STRATEGIC HUMAN RESOURCE MANAGEMENT

TATA STEEL: GROWTH THROUGH CREATING SYNERGIES IN VALUE CHAIN

PRESENTATION BY:-

ANKUR AHUJA 191012AVTAR SINGH 191020NIKHIL SINGH 191036PALLAVI 191040PARMINDER SINGH 191041SAURABH ARORA 191053

BACKDROP OF THE COMPANY

• Established in 1907• Asia’s 1st and India’s largest private

sector steel company• Plants @ Jamshedpur, Jharkhand • Products include:-

hot and cold rolled coils and sheets, galvanised sheets, tubes, wire rods, construction rebars, rings and bearings.

VISION

To seize the opportunities of tomorrow and create a future that

will make TATA an EVA positive company.

In the near term what strategic ‘outcomes’ would TATA Steel

should be aiming at…?

STRATEGIES FOLLOWEDCORPORATE STRATEGIES:-• Expansion of capacity at Jamshedpur• Set up of greenfield plant in Jharkhand• 10 MTPA plant in Orissa in Kalinganagar• Acquisition of NATsteel in Singapore• Acquisition of millennium steel in Thailand• Acquisition of Corus Steel

OUTCOMES EXPECTED

• The acquisition hence give rise to greater market reach as discussed above steel producer.

• Access to high growth Asian markets.• More than 50% of the European

markets are been covered.

• Acquisition results in consolidation of the steel industries which deter the bargaining power of both suppliers and buyers.

• Acquisition also results in new technology upgradations.

• resulting in decrease in investments in R&D

• flooding the market with high end differentiated products.

STRATEGIES FOLLOWEDCOMPETITIVE STRATEGY:-• Leveraging on its advantages of cheap

raw materials• Acquisition of Ferro Manganese unit in

South African Iron Ore.• Joint Venture in Iran for producing steel billets with Iron Ore form Iran.

OUTCOMES EXPECTED• Jamshedpur plant will provide the semi

furnished steel for NatSteel and for Chorus bases.

• Orissa and Jharkhand are dotted with small rolling mills that have been lying idle due to shortage of coal and iron ore. Tata Steel will supply these mills with both these resources and buy billets from them.

STRATEGIES FOLLOWEDCOMPETITIVE STRATEGY:-• Maintain the low cost advantage of

producing the steel at lowest cost upto the primary making stage.

• De-Integrated manufacturing followed.

OUTCOMES EXPECTED• NatSteel's cost of production is about 30-

40 per cent higher than Tata Steel's, so supplying NatSteel with billets (semi-finished steel) from India and if NatSteel's electric arc furnaces are shut and scrap is substituted by billets, then its cost of production will come down by about $100 a tonne.

How would the strategic intent and implementation affect the value chain

activities in TATA Steel? What would be the main challenges here?

TATA STEEL’S STRATEGY

breaking up the primary and finishing stages of the value chain and putting each part where it's the most cost-effective.

 

EFFECT ON THE VALUE CHAIN• Jamshedpur will provide the semi finished steel for

the NatSteel bases. •  In few years it could well come from Iran or

Ukraine.• Supplying the billets directly will result in closing

down the Electric Arc Furnaces.• It will bring a $100 difference

in the cost of production at

NatSteel in 2 to 3 years.

CHALLENGES

• SOARING FREIGHT COSTS• SHIFT IN LONG-TERM LINKS WITH THE

RAW MATERIALS• RAW MATERIAL SHORTAGE• RECESSIONS AND ECONOMIC

FLUCTUATIONS• EMERGING COUNTRIES LIKE CHINA

As the HR director, identify the new competencies and behaviours required

in the organisation

“Focus on making the weakest link stronger than cutting off the weakest from the

organisation”

• Install a transparent and unambiguous governance code

• Redeploy some of the workforce at the greenfield

• Training of employees to induce a global outlook

• Focus on leadership development• Separate HR department from IR department• Redesign the organisation to match people

with position

• Have a motivated workforce• Initiate performance appraisal systems• Build a high performing team• Adequate rewarding system• Identify key positions and define their roles• Impart necessary Skill training• High focus on creating leaders• Promote self-directed learning