Tata Nano : The Car of The People

BUSINESS ENVIRONMENT

WRITTEN ANALYSIS OF CASE (WAC)

OF

TATA NANO

SUBMITTED BY:

NAME : TOSHIT KUMAR SANTRA

ROLL No. : 17021141109

DATE OF SUBMISSION : 22.07.2017

TATA NANO : THE CAR OF THE PEOPLE

Tata Nano was one of the major projects of the Tata group. It was started in the year 2008.It was a dream to build a small compact, environment-friendly, fuel efficient car, which  later became a reality.

It was affordable to the common people. Ratan Tata announced the launch of the car. Earlier the plan had to undergo a lot of difficulties and criticism from its competitors. Since the cost of the car proposed was Rs 1 lakh only it got a lot of popularity in the media and became headline of many newspapers.

In India the common man has to face a lot of difficulties while driving a two –wheeler especially during rainy seasons, this was taken as an opportunity by the Tata to launch a car which would be safer in design and also contributes tp the ergonomics and aesthetics of a car.

The journey of the least cost car was very long and lot of innovation and designing was required. It even faced a lot of political problems and protests. But the car was constructed and people purchased it. Minimization of cost was the biggest challenge faced by the engineers and low weight was another concern.

Ques 1. What responsibilities companies have to the society in which they operate, beyond making a profit – if any? Are social and environmental performance just constraints within which companies have to operate in order to maximize profits?

Ans 1: The companies these days have many responsibilities towards the society, other than focusing only on profit making. For instance the concept of Corporate Social Responsibility(CSR) is prevalent in many corporate and MNC’s. In the given case study dealing with Tata Nano, the main objective was to design and construct an environment – friendly, fuel efficient, and affordable vehicle. The company emphasized on designing a low cost car which is affordable to the common man. The companies are investing in building schools for the children of the employees, hospitals etc. Tata Nano improved the quality of life of the local people by creating lot of employment for the local people of Singur, West Bengal, trained them and converted the needs of the people to different programs. Tata Nano could have provided land to the local people for agriculture. Social and Environmental performance is sometimes a constraint as many times it is seen that companies have to compromise either on their profits or environment. Moreover, the responsibilities are not executed properly, as a result of that the lives of people is affected.

Tata  worked towards empowering people by helping them develop the skills they need to succeed in a global economy, which is now consolidated into a group CSR programme . The group equips communities with information, technology and the capacity to achieve improved health, education and livelihood outcomes. It also works towards enabling other living things on the planet get their fair share of the resources. They have tie ups with many NGO’s for the upliftment of the local people.

CSR programmes aim to be relevant to local, national and global contexts, keep disadvantaged communities as the focus, be based on globally-agreed sustainable development principles and be implemented in partnership with governments, NGOs and other relevant stakeholders.

Ques 2. How can companies manage political activism in the country where they operate? What kind of due diligence should they undertake to manage the resulting risk?

Ans 2 : Firms should consider the following ways or methods to manage political activism:

• Insurance as an option : Firstly what companies must do is fully understand insurance as a powerful way to mitigate political risk. At macro level political risk and catastrophes are difficult to manage. At the company level, political risk can be avoided against for a premium.
• Companies need to acknowledge the macro and micro political risk environment. Micro

Level risks impact industries or projects, macro level risks affect the entire economy.

• Leaders need to diversify their political risks : Firms that have strategic business units in various geographies need to acknowledge their cost base, and that some regions that look very attractive might also carry high political risks.

• Political risks are taking new and different forms.  In advanced economies, governments are dealing not only with real and perceived income inequalities but with high levels of sovereign debt, as illustrated by the Eurozone discussions. Other types of political risk – including state actions to promote state-owned companies; actions to tap into the cash flow of companies operating within national borders; and the building of trade barriers – are ongoing and have the potential to pose significant problems to many companies. 

The instruments used by many organizations are simply too blunt for the changing, complex political environment in which they operate. Political risk may have different characteristics than other types of risk, but it can – and should - be managed.  Effective management of political risk can enable companies to enter and navigate new markets and business environments, providing a potential for competitive advantage.

The 3-way approach:

1.Identify :  In this first stage, risk managers identify the main political risks by geography. The key question at this stage is: How can political actors or conditions directly affect our objectives?. Risk managers can develop an inventory of political risk types, ranging from capital controls to increased taxation to strikes and protests to wars and terrorism, to scan the horizon for potential risks.   

  The risk management team will then develop an evidence-based set of risk scenarios, based on both well-defined and highly specific data directly relevant to the company’s objectives. A scenario set gives risk and business managers a basis upon which to define their data requirements.