Excellence entails surpassing or outstanding achievement.
Leadership and organizational excellence are inextricably linked. Leadership is doing the right things. Organizational
excellence is doing the right things right. In an excellent organization, the many functional parts work together to
achieve a central mission while continuing to grow and evolve in order to meet new challenges. Excellent
organizations have a vision, streamlined business practices, integrated information sharing, great resilience,
motivated workforces, a distinct and positive culture and high levels of performance.
Following are the types of excellence that exist (or may co-exist) in organizations:
Competetive organizational excellence
Rejuvenatory organizational excellence
Institutional organizational excellence
Creative organizational excellence
Missionary organizational excellence
Versatile organizational excellence
INSTITUTIONALISED ORGANIZATIONAL EXCELLENCE
Institutional excellence is a sustainable competitive advantage that enables the business to survive against
competition over a long period of time. It involves sustaining high achievement on importatnt performance
parameters even when there is little pressure , by way of competition , for excellence.
Competitive pressures in the domains of many Third World societies are relatively weak. Government dominance
often threatens to politicise and bureaucratise the larger organizations, especially those dependent on the
government for funds or owned by it. If the organization internalises norms of excellent functioning, it may
continue to function well despite weak competitive pressures and an adverse control environment. Of course, even
for successful institution building, organizational leadership during the formative years of the organization is
needed that makes the right choices of what missions to pursue and how.
National Thermal Power Corporation of India offers of good example of how institutionalized excellence can be
achieved. NTPC was set up in the mid-seventies by the Government of India to speed up the generation of thermal
power in the country. Between 1982 and 1990, NTPC increased its power generating capacity nearly ten times, and
accounted for nearly half the increase in thermal power generation in India during 1985-90. Throughout the
eighties NTPC was profitable, and indeed its profits in 1989-90 were over 100 times its profits in 1982-83, From
1983-84 onwards , NTPC consistently earned more than 25% on sales. In comparison, most of the electricity
boards owned by various state or or provincial governments in India made loses during the eighties. In 1988-89
they lost Rs. 32 billion on sales of Rs. 128 billion while NTPC earned Rs. 33 billion on sales of Rs. 12.6 billion in that
As is evident , the key word for institutionalized organizational excellence is long term sustainability- a player for a
longer race , rather than current expediencies.
Following is a case analysis of Bajaj Auto Limited , which was the undisputed market leader of the fast growing 2wheeler and 3-wheeler industry in India:
Bajaj Auto Limited
Institutionalized Excellence- A direct result of Strategy, Structure and Culture followed in an organisation:
In the case given there is clear delegation of authority for making operation related decisions and the head of the
company only retains firm control over corporate policy making. Thus the decision making is decentralized to a
large extent. This autonomy has helped create an organisation where employees are motivated and spurred by
Bajaj Auto also gives huge importance to innovation strategy and has independently developed 3 wheelers,
motorcycles and new scooter models and various other process innovations. From being an importer to technology
they have strengthened their R&D to an extent that they are exporting technology to Indonesian and Bangladeshi
The culture of the firm is one of ethical and social responsibility. The company has contributed to rural
development in Maharashtra. This helps in increased commitment from the staff to a vision of excellence and a
concern with suatainable growth rather than short term profit.
The company culture focusses on quality which is achieved by manufacturing excellence through innovation,
automation and computerisation.
The organisation is a young one focussing on meritocracy rather than gerontocracy. The average age of the 32
highest paid executives is only 53.
Further there is a healthy balance between at the top between fresh blood and people familiar with the
organisation and its culture. The chief executive, in the organisation since 20 years has inculcated good
management practices ensuring consistent performance by Bajaj Auto.
The strategy has also had a clear strategy which is to achieve sales of a million annually in the early nineties. A
clearly defined goal gives the head clarity to define roles and jobs more clearly and drive performance.
Institutionalized Excellence- Other prerequisites
Bajaj auto has had the benefit of working in technical collaboration with Piaggio thus learning best practices from
the Italian firm.
Environmental factors such as the increase in industry average wages have also helped Bajaj Auto create a legacy of
The company has restricted its diversification only to 2 and 3 wheeler categories thus helping it focussing fully on
them and achieving rapid production capacity expansion.
The company has managed to remain financially strong and has given an excellent return to its shareholders thus
allowing it to invest in new technologies and innovations.
The company also has an extensive dealer network that allows it to enjoy healthy growth and introduce new
products to the market in a fast and efficient manner.
Institutionalised Organisational Excellence has been embedded in Tata through processes and methodologies that
enable Tata companies to continually improve operations and achieve the world-class marquee. They are known
not only for their continuous achievements in the business sector, but also for their integrity and values. The Tata
group’s brand value is ever increasing, along with its diverse market share – achieved mainly because of the wide
parameters that the group focuses on. The group has a high focus, not only on financial profits, but also has a wide
commitment to their people, and the community – the implementation of which has kept its promise of a true
triple bottom line that appeals to all parties involved in their group of companies – the employees, the
shareholders and the customers. Below are the ways in which the TATA group has achieved excellence through a
long spanning career.
Sustained high achievement over a long period of time
Founded in 1868
Has celebrated over a 140 years of successful existence, with a distinguished track record.
Exceptional achievements notched up by the company at all times, and well ahead of its time.
Pioneering initiatives in India
Established the first steel plant
Introduced labour welfare benefits long before they were enacted by law
Started the first power plant
Pioneered civil aviation
Brought insurance to the country
Started the country’s first chain of luxury hotels
Led commercial vehicle production
Pioneered software development
Manufactured the country’s first indigenous passenger car, the Indica
Provided affordable, innovative and inclusive solutions such as the Tata Nano, Tata
Swach water purifier and Shubha Griha housing
Since its inception, the Tata Group has changed its identity from a dominant domestic player, to a regional player,
to an upcoming Global company, to having it’s companies in the list of the esteemed Fortune 500.
Its operations covers many fields related to industry and allied activities concerned with know-how and its
application engineering, information technology, communications, materials, automotive, chemicals energy,
telecommunications, software, hotels, steel and consumer goods.
The statistics and figures of Tata Group speak for themselves.
Group Revenues $100.09 billion (around Rs475,721 crore). This is equal to over 3% of India’s GDP.
Shareholder base: 3.8 Million
Over 100 operating companies
International presence in over 80 countries
International revenues: $51.5 Billion
There are about 450.000 employees in the Tata group.
Tata motors and Tata Communications listed on NYSE
It exports products and services to one hundred and forty nations.
Tata Steel: Among the top ten steelmakers in the world
Tata Motors: Among the top five commercial vehicle manufacturers in the world
Tata Global Beverages: Second-largest player in tea in the world
Tata Chemicals: World’s second-largest manufacturer of soda ash
Tata Communications: One of the world's largest wholesale voice carriers
Institutionalisation of good management practices
A key factor that has helped Tata companies grow and establish themselves on the global stage as business leaders
in their respective fields is the strong business excellence movement in the group.
Tata Group has adapted a business framework from the renowned Malcom Baldridge achetype, called the Tata
Business Excellence Model (TBEM). The model falls under the Tata Quality Management Services, and is a tool used
to help different Tata companies achieve business excellence, and also include societal initiatives such as
governance, safety and the Tata Code of Conduct. The TcoC determines how employees can conduct themselves,
and helps drive ethics and values in the company, thereby adding to its organisational ethos. This defines the Tata
The core of this framework lies in a proactive attitude rather than a reactive one, in order to always stay ahead of
the competition, and focuses on running the business effectively and efficiently.
TBEM assessment covers seven core aspects of business operations vis-a-vis leadership, strategic planning,
customer focus, measurement, analysis and knowledge management, workforce focus, process management and
outcomes of financial and non-financial parameters, and business results.
The TBEM is a framework for all employees and operations to standardise practices, in order to establish the core
values of the company and bring cohesiveness across different companies in the group. This helps bring widespread
commitment of the staff to a vision of excellence, one of the key competencies to achieving institutionalised
Special focus on organisational culture and staff retention
Quality has always been one of the pillars of TATA’s way of business, which is why in 1995 the group created the
JRD quality value awards. These awards act as incentive for staff to inculcate the organisational values and ensure
that quality consciousness prevails in all the organisations that belong to the TATA group. The award recognises a
company within the Tata group, which excels in quality management and has achieved the highest levels of quality,
in turn ensuring continuous excellence and consequently leadership in the market.
The TATA Group has built itself an unshakeable brand equity over the years, mainly by having a strong presence in
the community. It thoroughly believes in giving back to the society what came from the society, practices of which
are prevalent everywhere the TATA group is. Be it the TATA trust’s work in the areas of health, education, women
and child development, and training of youth, or in their sustainable development of the community projects, their
work has helped them not only give back to the community, but also helped shape their company policies.
Organisational excellence has always been an underlying theme of the Tata Group. In its 140 years of existence, it
has emphasised themes of governance, sustainability, values and ethics, long before these concepts have come to
be formally acknowledged as integral to idealised precepts of business management. It is these aspects that make
this group an example of Institutionalised Organisational Excellence.
Pranoti W. | Puhoop Agarwal | Rekha Rane | Rohit Rohan | Sanket Kulkarni | Sidharth Uchil | Tarini Bandhu