NITIE MumbaiStudy on Organizational Structure and Leadership Style of TATA Motors Team Members Suhas Jamble 102| Balu Sukate 103| Sumit Guha 104 Sunit Mhasade 105| Sumeet Suman 106| Sunny Tonk 107 PGDIE 40, NITIE Mumbai CONTENTS INTRODUCTION PRODUCTS AND SERVICES ARTICLE REVIEWS ORGANISATIONAL STRUCTURE LITERATURE 1. How organizational climate and structure affect knowledge management The social managementinteraction perspective. (Chen & Huang, 2007) 2. The relationship between product customization and organizational structure (Vickery, CorneliaDroge, & Germain, 1999) 3. Knowledge sharing in inter unit co operative episodes: The impact of organizational costructure dimensions (Willen & Buelens, 2009) 4. An holistic approach to understanding the changing nature of organizational structure (Doherty, Champion, & Leitao Wang, 2, 2010) 3 5 7 7 7 8 9 10 5. Theories of organizational structure and innovation adoption: the role of environmental change (Damanpour & Gopalakrishnan, 1998) 11 REVIEW OF LEADERSHIP STYLE LITERATURE 1. How Much Time Should CEOs Devote to Customers? (Quelch, 2008) 13 13 2. Organization development and leadership: R.B. Reid and the dynamics of success BRITISH successRAILWAYS (Barlow, 1996) 14 3. Leadership Types and Styles - Overview of Skills (Hick) 4. A dynamic theory of leadership Development (Mostovicz, Kakabadse, & Kakabadse, A dynamic theory of leadership developement, Vol. 30 No. 6, 2009) 15 17 5. Transformational versus servant leadership: a difference in leader focus (Stone, Russell, & Patterson, (2004,Vol. 25 No. 4)) 18 Current organizational Structure of TATA Motors COMPARISON & CONCLUSION TATA Motors with Organisation Structure TATA Motors with Leadership Style ANNEXURE 1. 2. Correspondence with Interviewee Interview Questionnaire 20 21 21 22 24 24 26 29 30 LOG OF VISIT BIBLIOGRAPHY 2 PGDIE 40, NITIE Mumbai INTRODUCTION Tata Motors Ltd has two business units – the Passenger Car Business Unit (PCBU) and Commercial Vehicles Business 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 Best systems & ethics.” Mission “To become world class automotive engineering & product development centre and enable To Tata Motors to become a world class automotive company. company.” Company Overview Tata Motors is India’s largest automobile company. It is the leader by far in commercial vehicles in each segment, and among the top three in passenger vehicles with winning products in the compact, midsize car and utility vehicle segments. The company is the ct, world’s fourth largest truck manufacturer and the second largest bus manufacturer with consolidated revenues of Rs. 92,519 crores (USD 20 billion) in 2009 2009-10. TATA Motors is one of the oldest automobile companies established in 1945 & delivered its first model on roads of India in 1954. Now, it is present all over the country. The company's manufacturing unit in India is spread across Jamshedpur (Jharkhand), Pune (Maharashtra), Lucknow (Uttar Pradesh), Pantnagar (Uttarakhand) and Dharwad (Karnataka). The company is establishing a new plant at Sanand (Gujarat). Over 5.9 million Tata vehicles 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 September 2004. It has also emerged as an international automobile company having operations in the UK, South Korea, Thailand & Spain. In year 2008, it acquires Jaguar Land Rover from Ford Motors & in the same year TATA launched Nano, people’s car. Fiat Group & Tata Motors announce establishment of Joint aunched Venture in India in 2007. Tata Motors acquires 21% stake in Hispano Carrocera SA, Spanish bus manufacturing Company. In 2004, it acquired the Daewoo Commercial Vehicles Company, South Korea's second largest truck maker. 3 PGDIE 40, NITIE Mumbai The company’s manufacturing base is spread across Jamshedpur, Pune, Lucknow and Pantnagar (Uttarakhand). Also the company has R&D centres in Pune, Jamshedpur, Lucknow, Dharwad in India, & in South Korea, Spain & the UK. TATA Motors developed the Korea, 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 years of launch, Tata Indica became India's largest selling car in its segment. In 2005, Tata Motors created a new ia's segment by launching the Tata Ace, India's first indigenously developed mini mini-truck. The company is establishing two new plants at Dharwad (Karnataka) and Sanand (Gujarat). The company’s dealership, sales, services and spare parts network comprises over 3500 any’s communication points. The People Tata Motors is having employee base of 24,165. The company helps its employees to realize their potential through innovative HR practices. The company’s goal is to empower and company’s provide employees with dynamic career paths in congruence with corporate objectives. All Allround potential development and performance improvement is ensured by regular in in-house and external training. The company has won several awards recognizing its training several programmes. 4 PGDIE 40, NITIE Mumbai PRODUCTS AND SERVICES Passenger Cars: The range comprises Tata Indica (compact car), Tata Indigo (sedan), Tata Indigo Marina (station-wagon) and Tata Nano (small car). The company also distributes and wagon) markets Fiat branded cars in India. Utility Vehicles: A range comprising Tata Aria (Crossover); Tata Safari (SUV), Tata Xenon XT (Lifestyle Pick-up), and Tata Sumo Grande MK II, Tata Sumo range and Tata Venture (People up), Carriers). Commercial Vehicles for goods transportation • • Small Commercial Vehicles Tata Ace, India’s first indigenous mini-truck. Vehicles: truck. Light Commercial Vehicles Pick-ups and trucks ranging from 2T GVW to 7.5T GVW. Vehicles: ups Commercial Vehicles for passenger transportation • • Tata and Tata Marcopolo range of light, medium and heavy buses from 2T GVW range onwards. Multi-purpose vehicles – Tata Magic, Tata Magic Iris, Tata Winger and Tata Venture – purpose for urban and rural transportation. Subsidiaries Companies These are various subsidiaries of Tata Motors. • Jaguar Land Rover • Tata Marcopolo Motors • Tata Daewoo • Hispano Carrocera • Tata Motors (Thailand) • Telcon • Tata Motors European Technical Centre • Tata Technologies • TAL Manufacturing Solutions • HV Transmission and HV Axles • Tata Autocomp • TML Distribution Co Co. • Tata Motor Finance 5 PGDIE 40, NITIE Mumbai Product Profile Passenger Cars Utility Vehicle Trucks Commercial passenger Vehicles Indica Sumo Small Commercial trucks (Ace) Bus Winger Indigo Safari Light Commercial trucks (TL4X4) Nano Xenon Intermediate Commercial trucks (Turbo Truck) Magic Fiat Medium & Heavy Commercial trucks Prima truck Construck 6 PGDIE 40, NITIE Mumbai ARTICLE REVIEWS ORGANISATIONAL STRUCTURE LITERATURE 1. How organizational climate and structure affect knowledge management The managementsocial interaction perspective. (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 used to test the hypotheses in a sample of 146 cases. Key Variables: Organisational climate, organisational structure, social interaction, knowledge structure, management. Findings:Firstly, the author has adopted the process oriented view to investigate the mediating process-oriented effect of social interaction on the relationship between organizational climate and organizational 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 employees’ behaviours an and influencing their perception of knowledge management. If the organization possesses a strong innovative and cooperative climate, employees would receive a clear signal that it is acceptable or desirable for them to build up interaction networks to share and gather knowledge. Conversely, if the innovative and cooperative climate is relatively weak or inexistent, employees would perceive a lower need to interact with colleagues. Besides organizational climate, the author also emphasises on organizational st structure which is likely to affect the social interaction among organizational members. As a result, the author expects that an innovative and cooperative climate would provide a vital atmosphere for strengthening social interaction among organizational mem members. The author also states the importance of mediating effect which gives the relationships between independent variables of organizational climate and organizational structure and dependent variable of knowledge management and states two hypothesis that the social interaction mediates the effect of organizational climate on knowledge management and Social interaction mediates the effect of organizational structure on knowledge management. These hypotheses have been explained by the author with regression method. 7 PGDIE 40, NITIE Mumbai Conclusion:1. First, the smaller sample size of this study raised the non response bias concern. non-response We have done the t statistics and w2 test to verify that the non t-statistics non-response bias is not a significant issue. Also, the sample size in our study is ba barely satisfactory to generate the meaningful results as the regression models include 8 8–12 independent variables. Accordingly, the smaller sample size of the survey is noted as a potential limitation in this study. 2. The study focuses only on two organizational context including climate and organizational structure. There are other organizational constructs that warrant discussion. Future research may explore how these different constructs affect intra intraorganizational social interaction and knowledge management. 3. The findings suggest that innovative and cooperative climate is positively related to social interaction. 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. interaction 4. These empirical evidences support the process oriented view and indicate that process-oriented social interaction plays the mediating role between organizational climate, organizational structure, and knowledge management. 2. The relationship between product customization and organizational structure (Vickery, CorneliaDroge, & Germain, 1999) Objective:This research examines the relationship between the extent of use of a product customization strategy and organizational structure, since structure is a key to ategy managers’ implementation of strategy. Key Variables: Product customisation, decentralisation, span of control Findings:Four aspects of organizational ‘structure’ are considered. They are 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 examining the main and moderating effects of environmental 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 PGDIE 40, NITIE Mumbai The main effects of size on structure were consistent with previous research: larger manufacturers are more formalized (in terms of performance controls and decontrols) centralized, and utilize more layers and wider spans of control. Manufacturers operating e Manufacturers in more dynamic environments are more decentralized, but have more rigorous formal control. Conclusion:Managers should thus understand that, for the most part, they need not concern themselves with size and environmental uncertainty when selecting an appropriate elves organizational structure to ‘match’ the desired level of product customizatio customization 3. Knowledge sharing in inter unit co operative episodes: The impact of coorganizational structure dimen dimensions (Willen & Buelens, 2009) Objective:The objective of article is how the classic organizational structure dimensions 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 unit organizational structure influences and shapes the cooperative episodes in which knowledge sharing takes place. To obtain this insight, we revisit four of the most important classic organizational structure dimensions, namely coordination, organizational centralization, formalization, and specialization; and assess their impact on inter inter-unit knowledge sharing. These classic organizational structure dimensions are underpinning the differentiation–integration bala integration balance, which has been the major focus in the classic organization theory literature The impact of coordination on knowledge sharing depends literature. on the kind of coordination mechanisms used, and this is closely related to the other structure dimensions (centraliz (centralization, formalization and specialization). Formalization indicates the extent to which the rights and duties of the members of the organization are determined and the extent to which these are written down in rules, procedures and instructions. Decentrali Decentralised, i.e. horizontal-coordination consisting of coordination teams, mutual adjustment, networking, and integration roles (less formal and decentralized) allows flexible coordination during task execution and can deal with ad hoc communication and information. 9 PGDIE 40, NITIE Mumbai Informal coordination (informal and decentralized) was not topical in the classic organization structure literature but received thorough attention 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 n, organization that is not intended or imposed by management management. Conclusion:Empirical data was collected by means of a questionnaire in two companies. Our findings indicated that expected relationships, such as the negative effect of relationships, centralization or the positive 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 knowledge sharing. A coordination comparison between the two companies revealed that the organization 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 theory, this theory might regain some of its lost value. 4. An holistic approach to understanding the changing nature of organizational structure (Doherty, Champion, & Leitao Wang, 2, 2010) Objective:This article discusses about one of the most debatable & important topic i.e. importance of IT on organizational structure & mostly about Enterprise Resource Planning (ERP). It is a well defined technology with low interpretive fl flexibility. Key Variables:Standardisation, formalisation, 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, impact the degree of horizontal integration, or the number of hierarchical layers. It is difficult to get an overall view of the impact of IT on organizational structure. ERP is typically acquired in the form of packaged software, with integrated modules that integrated support all major business functions across an organization, such as production, distribution, sales, finance & HR management. It encourages organizations to streamline & standardize their business processes across the organization & wi within individual business units. 10 PGDIE 40, NITIE Mumbai Strategy is also having significant impact on organization’s structure. Results of the quantitative analyses suggest that the configuration of an organization is influenced by ERP benefits & strategic 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 scale orientation, & then there are a most chances that organization will become flatter, the decision-making will be less centralized, level of horizontal integration will increase & its making working practices will become more standardized. Results of many previous studies say that, an ERP implementation is an extremely that, 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, with the structural models & management teams will only be prepared to make any significant changes to their organizations’ structure, to better align it with ERP. 2. This article does not give any particular answer to this debatable topic, but it mostly says that, it is successful ERP adoption that is driving structural change. 5. Theories of organizational structure and innovation adoption: the role of environmental change (Damanpour & Gopalakrishnan, 1998) Objective:This article discuss about various theories of Organizational structure & innovation adaption & their framework within which they are applied. Mostly these theories focuses on only one dimension i.e. type, radical-ness, or stage-of innovation at a time. of But in reality these dimensions are overlaps on each other & for the same reason these theories produce inconsistent results. Key Variables:Innovation adaptation, environmental change, Findings:In this article, authors also discussed about innovations, its adoption, rate & speed to adopt it by organizations & its sources like imitative, acquisitive & incubative. There are three structural theories of innovation: 1. Dual core theory: It distinguishes between administrative and technical tween innovations 11 PGDIE 40, NITIE Mumbai 2. The theory of innovation radicalness: It discusses about two aspects i.e. variation (routine) & reorientation. 3. The ambidextrous theory: It discusses about the pre-adoption activities that lead adoption to a decision to adopt & the activities that facilitate implementation and continued use of an innovation Article also tells that organizations is open systems seek a state of equilibrium with their environments and its dimensions 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. Unpredictable Four environmental sets of conditions: stable and npredictable. predictable (EC1), stable and unpredictable (EC2), unstable and predictab (EC3), and predictable unstable and unpredictable (EC4) A way to make a framework for above conditions is to (EC4). bring together elements of environmental change, organizational 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 innovation. 2. This article is having some limitations like it is complex in construct. It mostly focuses on external environment & not on other variables that impact structure structure–innovation adoption relationships, such as organizational technology, size and ownership. 12 PGDIE 40, NITIE Mumbai REVIEW OF LEADERSHIP STYLE LITERATURE 1. How Much Time Should CEOs Devote to Customers? (Quelch, 2008) Objective:Customers are the source of all cash flow. Organic growth depends on developing relationships with new and existing customers. And future growth prospects are baked into stock market valuations of companies The current economic downturn, companies companies. he need marketing skills more than ever. But while every corporate mission statement pays rketing lip service to respecting customer needs, actual customer expertise is typically a mile wide and an inch deep. Key Variables:Customer relationships, Consumer behavior, General leadership, customer satisfaction , Findings:"THE CUSTOMER IS GOD AND THE MARKET DECIDES EVERYTHING" is very well known quote it becomes even more pivotal in situations of economic crisis. But as seen very few of the CEOs of FORTUNE 500 companies have come up the ranks through marketing FORTUNE-500 and sales. Every corporate mission statement pays lip service to respecting 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 oriented, turf—in their homes, on job sites, in t their offices. A good CEO knows how to 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 customer 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 shelf satisfaction. customers on their home turf in their homes, on job sites, in their offices. turf—in CEOs must ensure an adequate pipeline of new product and market opportunities. This requires the investment in uncovering customer insights discussed above, either through business leaders regularly going into the field and through more formal customer research studies studies. CEO has to develop marketing talent throughout the company. This cannot merely marketing mean appointing a high profile rainmaker as chief marketing officer. It requires the high-profile long-term infusion of customer centricity and marketing strategy capability term throughout the organization. Over time, this should mean a higher percentage of general managers coming up through the marketing ranks. • • Conclusion:Every CEO should spend at least 10 percent of his or her time taking care of these three challenges i.e. human touch, customer relationship and . Running around visiting customers is simply not enough. 13 PGDIE 40, NITIE Mumbai 2. Organization development and leadership: R.B. Reid and the dynamics of success- BRITISH RAILWAYS (Barlow, 1996) Objective:To extract various qualities of leadership style from Reid’s tenure in British railways and comparison of it with leadership trends in TATA MOTORS. Key Variables:Leadership capacity, delegation of authority, commitment Findings:Reid carried through arguably one of the most fundamental and potentially far 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 the fastest in Europe, and BR ended that decades one of the most productive and certainly the most profitable rail networks in Western Europe.BR in before Reid However, the development 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 closing down routes where traffic could be handled more economically and effectively by road. In a nutshell, Beeching had sought to identify and mobilize the railways’ distinctive characteristics to greatest competitive advantage. dvantage. Although his plans remained largely in abeyance, they nevertheless remained as an agenda for regenerative change. His ( (Reid) wide-ranging experience, Astute, intelligent, ranging politically aware as well as professionally experienced, Reid knew how to get things done within the railways’ organization. He also knew what needed to be done. Within two years, Reid had delivered productivity 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 intimately. He knew what w needed to be done, and how to get it done: he possessed systemic leadership capacity He also knew how to operate the levers of power. He induced change built on success rather than to avoid failure. He communicated a success, clear vision and was decisive and determined in implementing it He set clear, it. achievable goals, and expected them to be achieved He delegated authority, giving achieved. clear mandates to others along with discretion to achieve results in w ways which were most effective. As a result, he created and won the commitment of new coalitions of professional managers and galvanized support within BR as a whole for the transformation he brought about. 14 PGDIE 40, NITIE Mumbai This view was endorsed recently by a director of one of the sector businesses, now disbanded, who summed up Reid’s achievement succinctly: Reid recognised the need for change. He created a sense of business purpose. He dissolved the Regions and replaced them with the sectors. The sector businesses were full of people who understood the . were industry and the business they were in. Reid got them all pulling in the same direction direction. There was a real feeling of achievement and success. Conclusion:• Wide- ranging experience, astute and intelligence and political a awareness, within two years, Reid had delivered productivity improvements and cost reductions on a scale that his predecessors had been Unable to achieve. • A clear vision & keen to 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 based on geographical regions. 3. Leadership Types and Styles - Overview of Skills (Hick) Objective:To identify when and where these leadership qualities to be used and how these is relevant to TATA MOTORS. Key Variables:Autocratic, Delegative /Free Rein, Democratic Findings: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 of 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 many over the course of time. 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 leadership. These three styles are well established though more specific types have been identified since. Leaders should not be confused with managers. 15 PGDIE 40, NITIE Mumbai Autocratic: a) What needs to be accomplished, as well as, how and when is the sole responsibility of when, the leader. b) Allow for quick decisions when time is crucial. c) This is a less creative approach. A "Do what you are told" Obedient and strict form of control. d) Use when a group or member doesn't have knowledge of the practice or procedure. e) The autocratic style works best when there is no need for input. Input will not change the decision or outcome. Democratic: a) The leader acts as a guide. Accepts input and seeks ideas and suggestions through discussion. b) Even though the leader may have the final say the team 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 committed when involved in the process of making decisions. They have a personal stake in the outcome. e) This style is mutually beneficial and helps improve people skills. Delegative/Free Rein: a) b) c) d) Minimal in direction. Allow decision-making by the team. making Works well when the team or a member is more knowledgeable about the subject. This style works best with highly motivated and well trained people. le Leaders are always managers but the reverse is not necessarily the case Good leaders case. will use the style or a combination 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 of business, sports, politics, religion and as close as home. Leaders must respond to the rapidly changin changing world and meet the challenges it demands. There are different types of leaders and you will most likely encounter many over the course of time. Conclusion:Leaders should not be confused with managers. Leaders are always managers but the reverse is not necessarily the case. Good leaders will use the style or a combination of styles that best fits the situation situation. 16 PGDIE 40, NITIE Mumbai 4. A dynamic theory of leadership Development (Mostovicz, Kakabadse, & Kakabadse, A dynamic theory of leadership develope developement, Vol. 30 No. 6, 2009) Objective:The paper examines selected leadership literature through the lens of theory building buildingblocks. It identifies the role of the ideal goal in leadership and its importance in developing the psychological 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 eader available from which to select, one should make choices in accordance with the leader’s worldview, looking for affiliation (i.e. the Theta worldview), or looking for achievement (i.e. the Lambda worldview). Consequently, leaders need to recognise Lambda that the choices they make for organisational activities have to fit their own worldview. Pursuing the fit between one’s worldview and planned organisational activities ensures that leaders continuously improve their ethical behaviour. The paper continuously concludes with the presentation 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 the future. Leadership is about making choices. The c Leadership choice is a binary action that divides options into two sets, the desired and the undes undesired ones, according to a higher principle or value. Conclusion:The paper conceptualises that leadership quality develops by making choices according to the following two world views: 1. Theta model- Socially oriented 2. Lambda model Personally oriented modelThus keeping with either of the two world view a leader keeps on making choices. These choices create memory based on which leader take decisions for future. Thus leadership that was historically considered to be either as purely in born quality or as purely a learned behaviour is now known to be a Dynamic leadership development process. This means that an Ideal leader does not exists but a leader always strives to achieve ideal ethical behaviour continuously. 17 PGDIE 40, NITIE Mumbai This paper puts the views on 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 capacity. 5. Transformational versus servant leadership: a difference in leader focus (Stone, Russell, & Patterson, (2004,Vol. 25 No. 4)) Objective:This article examines transformational leadership and servant leadership to determine what similarities and differences exist between the two leadership concepts. Key Variables:Leadership, Transformational leadership, Influence Findings:The transformational leader’s focus is directed toward the organization, and his or her behaviour builds follower commitment toward organizational objectives, while the servant leader’s focus is on the followers, and the achievement of organizational objectives is a subordinate outcome. The extent to which the leader is able to shift the primary focus of leadership from the organization to the follower is the distinguishing factor in classifying leaders as either transformational or servant leaders. This article r also looks at the next stage of developmental issues in servant leadership, such as the challenges facing empirical investigation and measurement, and the changes that are occurring in current thinking about the servant leadership approach. The primary premise of the article is that transformational leaders tend to focus more on organizational objectives while servant leaders focus more on the people who are their followers. Transformational leaders transform the personal values 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 in which visions can be shared. Idealized influence is the charismatic element of transformational leadership in which leaders become role models who are admired, respected, and emulated by followers. Transformational leaders inspire and motivate others by “providing meaning and challenge to their followers’ work” The leader inspires followers to see the attractive future state, while communicating expectations and demonstrating a commitment to goals and a shared vision. Idealized influence and inspirational motivation are usually combined to form charismatic charismatic-inspirational leadership. Similarly, the Transformational leaders play a vital role in Intellectual . stimulation of employees, Individualized consideration, 18 PGDIE 40, NITIE Mumbai While servant leadership is an increasingly popular concept, throughout much of its history the concept has been systematically undefined and lacking in empirical support. Conclusion:Both transformational leaders and servant leaders are visionaries, generate high levels of trust, serve as role models, show consideration for others, delegate responsibilities, consideration empower followers, teach, communicate, listen, and influence followers. Certainly, transformational leadership and servant leadership are not antithetical theories. Rather, they are complementary ideologies because they both describe excellent because forms of leadership. Nonetheless, there are significant points of variation in the concepts. Most importantly, transformational leaders tend to focus more on organizational objectives while servant leaders focus more on th people who are the their followers. 19 PGDIE 40, NITIE Mumbai Current organizational Structure of TATA Motors rganizational 20 PGDIE 40, NITIE Mumbai COMPARISON & CONCLUSION TATA Motors with Organisation Structure ith As per article relating organizational structure & climate with knowledge management, organizational climate plays an important role on employees’ behaviour The same concept behaviour. held true in case of Tata motors. They are having frequent interactions with their employees & workers, formally & informally which helps employees to feel more bounded with organization. Also, it helps in gathering & sharing the knowledge. As Tata motors is having relatively flat structure, it helps them in easy interaction between various level in structure which improves knowledge & ideas sharing within organization. One of the article talks about product customization & organization. It also 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. Article also relates environmental uncertainty with product customization. But for Tata motors, how environmental uncertainty effects product customization is not so clear. In decentralization, the main Tata group has command over Tata motors, but all strategic actions & plans are taken by board of directors of Tata motors itself. Other paper defines various impacts of organizational structure dimensions on knowledge sharing. One of the dimensions is formalization & it defines specific role & duties for defines employees, their responsibilities. 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 financially. 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 circ circulated on regular basis. The higher level management is always accessible to the lower level. This helps them to gather, share & spread the knowledge & ideas very easily from level to level. In today’s world of computerization all the activities are need to be computed and all the data is to be maintained precisely to take the major management decision. Based on this data all the activities of the all departments like production, manufacturing, purchase, finance, operations, etc can be interlinked. Thus th article the gives the importance of Information Technology on organizational structure & mostly about Enterprise Resource Planning (ERP). During the initial years in 90s, TATA Motors was not having any efficient software that will monitor all the activities of the organization. Nowadays, the TATA Motors is using various software like for ease of all these activities like ERP & SAP also various design software like CATIA, UG, AUTO CAD, etc. 21 PGDIE 40, NITIE Mumbai This enables TATA Motors to be more efficient in delivery, payme payments, order execution, as well as in maintaining in house inventory as well as ware house in-house inventory management systems. The company has become one of the best in the supply chain management system due to incorporation of these IT solutions. All the departments of TATA Motors are interconnected with intra networking ents system, as well as all the divisions are connected with internetworking system. This enables the easy and fast flow of information among the employees, management including the board of directors, vendors, suppliers. The company is publishing directors, various articles, newsletters about the wellbeing of the employees, promotions, deaths, etc periodically. This keeps all the employees to be connected to the organization all the time and gives them the latest updates and happening in and latest around organization. In one paper, it mostly focuses on innovations and how it helps to improve organizational structure and its stability. In Tata motors, they also focuses on innovations, as likely said in introduction company has introduced various innovative company models in market and they became a boom. For example, Tata Nano, it is a dream of its chairman Mr. Ratan Tata, to make a car for middle class families in Rs. 1 lakh. and they launch it in market successfully and it creates a blast in automobile industry creates worldwide. Also, other models like Tata Ace, these are firstly India's first indigenously developed mini truck & Tata Magic is one of its own kinds. This type of mini-truck innovations creates some kind of spirit to work for organ organization with full responsibility and enthusiasm, sense of belongingness towards organization. All the officers as well as employees of Tata motors started feeling ‘Nano’ as their own project. Due this reason, Mr. Ratan Tata was able to deliver his dream in reality within stipulated time period. Research and Development department of Tata motors is working continuously on designing and developing new innovative product range. Various joint ventures of the company also working for the same goal like Jaguar, Land Rover, Fiat, Xenon, etc. These practices help company to strengthen its and organizational structure. TATA Motors with Leadership Style ith The group chairman Ratan Tata is responsible for transforming Tata Motors Ltd. into a Group strategy think think-tank and a promoter of new ventures in high technology businesses. His vision of making a truly international company brought in a foreign CEO. As per one of the paper there is no such ideal leader rather one evolves as an ideal leader with experience. Initially his decisions were criticized but now he is assumed to be one of the best in the world. He is currently part of 203 board members in 20 different organizations across 23 different industries. 22 PGDIE 40, NITIE Mumbai Earlier Tata Motors was seen as a sleepy company. Its products were dependable but were few said they’d buy their cars for personal use. Its trucks were also bought for price first. Reliability was a lesser consideration. But since then the company has had a slew of successful launches – the Indica Vista, the Manza, its range 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 charge is Carl Carl-Peter Foster who was in charge of General Motors’ European operations and he is trying to internationalize the company in true sense. Every plan in the company is first evaluated under Enterprise Risk Management team. The parent group doesn’t have much control over the TATA motor and it the it’s CEO of the company who is the boss. He draws a hefty salary of over 34 lakh plus bonus and incentives per month and is on a contract period of three years. He is a true leader with a clear vision of bringing TATA motors on international grounds. He pays a lot of focus on R&D. He can be said as a leader first while the group chairman can be said to be servant 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 March 2009, since then he has been doing a fairly good job continue to increase sales while simultaneously cutting costs. He doesn’t spend too much time with the end customers but addresses the whole company quarterly. 23 PGDIE 40, NITIE Mumbai ANNEXURE 1. Correspondence with I Interviewee Communication from group member to interviewee through e e-mail Reply from interviewee to group member through e mail. (The interview date was rescheduled by e-mail. the official to 25/8/2010 over phone) 24 PGDIE 40, NITIE Mumbai We conducted the second interview telephonically with Mr Rakesh Kapoor , Deputy Manager ond (Product Development – Electricals) Pune on 29th August 2010 at 1530 hrs. 25 PGDIE 40, NITIE Mumbai 2. Interview Questionnaire 1. What are the organization’s goals and Mission? Vision "Best in the manner in which we operate, best in the products we deliver, and best in our value system and ethics.“ Mission “To become a world class automotive engineering and product development centre centre, and enable Tata Motors to become a world class automotive company.” 2. How many divisions does TATA Motors have? Are the Divisions of the organization based on geographical situation or based on products differentiation? Or is it a mix of both? TATA MOTORS has a mixed organizational structure. There are two main divisions based on product type viz Commercial vehicle division and Passenger cars division. sed Both these divisions have been subdivided as per geographical location into north south east and west zone. 3. What are the opportunities to get promoted over the years? What is the career progression program/policy deployed in TATA Motors? There is a very great scope of growth along with the company. On an average a normal middle level employee is promoted every 3 5 years. An employee with 3-5 exceptional record and good performance is promoted on an average of two years. performance 4. How much support is made available to individuals for professional development such as – professional courses, seminars and trainings, higher education? ofessional Tata does provide research opportunities. It encourages research based projects. It has tie ups with various universities. Scholarship of 50% up to 100% is provided by the company for higher education. They also have in house training programs. education. 5. Who decides the work distribution? And How? The work is distributed in based on strategic activities or operational/routine assignments. The strategic level activities are taken up by top management. The operational activities are distributed to middle and lower level. This becomes the base of their yearly performance appraisal. 6. Are new ideas from employees welcomed? If an idea is found good enough then is it implemented? Yes new ideas are welcomed from the employees and they are rewarded suitably. They have a suggestion boxes to invite new ideas. Few ideas have also been 26 PGDIE 40, NITIE Mumbai implemented. (When asked very trivial example was given, like change in shape of envelope). 7. How much control of parent company is there on TATA Motors? TATA Motors is more or less independent. All the strategic decisions are taken by Board of directors of TATA motors. 8. What is the reporting procedure and flow flow? 9. How often management interacts with employees? The management interact with the employees on a regular basis. The chairman addresses the whole company thrice a year, MD visits each division quarterly. Accordingly the lower management have meeting with employees on day to day basis. 10. How often different departments comes together and at what level? together Every month there is a ManCom meeting. Apart from that there are various cultural activities throughout the year. 11. Is the interaction among employees (at different posts) only limited to formal levels or interaction is there on personal level also? The functional group meets thrice a year for a cultural event with families. The welfare association conducts various activities throughout the year which involves employee and their family including different sport activities. 27 PGDIE 40, NITIE Mumbai 12. Is there any difference in working styles of an Indian CEO and a Non Indian CEO? No, there is no much difference in their working. 13. How the span of control of managers at TATA Motors? At corporate level the span of control varies from 1:5 to 1:7. While at t middle and the lower level management it varies as 1:10. This indicates that the organisational structure is somewhere between flat and hierarchical structure. 14. To what extend decision making power given to a department? How much does the top level interfere in working within a department? e Each employee is bound by TATA Code of conduct and authority matrix which clearly identifies different responsibilities and decision making powers of an individual both functionally and financially. 15. In general, in TATA Motors, whether the managers act as a mentor to their Motors, colleagues/juniors? Yes, they have a mentoring program which enables each employee to empower themselves in the functional areas. 16. How the organisation communicates effectively with the employees? How lo long does it take for a message to reach from top of the organization to bottom and vice versa? They have 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 higher level management is always accessible to the lower level. 17. What practices do you implement during conflicts? Have you ever had to make a decision without knowledge of all the needed data? In case of conflicts the action plan is chaired by top management. 18. How do you approach complex problems? Like In case of NANO’s Singur Plant, what factors prompted to cancel the project there in spite of huge investment already incurred? They have an Enterprise risk management (ERM) team that studies and evaluates ise different aspects of any occurrence on operational, functional and strategic background. 19. Is TATA Motors a product oriented organization or people oriented organization? TATA Motors is more of a product oriented organization. 28 PGDIE 40, NITIE Mumbai LOG OF VISIT Whom visited 1. Mr. Rajesh Aidoor, GM (Internal Audit & ERM) TATA Motors Limited 4th Floor, One Forbes, 1 Dr VB Gandhi Marg, Fort Mumbai – 400 001 2. Rakesh Kapoor Deputy Manager (Product Development – Electricals) R&D Department, Pune Tata Motors Pune - 411033 Who Visited 1. Sumit Guha Roll no: 104, PGDIE 40 Batch of 2012 National Institute of Industrial Engineer (NITIE) Mumbai Sunit Mhasade Roll no: 105, PGDIE 40 Batch of 2012 National Institute of Industrial Engineer (NITIE) Mumbai 2. 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 29th August, 2010 1530 Hrs Telephonic Second Interview Date : Time : Nature : - 29 PGDIE 40, NITIE Mumbai BIBLIOGRAPHY Barlow, G. (1996). Organization development and leadership:R.B. Reid and the dynamics of success. Leadership & Organization Development Journal , 3-8. Chen, C. J., & Huang, J. W. (2007). How organizational climate and structure affect knowledge management- The social interaction perspective. International Journal of Information Managament , 104-118. Damanpour, F., & Gopalakrishnan, S. (1998). 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