Management at Tata Steel
Founded in 1868, by Jamsetji Nusserwanji ,Tata the Tata Group is a global business conglomerate operating in over 100 countries across 5 continents. His strong sense of values and spirit of innovation and entrepreneurship are a legacy that continues to guide Tata companies till date. He had four goals in life: setting up an iron and steel company, a world-class learning institution, a unique hotel and a hydro-electric plant. Only the hotel became a reality during his lifetime, with the inauguration of the Taj Mahal Hotel at Colaba waterfront in Mumbai on 3 December 1903 at the cost of 11 million (worth 11 billion in 2015 prices). At that time it was the only hotel in India to have electricity. He believed that satisfied workers create satisfied workforce and in lieu to this principle he paid all his workers gratuity, provident fund well before it was made mandatory. His management skills were clearly evident when minute details were chalked in planning and building the entire city of Jamshedpur. The values and principles that have governed the business for a century are enshrined in the Tata Code of Conduct (TCOC). From an early foray into steel and automobiles, to staying abreast of the latest technologies, the Tata Group today has 29 publicly-listed Tata enterprises, which include Tata Steel, Tata Motors, Tata Consultancy Services, Tata Power, Tata Chemicals, Tata Global Beverages, Tata Teleservices, Titan, Tata Communications and Indian Hotels. The group has a combined market capitalisation of around $103.51bn (2016-17). Tata has a strong sense of social responsibility. They balance economic prosperity, environmental responsibility and social benefits for the community. In India, they are a partner in progress with Odisha, and believe in taking its stakeholders forward in its journey of growth. Tata Steel Thailand is one of the first 30 companies that joined UNICEF in Child Friendly Business in “The Children Sustainability Forum” to make a commitment in protecting children's rights. Tata Steel Europe's Community Partnership Programme- ‘Future Generations’, with sub-themes of education, environment, health and Well-being works across the UK, assisting job and wealth creation by supporting small and medium businesses with finance and business premises. They also play a constructive role in addressing climate change – both by reducing carbon footprint, and by creating high performance steels that lead to fuel-efficient vehicles and energy-efficient buildings. Their Environmental Management Systems meet the ISO 14001 standards at all of their main manufacturing sites. Shaped by a lineage of sound and straightforward business principles, the Tata Group is built on a foundation of trust and transparency. Building such huge enterprises, sustaining and running them profitably are possible only through effective and efficient management and co-ordination at all levels.
“He believed that satisfied workers create satisfied workforce and in lieu to this principle he paid all his workers gratuity, provident fund well before it was made mandatory”. The management principle highlighted in the statement is:
Answer & explanation
Correct answer: option 2
The correct answer is Option (2) → Remuneration
Option (1) Order — Incorrect. The principle of order means ‘a place for everything and everyone, and everything and everyone in its place’. It has nothing to do with pay.
Option (2) Remuneration — Correct. Fayol’s principle of remuneration of employees says that pay must be fair to both the employees and the organisation. It should give workers at least a reasonable standard of living. By paying gratuity and provident fund before the law made them compulsory, Tata gave his workers fair and generous pay, in the belief that satisfied workers create a satisfied workforce.
Option (3) Unity of command — Incorrect. This principle says that each employee should receive orders from one boss only. It is about orders, not pay.
Option (4) Stability of tenure of personnel — Incorrect. This principle is about keeping employee turnover low. Good benefits may make workers stay longer, but the statement is about how the workers were paid, not how long they stayed.
Note 1: The passage is the NCERT case study ‘Management at Tata Steel’, which has been reproduced by NTA in the exam. Note 2: The passage prints ‘in lieu to this principle’, where it should read ‘in line with this principle’; ‘in lieu of’ means ‘instead of’. The slip is NCERT’s own, and NTA copies lines from NCERT word for word, even where the book is wrong. Note 3: The case study is taken from the chapter ‘Nature and Significance of Management’, but this question is based on the chapter ‘Principles of Management’. However, since it is a case-study based question, all the questions on this case study are tagged to the chapter the case study is taken from. NCERT (2026-27 Edition): “Management at Tata Steel … He believed that satisfied workers create satisfied workers and in lieu to this principle he paid all his workers gratuity, provident fund well before it was made mandatory. …” “(vii) Remuneration of Employees: The overall pay and compensation should be fair to both employees and the organisation. The employees should be paid fair wages, which should give them at least a reasonable standard of living. …” |