TATA's strategic mapping in UK

The latest in a slew of reports from the TATA bandwagon has been the successful completion of a multi-year, multi-million dollar transformation project by TATA Consultancy Services at Phoenix Group, the UK’s largest specialist consolidator of closed life funds.

Tony Kassimiotis, Managing Director, Phoenix Group, said, “This transformation project will streamline services to improve the experience for our customers and we are delighted with the way TCS and Diligenta have ensured its smooth delivery.” This deal stands as a significant one making TCS BaNCS, a major platform in the UK Life and pensions industry.

N Ganapathy Subramaniam, President, TCS Financial Solutions, on concluding the project said, “TCS BaNCS is now positioned with proof points to deliver significant benefits around business process re-engineering, product rationalising and disparate data migrations. A simplified IT landscape not only enhances efficiencies for Phoenix Group but delivers best-in-class customer experience as well.”

Is the West being shaped by Asian wealth?

With foresight and vision, the TATA’s have grown overseas and are one of the most respected groups outside the country. Ratan Tata’s commitment is lauded by India Inc. for taking it international and owning Tetley Tea (2000), Anglo-Dutch Steel Maker Corus (2006) and Jaguar Land Rover (2008).

As is clearly reflective of TATAs’ aspirations, it can be said in some respects, that the West is being reshaped by Asian wealth. Intriguing it is to see how investment decisions of the East are invariably supporting and rescuing European businesses.

The economic downturn creates great opportunities for Asia allowing them to pick up distressed assets at knock down prices. If it is any surprise after all, three-quarters of the world’s savings come from Asia. In the same breath, Britain earns several times more from such foreign investments that it pays out in dividends.

Jim Wood-Smith, head of research at wealth management firm Williams de Broe says in a recent news report, “Investment into the UK by emerging market companies is booming, with nearly £83 billion being invested here last year by groups such as TATA - now the UK's largest industrial employer thanks to its £9.6 billion investment in buying Jaguar, Land Rover, Corus Steel and Brunner Mond (formerly ICI), as well as Tetley Tea."

“Managers not willing to walk that extra mile” – a cultural difference?

Early last year, Ratan Tata expressed his concerns over the difference in the work ethics of UK Managers and Indian Managers. Pointing towards Corus and Jaguar, he said, “Managers at these firms are not willing to go the extra mile in a critical situation, while their Indian counterparts would work till midnight in 'a war-like situation'".

He said "I feel if you have come from Bombay to have a meeting and the meeting goes till 6pm, I would expect you won't say at 5pm, 'Sorry, I have my train to catch, I have to go home'".

“The worker in JLR seems to be willing to do that (go the extra mile); the management is not,” he added.

While he wasn’t making a generalisation about British management, he did express his disappointment referring to attitudes/behaviours in both companies immediately following the acquisition of Jaguar Land Rover.

His frustration rose from the meeting scenario he described -- having flown in from Bombay especially for a meeting with JLR scheduled until 6.00pm, only to have participants leave at 5.00pm sharp - which left an indelible impression on him.

Clearly, significant cultural differences can be seen in working hours and related expectations. The tendency to go home by five or six can be interpreted by Asian companies as showing a lack of dedication and commitment.

Having recognised this as a legitimate cultural difference, not 'work ethic' or a 'commitment' issue, the resolution was to agree 'core working hours' when everyone would be available.

It had been observed that prior to the Tata acquisition, the employees at Jaguar, took immense and personal pride in their products, but the culture was quite entrenched in valuing quality, beauty and perfection over efficiency and productivity.

'We produce beautiful, iconic cars for the wealthy, that can't be rushed,' remained the sentiments of employees, as pointed out by an insider at Tata’s.

“So, whilst I don't think Tata's comment that British Managers (at JLR) was a correct interpretation of the real attitudes behind the behaviours, I do think a 'shake up' in culture and work practices was needed to enable the company to regain profitability,” the insider adds.

Bidding farewell to the CTO in Wales

TATA’s calendar has been embedded with a number of important events in the past week. Besides winning a major contract from Siemens to supply 25,000 tons of quality profiled steel plate for turbine towers, Tata Steel Europe’s Chief Technology Officer, Uday Chaturvedi who headed the UK, was given a farewell by the First Minister in recognition of his outstanding leadership during his time in Wales.

First Minister Carwyn Jones, in a recent news report said: “Uday has been an inspirational figure in Welsh manufacturing and I wish him well. In both his role as managing director of Strip UK and subsequently as Tata Steel Europe CTO we have appreciated his personal commitment to support Wales as a place to do business. We greatly value that someone of his standing and esteem appreciates the quality of the Welsh workforce and what Wales has to offer major international businesses.”

He added, “Our positive and constructive relationship with Tata will continue to be developed to support the long-term future of the Welsh steel industry.”

While appreciation looms large in Wales, at the arbitrary closure or mothballing of the Tata steelworks in Newport, an employee takes a critical view. “It is often with our help and subsidies that foreign companies establish their industries with local workforces only to have them struck down because of prices not being right or problems in their own country.”

He adds, "The same would not be true if we had to enter their markets. While Tata is all powerful, we struggle to enter their markets with massive obstacles."

What does Tata’s succession mean for the UK

Objective yet cynical reports have been dominating the media regarding the succession of Ratan Tata by Cyrus Mistry, a 43-year-old businessman keeping the job within a complex extended Parsi family. He has now been appointed deputy chairman of Tata Sons and will be heading the group with 425,000 employees. While this breaks the direct line of the Tata dynasty after three generations, control of the group still stays within the extended Tata family.

With the manner in which succession in family-owned businesses has been carried out in Asia, there might be reason for worry adding to the awe and envy at the way the Tata's have been rescuing European operations and the acquisitions they will further undertake under Mistry.

Steelmakers fear the UK could lose its leadership position on issues such as de-regulation and competitiveness, while other manufacturers fear growing isolation from a key market. Tata Steel is considered hugely important to both the local economy as a major employer, and to the UK economy as a whole. It has been able to garner sufficient political support at the local and national political levels.

While Britain has become a global hub in the web of car and engine production, much of it has to be credited to the investments made by emerging markets, in the face of the failure of UK firms to keep pace with emerging giants.