Question

The House of TATA

1. What advantages does the Tata Group fain from being a conglomerate?

1. What are institutional voids ? Why might they encourage the conglomerate form of organization in emerging markets?

1. Many corporate takeovers involve the acquiring firm installing their own managers and slashing the payrolls of the acquired firm. Why has Tata chosen to retain the existing management temas of the foreign companies it has taken over?

1. The Tata Group has a strong commitment to high ethical standards and corporate social responsibility. Does it gain any competitive advantages in the market place because of this commitment?

Answer 1

Tata group as conglomerate has business advantage of diversification across sectors which leads to risk mitigation and helps them navigate different business cycles and tap global emerging markets.

Institutional void is an absence of intermediate firm which would help connect buyer and seller.

This leads to encouragement of conglomerates which leads to expansion of businesses into non core areas and aids in existing business supports.

Tata group has refrained from slashing payrolls of acquired firms because of its group policy of employees first and safety ajd security as prime most important values to improve employees retention rates and be recognised as truly global responsible corporate citizens with best place to work for tags.

Tata groups high ethical standards and CSR commitment helps it in gaining competitive advantage as it becomes easier for investors to invest and pump money in such organisations with ethical standards and transparency and high level integrity of management. Subsequently Tata group firms have had multiple tranches of investment from foreign funds which has helped them in gaining business expansion and licensing in foreign markets.

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