Tata Steel, the flagship company of Tata Group, is a leading steel producer with a production capacity of 30 million tonnes per annum and a significant presence in approximately 50 countries. The company focuses on raw material integration, research and development, and strategic acquisitions to maintain competitive pricing and enhance product quality. Despite challenges such as high debt, attrition rates, and competition from substitutes, Tata Steel aims to leverage its technological advancements and global market presence for future growth.

1. Conducting an Organizational Assessment
4
Conducting an Organizational Assessment
Name: Michael Carlson
Instructor: Godwin Igein
Course: MGT416
Institution: Argosy University Online
Date: Nov 25, 2015
Tata Steel, the flagship company of Tata group, has crude steel
production capacity of 30 million tonnes per annum. It was
founded by Jamsetji Nusserwanji Tata. It is the world’s second-
most geographically diversified steel producer (Tata Steel,
n.d.). They have their presence in almost 50 countries with an
employee base of 80,000 people. As on March 31, 2015, the
group had an overall turnover of Rs 139,504 crores (India
Infoline, 2015).
They established their first steel plant in 1907 in Jamshedpur,
India. From there on they have moved on to setting up new steel
projects in Jharkhand, Odisha and Chhattisgarh.

2. Raw material integration is the strategy that sets them apart
from their competitors. The prices of the raw materials used by
them are highly volatile. The basic raw materials used by them
are iron ore and cooking coal. They have their own mines and
collieries which satisfy their raw material requirement. For
additional requirement, they enter into future contracts with
suppliers so as to ensure a continuous flow of raw material and
have a hedge against price volatility. In fact, the company is
exploring mining opportunities overseas also. The minerals that
are grabbing their eyeballs overseas are Limestone and Ferro
chrome. They want to have full control on raw material
resources so that there is no interruption with its supply. This
strategy also ensures that they are able to provide very
competitive prices for their products.
The company has also been a continuous investor in various
research and development projects to improve its quality and
provide better rates to the customers. Tata Steel’s R&D centres
are now conducting research programmes to improve the life
cycle and sustainability of its products. These include projects
to reduce energy consumption, CO2 and other emissions (Tata
Steel, n.d.).
Tata Steel had also launched a program, Kar Vijay Har Shikhar.
This program involves the use of Total Quality Management and
various statistical tools to improve their process.
The company’s strategy for global markets is to become global
benchmark in value creation and corporate citizenship in steel
industry (Tata Steel, n.d.). They have their main focus on
innovating new and distinct products for the international
markets that satisfy the needs of their customers. They have
been continuously investing in terms of time and money to
improve their manufacturing facilities and provide best quality
products at competitive prices.
The company has also been investing in a number of mergers
and acquisitions to improve their global presence. They have
acquired NatSteel and Millenium Steel thereby increasing their
presence in South-East Asia. They have also grabbed a share of

3. the European market by acquiring Corus. These acquisitions
have not only improved their overseas presence but also gave
them an access to mature market like Europe and use of new &
better technology for the production process.
In an effort to improve its global presence and competitiveness,
they are expanding their raw material integrations strategy to
overseas as well. The overseas coal mines of the Group are
located in Australia and Mozambique and the coal mines at
CDJV, Australia. The iron ore mines are located at New
Millennium Corporation, Canada and Ivory Coast (Tata Steel,
2009).
Tata Steel has also entered into a joint venture with Tata
BlueScope Steel Limited which has given them an entrance into
construction applications market.
SWOT Analysis
SWOT analysis is a technique of identifying the internal and
external factors that will have an impact on the organization.
The strength and weakness signify the internal environment and
the opportunities and weakness signify the external
environment.
STRENGHTS
· Company owned mines & collieries: The company has coal
mines in Jharia and West Bokaro and dolomite, manganese ore
mines in Jamshedpur. It also has iron ore deposits in Noamundi,
Joda and Katamati in the states of Jharkhand and Odisha (Tata
Steel, n.d.). These mines help to combat the price volatility
faced by the minerals. It also ensures steady and stable flow of
raw materials. This in turn helps in smooth flow of the
operations.
· Lowest Cost producers of Steel: Tata steel has been named as
the lowest cost producers of steel. This is primarily because of
the steady flow of raw materials for the production purpose.
Also their mines are located close to the production plant in
Jamshedpur. This leads to lower transportation costs which help

4. in improving the overall price of the finished product.
· Employee Welfare: Employees have always been at the heart
of this organization. A number of initiatives at domestic as well
as global level have been taken to ensure employee’s good
health and safety. All the basic amenities like school, hospital,
water, telephone lines, housing have been provided to
employees working in Jharia mines. All its mines are ISO-
14001-Environmental Management System Certified (Tata
Steel, 2009).
· Mergers & Acquisitions: Tata’s strategic move of buying
Corus, Anglo-Dutch steel maker in 2007 is the largest buy-out
deal overseas by an Indian company till date (India Today,
2008). This deal made them the fifth largest producer of steel.
It also helped them grab a share of the European market and use
new and efficient technologies patented by Corus. The reason
behind Corus accepting the deal of Tata steel was that they
would get an easy access to raw material reserves in India. The
other two acquisitions have been NatSteel of Singapore and
Millenium Steel of Thailand (India Today, 2008).
· State of art technology: Tata Steel’s collieries use Surpac, a
state-of-the-art mine planning software that estimates the
volume of coal in every seam. This is coupled with qualitative
detailing that focuses on output consistency. To maximise
productivity and utilisation, a voice and data equipped Global
Positioning System is used, which helps to supervise mining
activity for machine movement and engine status (Tata Steel,
2009).
WEAKNESSES
· High debt-equity ratio: Debt equity ratio implies that how
much assets of the organization are financed through loans. Tata
steel has always been on the higher side with respect to debt-
equity ratio which signifies a negative impact on the
organization in the long run. Moreover, if the government
announces a hike in the interest rates, it would further add on to
the existing debts that are outstanding.
· Attrition trend: Even though Tata steel has been meticulous

5. about employee welfare schemes that are launched from time to
time, but still it has not been able to control its attrition rate.
The company recorded an attrition rate of 3.19% in the year
2009-10 and this number further rose to 4.48% in the following
year (Tata Steel, 2012). One of the reasons for this attrition rate
can be SAIL plant in Bokaro. Many employees of Tata Steel are
being poached by SAIL and Mittal Steels.
· Lower Liquidity Levels: Major acquisitions of the company
have been financed through internal sources. This has led to
deep hole in their pockets thereby affecting the liquidity levels.
· Widespread Deficiencies: The cooking coal that is being used
as a raw material by iron and steel industry has higher ash
content which adversely affects the production of iron. Though
the company has huge iron ore deposits mines but still they face
a shortage of this raw material which again impacts the overall
productivity. Lastly, power supply cuts in India have always
impacted the production capacity of the plant.
OPPORTUNITIES
· Huge Overseas Market: The acquisition deals signed by Tata
steel has opened up avenues of huge market lying to be tapped.
Their low cost of production will be an added advantage that
would give them an edge over the competitors.
· Use of new technology: The Tata-Corus deal will help the
company to use the new technology and patents owned by Corus
group. This will further benefit them by producing in a more
cost-efficient method and also improve the overall quality of the
product.
· Shift focus on new industries: Industries like automobile,
water and irrigation enterprises, and engineering industry use
steel as a raw material. Therefore, Tata steel should focus on
these industries which would lead to rise in the demand of steel.
· Untapped Rural Market: There is a huge potential lying
untapped in the rural markets of India. The company need to do
proper marketing and make their presence felt in the rural areas
as well. Their cost effectiveness will provide them an edge
against competition.

6. THREATS
· Availability of substitutes: Automobile industry has shifted
from steel to plastics as its raw material. Another substitute of
steel that is making its place in the market is aluminium. Tata
steel has been facing huge losses because of these substitutes.
For example, PVC pipes have replaced steel pipes. The
company needs to rethink of a strategy to stay in the market.
· Government norms: The company need to adhere to the Co2
emission standards set by the European government for its
operations in Europe.
· Economic slowdown in Europe: Tata steel entered the
European market at a premium price. However the economic
slowdown has posed a threat to the company in terms of its
survival and profitability.
· Entry of competitors: Another serious threat being faced by
the company is that its rivals like Arcelor Mittal and Posco have
decided to enter the Indian markets. This may lead to reduced
market share of the company.
ORGANIZATIONAL STRUCTURE
The below table highlights the organizational structure at Tata
Steel. The structure can be classified into three
categories comprising of Upper management, Middle
Management and Lower Management.
After the acquisition of Corus Group, Tata steel thought of
having some changes in its organizational structure for the
purpose of integration of two groups. A group centre was
created for five functions that are to be performed with a
common approach across the Tata Steel group. These functions
are:
· Technology and Integration;
· Finance;
· Strategy;
· Corporate relations and Communications; and
· Global minerals. (The Hindu, 2007).
BUSINESS PROCESS

7. Tata Steel has implemented a robust research & development
process and design & automation process.
RESEARCH & DEVELOPMENT PROCESS: The company has
been investing huge sum of money in the innovation of new and
efficient process of manufacturing. They have five research
centres across the globe. The Group’s research programme
comprises programmes funded by the separate business units
and work on a number of identified thrust areas that receive
corporate funding (Tata Steel, n.d.).
DESIGN & AUTOMATION PROCESS: Globally, Tata Steel
production is controlled and monitored through highly
automated, computer-based systems. Such processes include
automatic sequencing of equipment, material detection and
tracking, strip rolling, furnaces, boilers, material coating, water
cooling and many more. The Automation Division of Tata Steel
in India is the central agency for design, development,
integration and implementation of Process Automation for the
Company’s Indian operations and is also an international
supplier of high level automation for the metal industry (Tata
Steel, n.d.).
ETICAL ISSUES
Tata Steel implemented the Tata Code of Conduct in1998. This
code of conduct is a guide to each employee on the values,
ethics and business principles expected of him in personal and
professional conduct (Tata Steel, n.d.). The company
encourages whistle blowing and the reporting of instances of
unethical behaviour to the management, while ensuring full
protection to the whistleblower in its ‘whistleblower protection
and reward policy’. (Rao, 2013). It is one of the two Indian
companies on the list of World’s Most Ethical Companies
released by the Ethisphere Institute and also one of the first
companies to implement social accountability standards (Datta,
2012).
There have been no instances of unethical behaviour in Tata
Steel. However, some important unethical behaviour concerned

8. with manufacturing firms can be:
Exploitation of labours: They may force labour to work for low
wages or work extra hours at the same wages. This is generally
prevalent in places where there is problem of unemployment.
Environmental Issues: Manufacturing concerns may compromise
on environmental laws set the government and adversely affect
the health of the residents who live nearby.
These issues could be controlled by setting up a proper system
for penalising the employees who violate the code of conduct.
Government rules and regulations should be reviewed on regular
basis to make any amendments to the existing laws in the light
of changing scenario.
REFERENCES
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http://www.tatasteelindia.com/corporate/company-profile.asp
India Infoline. (n.d.). Metals and Mining Newsletter. Retrieved
from http://www.indiainfoline.com/article/print/news-top-
industry-newsletters/metals-and-mining-newsletter-may-18-to-
22-2015-115052200496_1.html
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http://www.tatasteelindia.com/corporate/vision-and-strategy.asp
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brochure/sustain_growth.html
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09/html/100yrs_heritage_of_mining.html
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http://www.tatasteelindia.com/sustainability/2012/employee-
happiness.asp
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structure. Retrieved from http://www.thehindu.com/todays-
paper/tp-business/tata-steel-to-have-new-organisational-

9. structure/article1957986.ece
Tata Steel. (n.d.). Governance Structure. Retrieved from
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e-structure.asp
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from
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/Tata-Steel-A-robust-ethical-board.html
Tata Steel. (n.d.). Business Ethics. Retrieved from
http://www.tatasteelindia.com/corporate/ethics/business-
ethics.asp
Tata Steel. (n.d.). Research & Develpoment. Retrieved from
http://www.tatasteel.com/products-and-processes/processes-
business-services/research-and-development.asp
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http://www.tatasteel.com/products-and-processes/processes-
business-services/design-and-automation.asp
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overseas-acquisitions-by-Tata-Group/1/6221.html