Tata Steel Economic Value Added Position

847 Words4 Pages
Tata Steel has survived through liberalization and has flourished in the wake of global competition. It will continue to flourish by meeting its vision to be an EVA positive company while maintaining social responsibility. In order to accomplish Tata Steel’s current initiative of EVA positive business practices, will have to adjust priorities when budging out expenditures for sustainability practices. By setting budgeting priorities in the following order (1) the Joint Department Councils, (2) the Town Division, and (3) the Tata Steel Rural Development Society, we should be able to succeed in our vision of being EVA positive. With an emphasis on budget priorities and by cutting excess expenditures in less desired sustainability practices, Tata Steel will create value for shareholders and become an investor attractive company. When setting the sustainability practices budget, the Joint Department Councils will be our number one funding priority. The JDC budget is small compared to other sustainability practices and the benefits are vast. The JDC is a collaborative partnership with the labor union and facilitates employee buy-in to Tata Steel policies. Dr. Irani demonstrated this by successfully working with the labor unions during liberalization. Dr. Irani cut a bloated workforce from 78,000 to 48,800 employees. Ultimately, the workforce reduction raised NOPAT and made Tata Steel an investor friendly company. By leveraging the JDC in the same manner as Dr. Irani, Tata Steel will be able to gain labor buy-in to the EVA vision. Furthermore, the JDC needs to be our number one priority, since the steel industry in India is known for frequent strikes and walkouts. The buy-in and sense of ownership the JDC gives to Tata Steel’s employees is the reason why we have not had a strike since 1928. Compare that to the 9.35 million man-days lost due to strikes in India
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