an good performance is promoted on an average of two years.

4. How much support is made available to individuals for professio al development such as – professional courses, seminars and trainings, higher ed cation? Tata does provide res arch opportunities. It encourages research ased projects. It has tie ups with vario s universities. Scholarship of 50% up to 100

is provided by

the company for high r education. They also have in house training programs.

5. Who decides the wor distribution? And How? The work is distribute in based on strategic activities or operatio al/routine assignments. The stra egic level activities are taken up by top management. The operational activities re distributed to middle and lower level. This becomes the base of their yearly performance appraisal.

6. Are new ideas from e mployees welcomed? If an idea is found go d enough then is it implemented? implemented? Yes new ideas are wel comed from the employees and they are re arded suitably. They have a suggestion boxes to invite new ideas. Few ideas have also been

26


implemented. (When asked very trivial example was given, like ch nge in shape of envelope).

7. How much control of parent company is there on TATA Motors? TATA Motors is more r less independent. All the strategic decisio s are taken by Board of directors of ATA motors.

8. What is the reporting procedure and flow?

9. How often managem nt interacts with employees? The management interact with the employees on a regular basis. he chairman addresses the whole company thrice a year, MD visits each divisio div isio quarterly. Accordingly the lower management have meeting with employees on day to day basis.

10. How often different departments comes together and at what le el? Every month there is

ManCom meeting. Apart from that there a e various cultural

activities throughout the year.

11. Is the interaction am ng employees (at different posts) only limi ed to formal levels or interaction i there on personal level also? The functional group

eets thrice a year for a cultural event with amilies. The

welfare association conducts various activities throughout the year which involves employee and their family including different sport activities.

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12. Is there any differenc in working styles of an Indian CEO and a

on Indian CEO?

No, there is no much ifference in their working.

13. How the span of cont rol of managers at TATA Motors? At corporate level the span of control varies from 1:5 to 1:7. While at the middle and lower level managem nt it varies as 1:10. This indicates that the o rganisational structure is somewhe e between flat and hierarchical structure.

14. To what extend decisi on making power given to a department?

ow much does

the top level interfer in working within a department? Each employee is bou d by TATA Code of conduct and authority

atrix which clearly

identifies different responsibilities and decision making powers of an individual both functionally and finan ially.

15. In general, in TATA M otors, whether the managers act as a ment or to their colleagues/juniors? Yes, they have a ment oring program which enables each employe to empower themselves in the fun tional areas.

16. How the organisation communicates effectively with the employ ees? How long does it take for a mes sage to reach from top of the organization o bottom and vice versa? They have newsletter and house magazines published monthly for each division and are circulated though out the company. Also regular emails/correspondence from Chairman, MD and CF are circulated on regular basis. The higher level management is always accessible to the lower level.

17. What practices do yo implement during conflicts? Have you eve r had to make a decision without kno ledge of all the needed data? In case of conflicts the action plan is chaired by top management.

18. How do you approac complex problems? Like In case of NANO’ Singur Plant, what factors prompte d to cancel the project there in spite of hug e investment already incurred? They have an Enterprise risk management (ERM) team that studie and evaluates different aspects of a y occurrence on operational, functional and strategic background.

19. Is TATA Motors a pro uct oriented organization or people orient d organization? TATA Motors is more f a product oriented organization.

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LOG OF VISIT Whom visited 1.

Mr. Rajesh Aidoor,

GM (Internal Audit & ERM) TATA Motors Limited th

4 Floor, One Forbes, 1 Dr VB Gandhi Marg, Fort Mumbai – 400 001

2.

akesh Kapoor eputy Manager (Product Development – El ctricals) &D Department, Pune ata Motors une - 411033

Who Visited 1.

Sumit Guha

Roll no: 104, PGDIE 40 Batch of 2012 National Institute of Industrial Engineer (NITIE) Mumbai 2.

Sunit Mhasade

Roll no: 105, PGDIE 40 Batch of 2012 National Institute of Industrial Engineer (NITIE) Mumbai

When Visited First Interview

Date : Time : Venue : -

25th August, 2010 1700 Hrs TATA Motors Limited (Corporate Office) 4th Floor, One Forbes, 1 Dr VB Gandhi Marg, Fort Mumbai – 400 001

Date : Time : Nature : -

29th August, 2010 1530 Hrs Telephonic

Second Interview

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much time should CEO devote to customers? Retrieved August 26,

2010, from HBS Working Knowl dge: http://hbswk.hbs.edu/item/6037.ht http://hbswk.hbs.edu/item/6037.html ml Stone, A. G., Russell, R. F., & Pat erson, K. ((2004,Vol. 25 No. 4)). Transformation al versus servant leadership: a difference in leader focus. The Leadership & Organization Develop ent Journal , 349361. Vickery, S., CorneliaDroge, & Ge rmain, R. (1999). The Relationship between prod uct custmization and organizational structure. o rnal of Operation Management , 377-391. Willen, A., & Buelens, M. (2009) . Knowledge sharing in inter unit cooperative e isodes: The impact of organizational structure dime nsions. International Journal of Information Ma agement , 151-160.

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Study on Organizational Structure and Leadership Style of TATA Motors

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