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Global HR Competencies
Mastering Competitive Value from the Outside-In
By DAVE ULRICH, Wayne Brockbank, Jon Younger, Mike Ulrich
The McGraw-Hill Companies, Inc.Copyright © 2013Dave Ulrich, Wayne Brockbank, Jon Younger, and Mike Ulrich
All rights reserved.
OVERVIEW AND LOGIC
This book focuses on the competencies and practices that characterize high-performing HR professionals and businesses. We address this issue on both a global and a multiregional scale. That is, several chapters focus on the HR world as a whole. Others focus on specific parts of the world: Africa, Australia and New Zealand, China, Europe, India, Latin America, the Middle East, North America, and Turkey. These chapters examine conditions in each region or country, discussing their implications for business in general and for HR practices in particular. The common point of reference for each chapter is the Human Resource Competency Study (HRCS), which is the world's longest ongoing research on HR competencies and practices. It has generated the largest data set on these issues, considered both globally and on a regional basis.
Tata Group: HR Competencies in Action
The Tata Group, headquartered in Mumbai, India, is the wealthiest conglomerate in India, with 424,365 employees and annual revenues of US$83.3 billion. In 2009, the Reputation Institute ranked it as the eleventh most reputable company in the world. It is an ideal experience to open this book because it has been remarkably effective at balancing complex paradoxes: diversification versus integration, global versus local, economic performance versus social contributions, family legacy versus professional management, and competing through scale versus innovation. It is a role model for any company coping with the contradictions of the twenty-first century. It is also an example of how HR helps confront the organizational challenges inherent in modern life.
The Tata Group consists of 95 companies in seven business sectors: information technology and communications, engineering projects and services, steel and other materials, services (including five-star hotels and life insurance), energy, consumer products, and chemicals. Thus, it is one of the world's most diversified conglomerates. Despite this diversification, it also works to find ways to use commonalities to enhance efficiencies, distribute best practices, provide more unified customer-facing experiences, and sustain the powerful Tata brand.
In 1991, Rajan Tata became chairman of Tata. At that time about 5 percent of Tata's revenue came from outside India. Today about 66 percent of its revenue is from outside the country. This remarkable expansion has come about through a combination of organic growth (as with Tata Consulting Services) and acquisitions (as with Tata Automotive). From 2004 to 2011, Tata acquired almost seven companies per year on average. The most visible of these was Jaguar-Land Rover, acquired in 2008 for US$2.3 billion. In the midst of such growth, Tata works diligently to retain local leadership and line talent. It has gained a reputation for working closely with local government, union, and community leaders to ensure that its acquisitions result in a win-win situation for all stakeholders. Tata managers seek to connect to the society and environment in which they operate.
A noteworthy aspect of Tata is the manner in which it balances its economic and social performance. Its vigorous and sustained financial performance and work ethos are well known. Tata is also strongly committed to improving the quality of life in the communities it serves, building community schools and clinics, founding and supporting universities and institutes, providing scholarships to underprivileged but high-potential students, and helping fund dozens of nongovernmental organizations (NGOs). This philanthropic orientation is not just embedded in its collective psyche, it is also embedded in the ownership structure that was established by the founding father of Tata.
In emerging economies, privately held firms tend to be dominated by individual families. For many years Tata's senior management came from the Tata family, but the Tata board has recently appointed someone from outside the family, Cyrus P. Mistry, as deputy chairman and heir apparent to the position of chairman. He was thoroughly vetted by the board as someone who has an outstanding academic background, has participated effectively on the boards of several other companies, is insightful about the future of business in India, has a vision of the global economy, is humble, and has the values necessary to run the Tata group.
Economy and Innovation in Tata
Tata does a remarkable job at competing on the bases of both scale and of innovation. Given India's large population and high rate of poverty, it is not surprising that the "wealth at the bottom of the pyramid" concept would originate there. Within this environment, Tata has mastered scale and disciplined cost control as exemplified by the US$2,500 car, the Nano. At the same time, the company's history reveals a hotbed of innovation.
1893: The invention of ring spindles for textile manufacturing
1902: India's first luxury hotel (the Taj Mahal)
1932: India's first airline
And Tata's legacy of innovation continues today.
1995: India's first branded jewelry
2002: The world's slimmest designer watch
2007: India's first teraflop supercomputer
2008: India's first full-length 3-D animated film
Because of Tata's ability to maneuver through such paradoxes, Bloomberg Businessweek has rated it sixth among the world's most innovative companies, right behind Apple, Google, Toyota, GE, and Microsoft.
HR in Tata
Tata's HR practices play important roles in its success. Some of the impact of HR has been directly through HR professionals and departments; some has been through the partnership of HR with senior executives who help set the tone and direction of the companies' HR policies.
From the beginning, Tata's founders, Jameset Tata and his son Dorab, recognized that the company's ability to achieve its potential depended heavily on its ability to recruit the best talent. In the company's early years, they established the India Institute of Science. This early investment in human capability has been followed by the Tata Institute of Fundamental Research, the Tata Institute of Social Sciences, the JRD Tata Ecotechnology Centre, the Energy and Resources Institute, and many others.
From Tata's inception, balancing economic success with a nascent expression of corporate social responsibility became the company's norm. For example, in 1932 Dorab placed nearly all of his personal wealth in a trust that now accounts for 66 percent of the Tata Group's ownership. The Tata Trust was created to give back to the community with a mandate to be used "without any distinction of place, nationality or creed." As stated by Satish Pradhan, executive vice president of HR, "We have to be profitable but we go beyond. The purpose of our business is to give back to the community. This is a basic value."
This quality is reinforced by HR practices, including the recruitment of people who embrace this legacy and by implicitly evaluating people on both "talking the talk and walking the talk." In addition, Tata conducts Tata Administrative Service (TAS), a comprehensive developmental program for 25 to 30 of Tata's high-potential employees. Offered annually, it includes a three-month stint in rural areas where participants undertake community-improvement initiatives. They return with a greater appreciation of Tata's social values and the social relevance of economic success.
The various Tata companies share a dominant HR logic. Line managers and HR executives jointly identify key industry trends and t
Excerpted from Global HR Competencies by DAVE ULRICH, Wayne Brockbank, Jon Younger, Mike Ulrich. Copyright © 2013 by Dave Ulrich, Wayne Brockbank, Jon Younger, and Mike Ulrich. Excerpted by permission of The McGraw-Hill Companies, Inc..
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