The House of TATA What advanta
The House of TATA
- What advantages does the Tata Group fain from being aconglomerate?
- What are institutional voids ? Why might they encourage theconglomerate form of organization in emerging markets?
- Many corporate takeovers involve the acquiring firm installingtheir own managers and slashing the payrolls of the acquired firm.Why has Tata chosen to retain the existing management temas of theforeign companies it has taken over?
- The Tata Group has a strong commitment to high ethicalstandards and corporate social responsibility. Does it gain anycompetitive advantages in the market place because of thiscommitment?
Answer:
Tata group as conglomerate has business advantage ofdiversification across sectors which leads to risk mitigation andhelps them navigate different business cycles and tap globalemerging markets.
Institutional void is an absence of intermediate firm whichwould help connect buyer and seller.
This leads to encouragement of conglomerates which leads toexpansion of businesses into non core areas and aids in existingbusiness supports.
Tata group has refrained from slashing payrolls of acquiredfirms because of its group policy of employees first and safety ajdsecurity as prime most important values to improve employeesretention rates and be recognised as truly global responsiblecorporate citizens with best place to work for tags.
Tata groups high ethical standards and CSR commitment helps itin gaining competitive advantage as it becomes easier for investorsto invest and pump money in such organisations with ethicalstandards and transparency and high level integrity of management.Subsequently Tata group firms have had multiple tranches ofinvestment from foreign funds which has helped them in gainingbusiness expansion and licensing in foreign markets.
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