Responding to the Crisis
The Tata Steel Way
The steel industry is no stranger to market turbulence. Since it was founded in 1907, Tata Steel has risen to each and every challenge, as have its subsidiaries. The latest challenge has come from the economic downturn, which has destroyed vast amounts of wealth across the globe. In response, the Tata Steel Group has reassessed its operating performance in order to strengthen its foundations.
The Company swung into action recognising that this economic downturn was deeper than what had been previously experienced and was also more global in scale. The operating plan was realigned to reflect the current realities of the marketplace while working capital generation and utilisation was optimised.
The Company looked at the slowdown as an opportunity to act quickly and effectively to create value and has undertaken several initiatives over the last year. Cross-functional strategic teams were assigned to drive transformational change across key process areas. Managers were asked to make resource allocation decisions while serving two competing yet equally critical goals: keeping the organisation viable during the economic downturn and readying it to surge forward when the winds are favourable again. This was a time to identify best working practices and act on them.
Tata Steel has been working to enhance customer satisfaction and expand relationships with existing clients. It has looked strategically at cost-cutting, which was an inevitable consequence of the economic downturn. To fight against rising costs, the Company reorganised its business plans, tightened budgets and eliminated unnecessary costs, and thus achieved its primary goal of emerging as a leaner, cost-effective and more efficient operation.
The Company’s second goal was to grow despite the economic downturn. Tata Steel focussed on areas within its sphere of influence, communicated honestly and consistently, and negotiated better deals and contracts. Throughout this process, it continued to maintain direct and unambiguous communication with its employees and ensured that its teams stayed motivated.
To counter any effects of the downturn, Tata Steel has undertaken both tactical, or short-term, and strategic measures in order to benefit the organisation in the long run.
