Challenges in Managing a Large Business Essay

2003 WordsMay 8, 20129 Pages
Tejas Article : The Tata Group: Challenges in Managing a Large Portfolio 1 of 4 http://tejas-iimb.org/articles/04.php?print=true THE TATA GROUP: CHALLENGES IN MANAGING A LARGE PORTFOLIO Faculty Contributor: Sourav Mukherji, Associate Professor Student Contributors: Saurabh Bhansali, Sandeep Das Managing a portfolio of close to 100 companies is a mammoth task for any business house. Questions over acquiring newer firms and divesting non-performing firms need to be answered on a regular basis. These questions have become extremely important for the Tata Group as they have used the inorganic growth route extensively to scale up their international operations. This article looks at Tata’s inorganic expansion and performs a portfolio analysis for the group identifying potential divestment targets. The analysis leads to the conclusion that it is in the interest of the newer companies to be a part of the Tata Group to leverage on the Group’s brand equity. The definition of growth has changed quite dramatically from the days when organic growth was considered the primary channel of progress. This is exemplified in the case of the Tatas where inorganic growth, through leveraged buyouts and sometimes audacious deals, has driven expansion over the last decade. With accelerated growth comes the challenge of integration and proper management of the portfolio of companies. The top management has to often answer the question mark over the business house’s role in keeping all these companies under one roof. The following sections contain a look at Tata’s inorganic expansion, a portfolio analysis for the group and an assessment of whether the newer companies should be part of the Tata Group. Tata Group- A Snapshot The Tata Group is India’s largest business group accounting for 5.2% of India’s GDP and operates in over 80 countries with

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