Business Management Assignment: Case Study Analysis of TCS

Question

Task: Purpose:
This business management assignment on case study analysis is an opportunity for students to demonstrate their understanding of unit concepts, apply their knowledge of the theories and unit material learned and develops group based problem solving skills and then apply them to a contemporary multinational entity operating in different markets around the world.

The case study is to be based on a well-known multi-national corporation (MNC). Analyse the selected and approved multi-national corporation’s (MNC) case study in terms of the following key topics:
• Corporate decision making
• Strategy and Globalisation footprint i.e. which markets has the MNC penetrated.
• Organisational Issues
• Human Resources Management, including training and employment relations

Answer

Introduction
According to Agarwal, (2017, p.747) multinational companies relate to the business organisations which function in several countries simultaneously. The emergence of globalisation and technological revolution has prompted organisations to take up internationalisation strategies and function in multiple countries at the same time. The present study is focused on the Indian multinational organisation Tata Consultancy Services (TCS). TCS is a multinational firm that is the member of the Tata group, the largest industrial business group based in India. TCS was established in 1968 and is an information technology company (Tcs.com. 2020). In the present study, the case study of TCS is analysed on the basis of different aspects of the business. The corporate decision-making process within TCS is critically evaluated and strategies that the organisation have taken in order to penetrate international markets are also discussed. The present study highlights various organisational issues that impact on the business performance of TCS. Furthermore, the aspects of Human resource management along with employment relations and training are also included in the study.

Corporate decision making
The impact of globalization on decision making in TCS
As per the explanation of Agarwal, (2016, p.35), corporate decision making relates to the process to identify and choose alternative business strategies and actions on the basis of beliefs, preferences and values. It has been identified that corporate decision making occurs at the different levels of an organization. Decision making in the MNCs is highly influenced by the external as well as internal business environmental factors. According to Singh (2016, p. 264), Globalization plays a significant role in corporate decision making in MNCs. in the present case of TCS, it has been identified that the decision making in the different levels of the organization has been greatly influenced by globalization. The management of different departments, as well as the organizational operations, are influenced highly by the international environmental forces that promote globalization. TCS was facing huge competition in the home market due to the presence of several numbers of multinational organisations. Therefore, competition in the home market was one of the factors that impacted on the decision making of the company to expand into the international markets. On the other hand, the barriers for entry into the international market were very weak for IT business. The low barrier of entry had created an opportunity for TCS to support its geographic expansion strategies as well as product development. However, globalisation not only impacted the expansion strategy in TCS but also influenced the company to manage its human resources and other valuable resources in an appropriate way to make the geographical expansion successful. By the year 2009, the organisation had been able to employ 143000 people under the 142 branches of the company in different countries across the world. For TCS, the major decision making was related to the market to expand for enhancing the growth of its business. The different factors such as the political, economical, technological and cultural factors have played a critical role to support the decision making regarding the business expansion to different market segments as well as the route of entering into the international markets.

Political factors
As per the explanation of Mulloth and Rao, (2017, p.5), political stability is one of the major factors that promote the decision of an organisation to expand its business to a host country. As identified from the case study of TCS the first country in which the Indian MNC expanded is China. One of the major reasons to expand into the Chinese market is higher political stability. Apart from China, the organisation has been able to successfully expand into Brazil, Mexico, and Hungary. The choice of expansion into these countries is also promoted by trade opportunities, political stability, as well as the government support for information technology MNCs.

Economical factors
The economic condition of the host country plays a critical role in the growth and productivity of the MNCs. in the case of TCS, it has been identified that the choice of the host countries like China, Brazil, Mexico, and Hungary was based on the emerging opportunity in their economy. China is a developing country and its market is emerging in nature. Moreover, the tax policies of the host countries had also impacted on the decision making of TCS regarding the choice of the host country to expand internationally.

Technological factors
According to Chakrabortyet al., (2018, p.18), technological development is one of the major factors that are crucial to be considered in order to make a decision regarding the IT companies. In TCS, technological development and technological opportunities were vital while expanding to the other countries. For instance, by 2001 China was able to install approximately 17 million computers which offered an opportunity for MNCs like TCS. Furthermore, the growing use of information technology in different countries in several aspects such as energy, healthcare, telecommunications and utilities are being discovered by TCS. different technological opportunities like green IT and cloud computing are becoming vital in different sectors that can also impact on the decision making of TCS regarding product development in different countries across the world.

Cultural factors
As opined by Shroff and Krishnan (2019, p.62), cultural factors such as organizational culture, diversity, cultural differences are important in corporate decision making in MNCs. In the case of TCS, it has been identified that the role of cultural differences played a vital role in decision making regarding business expansion. Moreover, enabling diversity and inclusion has been one of the core values for TCS for a long time based on which its decision making regarding recruitment has also been changed.

Strategy and Globalisation footprint
Globalization strategy is an important business strategy for the MNCs. According to Kamali (2020, p.381), for an MNC it is important to consider several factors and aspects before making decisions regarding expansion into the global market. Generally, MNCs like TCS choose internationalization strategy based on the three options that are transnational strategy, global strategy and multidomestic strategy. In the case of TCS, it has been identified that MNC applies a global strategy to market its products across different countries in the world. According to Gassmanet al.( 2018, p. 135), a global strategy relates to a business expansion strategy wherein the organizations sacrifice its responsiveness to the requirements of the local markets for emphasizing their abilities. It has been identified that the key elements of the globalization strategy of TCS are its investment strategy and customer-centric organizational structure. Investment in research and development is another core element within the globalization strategy of TCS which helped in identifying the products that are suitable in different geographic markets. Building new capabilities is another element of the strategies implemented by TCS in the light of globalization. In relation to geographic expansion, TCS had initially focused on Asian countries. The presence of TCS in the Asia-pacific region was prominent. TCS was the first Indian IT consulting organization that has established a wholly-owned subsidiary in China for software development. According to Deshmukh and Mukti, (2018, p.860) China could be considered as the biggest untapped market of the Information technology consulting industry that was untapped for a long time by any MNC. The business opportunities for IT consulting in China were a major opportunity of geographic expansion for TCS. Moreover, from the case study, it has been identified that in 2001, there were 17 million computers installed in China that had made the country an important strategic market for TCS.

TCS began its expansion into China and other ASEAN countries in the late 2000s. Furthermore, the organization has also started expansion into Latin America considering the growth and investment opportunities. In order to expand globally, TCS has chosen a number of routes. The strategic acquisition is one of the major routes that TCS utilizes for expanding into the foreign market. According to Fernandeset al., (2019, p.473) a strategic acquisition in the business expansion strategy in which an organization acquires or buys another organization within a similar industry. As per the explanation of Knight et al., (2018, p.10705) the acquisition strategy implemented by TCS can be divided into two categories that are the inorganic means of acquisition and organic means of acquisition. Initial Public Offering (IPO) is another step applied by TCS for prompting its globalization strategy. In 2005, TCS acquired FNS, an Australian Software products firm and in 2006 it acquired Comicron and BPO company based in Chile. Therefore, the strategic acquisition strategy helped TCS to expand into global markets successfully. Apart from that, TCS had also chosen countries like Hungary, Brazil and Mexico for expansion of its products into the global market. As mentioned by Hittet al., (2016, p.70), the global operational units of TCS can be divided into 5 different segments. The globalization strategy of the concerned organization has helped to enhance its growth rate by 40% each year.

Organisational Issues
Business, social and cultural problems in an international setting In the international setting, the huge competition in the IT consulting sector has become one of the major issues for TCS as identified from the case study. From the case study, it has been identified that the company TCS had chosen the globalization strategies based on the high competition in its home market India. However, with the emergence of technological advancements and communication, more organizations in this sector have utilized the globalization strategy. In order to become competitive, TCS had to focus greatly on new product development. Therefore, increased competition has changed the strategies of TCS from market penetration to diversification. The changes in the requirements of the customers are becoming another issue for TCS. With new technologies, the needs of the client organizations are changing day by day. Although TCS applied a customer-centric strategy in its geographical expansion, the social factors like changing demand and complex business environment of the client organizations are impacting on the business of TCS. In recent research conducted by Maranoet al., (2017, p.10442), it has been demonstrated that the culture of the host country has a direct influence on the performance of the MNCs. In relation to the case of TCS, it has been identified that cultural difference is one of the major issues for TCS. The difference in culture could limit the productivity of the business by generating organizational conflicts.

International business and management issues
In relation to the management issues in the international business environment, TCS has faced challenges in communication. According to Gassmannet al., (2018, p.140) connecting with the clients was a serious issue for TCS for many years. There was a lack of focus on communicating with the public with the right message. It has been identified that the development of a strong relationship with the client can be triggered by effective communication. However, due to lack of communication, the organization TCS can be said to perform against its core strategy element, customer-centricity. The lack of understanding among the employees regarding each and every process of TCS is another major issue that was identified in the case of TCS. The technological shift in the IT consulting industry is the biggest business issue for TCS that also impacts on its international business performance. As identified from the case study new business models are being trialled in the IT industry market. These new business models are Cloud Computing and Green IT. Although TCS has trialled this offering in the Indian market replication in the global IT industry market can be difficult due to the difference in the taste and preferences of the clients in the global market.

Possible solutions to a range of stakeholder
The possible solution to the communication challenges faced by TCS is the application of new and innovative communication channels that are generally preferred by client organisations. TCS would be required to identify the popular communication channels in different countries and adopt the communication channels for communicating with clients as well as the public (Chhotrayet al., 2018, p.50). On the other hand, to resolve the issues regarding the new technologies, TCS will have to focus greatly on research and development so that we can meet the demand of its clients. The lack of understanding among the employees regarding the business processes is a major issue that relates to human resource management of TCS. In order to manage employer-related difficulties, organisations have to focus on employee training and development of employee relations that have been discussed in the next section.

Human Resources Management, including training and employment relations
As opined by Nittoor, (2020, p.351) the human resource management leads to the management of people in business organisations and it includes different business functions like workforce planning, recruitment and selection, compensation and benefits management, training and development. In TCS different types of recruitment, methods are used. TCS is identified to conduct an internal search to promote the lower-level employees to higher levels to meet the workforce demand. TCS also makes a partnership with several employment agencies to select talented and skilled employees. Moreover, TCS also directly recruits people through its website. Other different modes of recruitment include a referral from educational institutes and existing employees. However, one of the major disadvantages of the internal search process of recruitment is that the company is unable to acquire new talent from the market. Based on the problems faced by TCS, it has been identified that in order to enhance its performance in the global market, TCS is required to enhance the ability of its employees to understand the purpose of the business and meet the changing demand of the customers. Therefore, training of the employees is one of the core functions of the HR department in TCS.

According to Sharma, (2020, p.3337), diversity and inclusion is the major pillar of TCS that helps it in establishing strong human relations in the workplaces around the world. TCS along with its Human resource management, has promoted diversity and inclusion and developed an inclusive culture in all of its branches. Employee training is highly specialised in TCS. In order to support the training and development opportunities of the employees, TCS highly depends on digital enablement. Digital training is supported by the leaders and self-learning tools are provided to the employees for promoting professional and personal development. TCS is encountering tremendous challenges due to the technological shift in the IT consulting industry. Therefore, the HRM team can further improve the experience of the employees by providing them with training on emerging technologies (Singh, 2016, p.366). TCS ensures to provide a stimulating increment to the global diverse workforce for eating both their professional and personal development. For supporting the training and development of employees TCS has made partnerships with different academic institutions and applied the talent acquisition strategy. The progressive working environment developed by TCS is the major approach of the company to develop strong employment relations with the employees (Tcs.com. 2020). The progressive policies of the company enable its employees to enjoy the benefits of parental leaves, better work-life balance, and flexibility. The mentoring program is also carried out for the junior employees and special leadership development programs are also arranged for the senior employees. The concerned organisation has also taken major steps to include differently-abled individuals into its workforce.

Conclusion
From the above analysis of the case study of the Indian MNC TCS, it has been identified that there are different external environmental factors that impact on the decision making of the emergency regarding expansion. Political, economic, cultural, and technological factors have impacted on the decision-making process of TCS for choosing a country to expand its business. TCS has expanded its business through IPO and acquisition strategy into the market of China, Brazil, Australia, Mexico, and Hungary. However, the company has faced a number of challenges relating to communication, technological shift, and the inability of the employees to meet the demand of the customers. Moreover, the study has also identified the HRM strategy of TCS with a focus on training and employment relations.

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