Transcript
TATA GROUPReport
Submitted To:
MR.MUBASHIR MALIK
Submitted By:
RAMEEZ SHAHID
&
MASOOD SADIQ
Department of Business
Administration
UNIVERSITY OF LAHORE
LAHORE
Introduction:
The Tata Group (Hindi: टा�टा� समू�ह) is a multinational conglomerate company
headquartered in Mumbai, India. In terms of market capitalization and revenues, Tata
Group is the largest private corporate group in India and has been recognized as one of
the most respected companies in the world.[3][4] It has interests in steel, automobiles,
information technology, communication, power, tea and hospitality. The
Tata Group has operations in more than 85 countries across six continents and its
companies export products and services to 80 nations. The Tata Group comprises 114
companies and subsidiaries in seven business sectors [5], 27 of which are publicly listed.
65.8% of the ownership of Tata Group is held in charitable trusts.[6] Companies which
form a major part of the group include Tata Steel, Corus Steel, Tata Motors,
Tata Consultancy Services, Tata Technologies, Tata Tea, Titan
Industries, Tata Power, Tata Communications, Tata Teleservices and the
Taj Hotels.The group takes the name of its founder, Jamsedji Tata, a
member of whose family has almost invariably been the chairman of
the group. The current chairman of the Tata group is Ratan Tata, who
took over from J. R. D. Tata in 1991 and is currently one of the major
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international business figures in the age of globality.[7] The company is
currently in its fifth generation of family stewardship. [8]The 2009
annual survey by the Reputation Institute ranked Tata Group as the
11th most reputable company in the world.[9] The survey included 600
global
Brief History:
The foundation of what would grow to become the Tata Group was laid
in 1868 by Jamsetji Nusserwanji Tata — then a 29-year-old who had
learned the ropes of business while working in his father’s banking firm
— when he established a trading Company in Bombay. A visionary
entrepreneur, an avowed nationalist and a committed philanthropist,
Jamsetji Tata helped pave the path to industrialization in India by
seeding Pioneering businesses in sectors such as steel, energy, textiles
and hospitality Empress Mills, a textiles venture set up in Nagpur in
central India in 1877, was the first of the big industrial projects
undertaken by the Tata Group. Jamsetji Tata was by this time, though,
already gripped by what would the three great ideas of his life: setting
up an iron and steel company, generating hydroelectric power and
creating an institution that would tutor Indians in the sciences None of
these ideas would come to fruition while Jamsetji Tata lived, but they
were realized in full measure by those who followed him. he most
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dazzling of the Tata enterprises that came into being during Jamsetj
Tata’s lifetime was the Taj Mahal Hotel in Bombay, which opened for
business in 903. Legend has it that Jamsetji Tata set his mind on
building it after being denied entry into one of the city's fancy hotels
for being an Indian today, the Taj Group of Hotels is a byword for
luxury and quality, with standout Properties across the world the most
dazzling of the Tata enterprises that came into being during Jamsetji
Tata’s lifetime was the Taj Mahal Hotel in Bombay, which opened for
business in 1903. Legend has it that Jamsetji Tata set his mind on
building it after being denied entry into one of the city's fancy hotels
for being an Indian Today, the Taj Group of Hotels is a byword for
luxury and quality, with standout Properties across the world In 1911,
seven years after his death, Jamsetji Tata’s long-cherished dream of
Establishing an institution where Indians could cultivate their scientific
temper was realized. The Indian Institute of Science, set up in
Bangalore, would nurture some of the brightest minds in India. In 1911,
seven years after his death, Jamsetji Tata’s long-cherished dream of
Establishing an institution where Indians could cultivate their scientific
temper was realized. The Indian Institute of Science, set up
in Bangalore, would nurture some of The brightest minds in India It was
the first of a clutch of centers of learning and research that would
come up with the substantial and steadfast support of the Tata Group
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It was the first of a clutch of centers of learning and research that
would come up with the substantial and steadfast support of the Tata
Group.
Tata products and services for consumers
Agriculture Appliances Automobiles
Beverages Charter flights Crockery
DTH television Financial services Food
Holiday homes Hotels Housing
Jewellery Leather Retail
Solar appliances Telecommunications Watches and clocks
1-Corporate Social Responsibility Objective and
Measure:
Tata Power is committed to setting high standards in its pursuit of
social responsibility and remaining sensitive to the issues of resource
Conservation, environment protection and enrichment and
Development of local communities in its areas of operations. The
company has a simple philosophy that guides its activities in these
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matters, “Giving back is a means towards going ahead”. Our
widespread programmers on biodiversity conservation, a forestation,
Pisciculture, family planning, health services, primary and secondary
education and many more have made inroads into the tiny hamlets
and tribal regions of our Hydro catchments areas and it is our
endeavor to light up these dark and narrow Streets to new dawns.
The mission of the Tata Technologies Corporate Social Responsibility
program is to make a positive impact on the communities in which the
company does business through its support of select programs,
outreach efforts and initiatives that improve and enhance the quality of
life. Our goal is to make things better for the planet, better for people,
better for business, better now, better for the future. Tata
Technologies: BETTER & BETTER™
Community Network Services
Macomb Homeless Coalition
Environmental Stewardship
Susan G. Komen for the Cure
Singapore Student Project on Racial Harmony
Asia Pacific Blood Donor Drive
Road Safety in India
First Book
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Mount Saint Vincent
Coats for Colorado
Cyber Safety
a) Community Network Services:
Community Network Services Inc. (CNS) is a private, non-profit human
agency that provides comprehensive health and social services to
nearly 3,000 individuals in Oakland County, Michigan, home of the Tata
Technologies North American Headquarters facility. Tata Technologies
participates in the annual “Adopt-a-Family” program in the months of
November and December, to coincide with the Christmas holiday
season in the United States. Professionals collect funds, shop for and
wrap gifts for underprivileged families seeking help through CNS. The
gifts and contributions are traditionally presented at the Tata
Technologies Holiday Luncheon in December in Novi. To learn more
about Community Network Services, including how to volunteer time or
donate funds
b)Macomb Homeless Coalition:
The Macomb Homeless Coalition (MHC) is an umbrella association of
providers of shelter and supportive services in Macomb County,
Michigan, a community neighboring the Tata Technologies North
American Headquarters facility. Two annual efforts on behalf of MHC
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are the focus of Tata Technologies: Homeless Connection Day – Held
each January to help needy individuals find housing, employment,
food, clothing, health care and emergency shelter. Tata Technologies
professionals volunteer time, technical support and computers on-site
as resources throughout the event. Warming Center Support –
Throughout each winter, MHC coordinates temporary shelter with
warming centers at local churches and community centers. Tata
Technologies supports this effort through the collection of funds and
personal care items including socks and bedding. To learn more about
MHC and to support its effort
c)Environmental Stewardship:
Here days, 60 miles, countless blisters and thousands of dollars. That’s
the bottom line for Tata Technologies professionals who participate
every year in the Breast Cancer 3-Day event in metropolitan Detroit,
benefiting Susan G. Komen for the Cure and the National Philanthropic
Trust Breast Cancer Fund. The Tata Technologies team - professionals,
their friends and family members - raised more than $15,000 in
metropolitan Detroit over the past two years. Participating teams walk
60 miles over a long weekend, supported by community volunteers
who provide overnight camping facilities in bright pink tents, hot
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meals, showers, entertainment, safety, medical support and, most
importantly, encouragement. To learn more about the 3 Day and
Susan G. Komen for the Cur
d)Susan G. Komen for the Cure:
Three days, 60 miles, countless blisters and thousands of dollars.
That’s the bottom line for Tata Technologies professionals who
participate every year in the Breast Cancer 3-Day event in
metropolitan Detroit, benefiting Susan G. Komen for the Cure and the
National Philanthropic Trust Breast Cancer Fund. The Tata
Technologies team - professionals, their friends and family members -
raised more than $15,000 in metropolitan Detroit over the past two
years. Participating teams walk 60 miles over a long weekend,
supported by community volunteers who provide overnight camping
facilities in bright pink tents, hot meals, showers, entertainment,
safety, medical support and, most importantly, encouragement. To
learn more about the 3 Day and Susan G. Komen for the Cur
e)Singapore Student Project on Racial Harmony:
Singapore is well-known for its multi-racial, multi-religious society.
While ethnic Chinese are the largest group, the country’s population
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includes significant communities of ethnic Malays, Indians, Eurasians
and others. Tata Technologies was pleased to have the opportunity to
support and promote cultural tolerance by sponsoring a two-day camp
for upper primary students from every race, tagged “Search Those
Roots!” During the March 2008 program, children were given hands-on
opportunities to learn more about one another’s cultures, languages,
religious practices, pastimes and even favorite foods. The event was
conceived and organized by a group of senior high school students as
part of their own Leadership Development Program.
f)Asia Pacific Blood Donor Drive:
Tata Technologies encourages its professionals to participate in various
social events organized by non-profit organizations, non-governmental
Organizations (NGOs) and charitable institutions that contribute to the
social good. In keeping with this spirit, Tata Technologies organizes
blood donation camps at its Center for Advanced Engineering and
Design in Hinjawadi, Pine; at Tata Motors, Pimpri; and at other
locations throughout India and the Asia Pacific region.
g)Road Safety in India:
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Safety Ryodan in India and the Asia Pacific region has conducted
special Road Safety Drives in support of festivals and special events.
The Road Safety Drives have focused on traffic and pedestrian
management involving up to 100 volunteers - as well as a street play
campaign involving up to 10 volunteers targeting youngsters. More
than 100 volunteers from Tata Technologies went through a volunteer
training program conducted by the local traffic department that
provided key insights on traffic and
h)First Book:
The Tata group encourages its group companies to support First Book,
a non-profit organization with a single mission: to give children from
low-income families the opportunity to read and own their first new
books. First Book provides an ongoing supply of new books to children
participating in community-based mentoring, tutoring, and family
literacy programs. Founded in 1992, the First Book model was
developed to leverage the work of local heroes who reach children
through existing literacy programs in a variety of settings, such as
Head Start centers, libraries, soup kitchens, churches, housing
projects, and after school initiatives. To learn more, or to get involved
i)Mount Saint Vincent:
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Since 2001, Tata Technologies has hosted a variety of events year-
round for the children of Mount Saint Vincent’s, based in Denver,
Colorado, U.S. and founded in 1883 by the Sisters of Charity of
Leavenworth as an orphanage. One very special event is the Annual
Christmas Party sponsored by the company and very generous staff
donations of money and time to put on a great party, sometimes the
only Christmas these children experience.
In 2005, Tata Technologies donated funding for the contents of an
entire classroom at the new school that was being built, and Tata
Technologies professionals consistently volunteer on boards and with
other activities at the school. Mount Saint Vincent is currently a
residential and day treatment center for boys and girls, ages five to
fourteen and in 1997 it began to offer services for children as young as
three. To learn more about Mount Saint Vincent
j)Coats for Colorado:
This past winter, Tata Technologies professionals initiated a campaign
to be part of a local-to-Colorado, U.S. non-profit coat drive. In
conjunction with Dependable Cleaners and KMGH-TV, a local news
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station, Tata Technologies professionals dug deep into the closet and
donated dozens of coats for people in need throughout Colorado. Coats
for Colorado is believed to be the U.S.'s largest per capita coat drive.
Since the program's inception in 1982, over 1.5 million coats have
been distributed, and last year, more than 80,000 coats were donated
to people and non-profit organizations in need. For more information
k) Cyber Safety:
TATA Technologies was actively involved in "Cyber Safe Pine 2009" a
three-day awareness campaign on cyber safety and security issues for
clients, industry, academia, and other stakeholders. The campaign
addressed issues of information security, cyber crime, cyber security,
best practices and preventive measures. The National Association of
Software and Services Companies - Data Security Council of India
(NASSCOM - DSCI) organized the campaign under the Cyber Security
project sponsored by the Department of Information Technology,
Ministry of Communications & Information Technology, and
Government of India. The program is part of a larger "Trusted
Sourcing" initiative to strengthen India's regulatory framework and
reinforce India's appeal as an outsourcing destination.
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Tata Steel Benchmark in Corporate Social
Responsibility
Jamshedpur: A study on 'Benchmarking Corporate Social Responsibility
Activities', by the Gas Authority of India Limited (GAIL), finds Tata Steel
creating a benchmark in corporate social responsibility (CSR). The
study has been based on 'Organization Dynamics'. The purpose of the
study was to identify the best practices in CSR activities available in
Tata Steel, and to enable GAIL to undertake the interventions more
effectively and in a more focused manner. Tata Steel is a pioneer in
the concept of CSR. It believes that the loyalty and commitment of its
employees depend upon the quality of life they are provided with at
work and at home. Consistent with the group purpose, Tata Steel has
declared in its vision statement that it will constantly strive to improve
the quality of life of the communities it serves through excellence in all
facets of its activities. The company has received a number of awards
in recognition of its CSR efforts. The most recent testimony to Tata
Steel's contribution is The Energy & Resources Institute (TERI) Award
conferred on it in recognition of corporate leadership for good
corporate citizenship and sustainable initiatives. Tata Steel is the only
Indian company to have pledged to translate the Global Compact
principles on human rights, labor and environment into practice. It was
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conferred the Global Business Coalition Award for Business Excellence
in the Community for HIV /AIDS. Over the years, the nature of the
company's involvement with the community has undergone a change.
It has moved away from charity and dependence, to empowerment
and partnership. The many facets of Tata Steel's efforts are medical
and health services in the rural and semi-urban areas, sports, women's
health and education, water harvesting and tribal development, relief
and rehabilitate.
2-CORPORATE Social Responsibility Strategy
and Resources Implication:
Tata strategy management Group:
Tracking the Customer’s Need
In order to achieve higher profitability and market share, companies
should adopt a needs-centric marketing approach and design marketing
initiatives, product offerings and services around customer needs, say
Harsha Kapoor, practice head, analytics, and Rituparna Dasgupta,
associate consultant, of Tata Strategic Management Group. The market
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place evolves constantly and keeping abreast of changes and pleasing the
customer Becomes a huge challenge for companies. Add to this the fact
that customers today are more Knowledgeable, conscious and
demanding, and it is easy to see why traditional marketing approaches
Centered around products, campaigns and a supply Chain are proving
to be inadequate in achieving the Strategic goals of companies. In
today’s market, a ‘one size fits all’ approach will show considerable
shortfalls. When products are not aligned to customer needs, it results
in wasteful marketing expenditure, accompanied by low conversions
and early attrition, due to incorrect targeting. Companies would do
Much better to use needs-centric marketing approach (NCMA) that helps
in increasing market share and revenue. NCMA involves deriving
customer insights, identifying customer segments, prioritization and
selection of customer segments, and identifying the right marketing mix
to meet their needs to enhance business performance and the company’s
objectives.
Identify Customer Needs:
The first step is to segment customers into Homogeneous groups based on
their needs and buying Behavior. A myth in the mindset of most Indian
Companies is that demographic data is a necessity for Meaningful
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segmentation. In fact, demographic Segmentation might be misleading
at times as it could be possible that the needs of a 25-year-old
customer are the same as that of a 50-year-old. By using NCMA,
all customers with similar needs and buying behavior would belong to
the same group. This would enable companies to first identify varying
clusters of needs and then address them differently.
Example 1: A leading provider of telecom services in India wanted to
increase revenues by launching a new range of value-added services.
They deployed a product-centric marketing approach wherein they
Targeted subscribers in the age group of 25-35 years. However,
response rates were much lower than expected. To the company’s
surprise, there was a sizeable number of enquiries from subscribers
who were not in the target age group. The management was quick to
realize that they were selling the product to the wrong subscribers and
thereby missing out a large number of potential customers. A careful
analysis of their customer call database revealed the distinct calling
patterns of subscribers. Now, the company has segmented their
subscribers into different groups based on their calling patterns and
needs, rather than demographics. Each segment represents unique
calling behavior and subscriber preferences. Coupled with external
data, segment insights help the company identify subscribers who
actually have a need for the new product.
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Example 2: A financial services provider in India wanted to increase
market share by improving its renewal business and cross-selling
strategy. Analysis of historical transactional data helped identify
investors’ behavioral patterns and financial needs. Focus group
discussions with relationship managers and intermediaries further
strengthened the results of the analysis. The company segmented its
investors on the basis of their needs rather than on demographic
criteria like geography and age profile. Each investor segment
Represented a preferred investment portfolio along with a set of
expectations from the financial services provider. Such investor
insights served as building blocks for a strong needs-centric marketing
strategy. Thereafter, the company was able to target the right investors with
the right product offering through the right intermediaries. It achieved
a competitive advantage over other players by adopting NCMA rather
than the traditional demography-based targeting approaches.
Assess potential and choose segments:
Once customers are segmented and their needs identified, the next
step is to assess their growth potential. A particular segment might be
currently small in size, but might have immense growth potential
depending on the influence of mega trends like digitization,
globalization, etc. Evolution of new technologies might radically alter
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the growth of certain segments. Based on the growth potential,
customer segments can be evaluated and prioritized so that a
selection can be made for focused attention. Example: A European
food and grocery retailer studied the impact of market and macro-
economic trends on its customer segments. It broke the mega trends
in consumer trends and derived the implications for each segment.
New living conditions and technology developments were expected to
Influence customer buying behavior and preferences, leading to new
needs. With trends towards a more demanding work environment and a
stressful lifestyle, the health-conscious segment and the easy usage
and convenience segments were expected to witness sizeable growth.
The retailer took into consideration the growth potential, competitive
intensity, strategic fit feasibility to serve and profitability to priorities
and choose segments for core and secondary focus.
Meeting customer needs:
Once target groups have been identified, meeting their needs effectively
becomes the challenge. Segment- specific initiatives or actions need to be
designed as customer needs are different for different segments. A
particular segment might be price-sensitive whereas another might be
willing to pay for quality. Identifying the right marketing mix for each
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segment becomes crucial. The marketing mix would spell out the right
pricing, the right product, the right place and the right promotion
strategy that would optimize the return on marketing investment.
Example 1: A leading Indian automobile manufacturer aiming to
increase market share identified its customer needs and growth
potential. However, the challenge was to target them effectively.
A thorough diagnosis of the company’s marketing and selling
Processes revealed that the dealers were not communicating to the
customers correctly. Often the product met customers’ needs but this
was not conveyed effectively by the dealer. The company worked on
the communication aspect and organized an extensive training
programmed for dealers. Communication improved significantly and so
did the results.
Example 2: A European retailer had developed a unique customer
segment — one that bought pet food and accessories along with party
festival items. They noticed that purchase of disposable plates, glasses
and decorative items for Christmas / Halloween parties drove the sales
of pet accessories and pet food. This implied that customers belonging
to this particular segment would generally pick up an item for their
pets as and when they shopped for a party. This insight helped the
retailer redesign its store pangram and it reported increased revenue
by displaying pet accessories and pet food near party items.
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Benefits of NCMA
NCMA’s numerous benefits, in itself as well as compared to other
traditional marketing approaches, are outlined below: Creates better
understanding of customer needs, preferences and factors influencing
Customer purchase decisions. Establishes a one-to-one relationship
with the customer for a more personalized customer experience.
Enables development of products or service offerings that the
customer needs or prefers to buy. Increases market share and revenue
by serving customers with products aligned to their needs. Saves
wasteful marketing expenditure on customers who don’t have a need
for certain products. A needs-centric marketing approach is feasible in
the Indian context. It enables a company to use customer insights to
identify and effectively target segments based on needs. This can
enhance market share and / or lower spending and potentially redefine
market leadership rankings. In the current competitive climate, NCMA
can provide the crucial edge to outperform other players.
IMPLICATIONS
The accumulation of acquisition opportunities risks derailing the focus
on the core business. In 2003, Ratan Tata first mentioned his dream of
building a INR 100,000 (about US $2,500) car– the cheapest, by far,
ever made. If the Nano is a success when it goes on sale in the second
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half of 2008, it will herald the emergence of Tata Motors on the global
auto scene, mark the advent of India as a global centre for small-car
production and represent a victory for those who advocate making
cheap goods for potential customers at the 'bottom of the pyramid' in
Emerging markets. With this background, it is not surprising that
pundits rumbled in summer 2007 when Tata Motors joined the bidding
for two of the world’s most luxurious brands, UK-based Jaguar and
Land Rovers. 44 In short, the question is whether winning trophy
brands is a correct strategy when the ultimate objective is to gain the
appropriate production scale and technology to be the world’s lowest-
cost car producer. Second, integration issues are responsible for the
relatively high failure rate of international M&As (Bruner 2005). 45 The
2006/07 annual report of VSNL lists integrating acquisitions, managing
operations in diverse international locations and changes in the local
regulations as critical risks for the success of the company’s plans. The
Tata companies have tried to develop an ability to understand the
culture of the country where the acquisition takes place, as well as the
Working environment in that country, as a strategic tool for skilful
handling of post-merger issues. In the recent Chorus combine, a
Strategic and Integration Committee (SIC) chaired by Ratan Tata has
been formed to facilitate integration and create a virtual organization
across the combined businesses. The obvious paradox is that the
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emphasis on collaboration rather than controlling as the adaptive
model may make it more difficult to keep the distinctiveness of the
Tata Equity Brand. In fact a crucial issue being debated within Tata is
To what extent a group strategy, including a country-specific one, is
needed to maintain a modicum of coherence. In South Africa and, to a
Lesser extent, Bangladesh, Tata seems to be looking at opportunities
for diversification into prima facie unrelated businesses along the lines
of the home country trajectory nothing like this is in the United
Kingdom, although no fewer than 18 Tata companies operate there
and generate US $1.6 billion in sales in 2006-07. 48 Although not
explicitly stated, the reason may be that conglomeration has
advantages in a developing country context and not in an industrial
one – despite the difficulties that Tata faces in Bangladesh for political
reasons. In keeping with its commitment to societal responsibilities, the
Tata Group has been actively involved in initiatives that promote the
social and economic development of host countries. The United
Nations’ Global Compact has emerged as a key instrument to adopt
common principles in the areas of human rights, labor standards, the
environment and anti-corruption. All the 10 principles of the UN Global
Compact are incorporated in the Tata Code of Conduct. 50 Tata Steel is
a founder member of the Global Compact and also been conferred the
Global Compact Business Coalition Award for Business Excellence in
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the Community in recognition of its pioneering work in the field of HIV-
AIDS awareness. The city of Jamshedpur is one among six in the world
to be chosen to participate in the UN Global Compact Cities Pilot
Program. Tata Steel Managing Director B Muthuraman sits on the 20-
member the Board of the Global Compact. Tata Motors has formulated
in 2005 specific policies on Human Rights, as enunciated by
International Labors Organization. There are also policies on Equal
Opportunity, Non-Discrimination in Employment and Sexual
Harassment. The Adult Literacy Project is in South Africa of particular
interest insofar as the community development program is adapted
from TCS’s computer-based functional literacy initiative that was
implemented in India. The project was replicated in the North Sotho
(Sepedi) language in partnership with the WDB Trust, an organization
that works in the areas of micro finance, entrepreneur training and
education of impoverished rural women. The initiative has so far
trained 65 people to read, with plans to introduce more languages to
the program and thus increase its reach. Other synergies have been
created in a skills-development program in rural South Africa
developed by Tata Africa and Kabana, an organization set up by the
Ministry for Minerals and Energy in partnership with Harmony Gold and
Mintek (the South African R&D center for minerals technology). As part
of the program, trainees traveled to India where they were trained in
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jewelry making at the Titan plant in Bangalore and in decorating
Ceramic ware at Tata Ceramics in Kochi.An additional problem is lack
of recognition and the ever-lingering risk that an Indian company is
treated as a sub-standard entity. 51 Again, various Tata companies
have started post-merger integration by bringing the board of the
acquired foreign companies to India to show them the new owners’
facilities. 52 As part of the drive to get the group’s message across,
the group is also opening offices in key countries.
3-Timetable for Implementation:
1868
Jamsetji Nusserwanji Tata starts a private trading firm, laying the
foundation of the Tata group.
1874
The Central India Spinning, Weaving and Manufacturing Company is
set up, marking the group's entry into textiles and its first large-scale
industrial venture.
1902
The Indian Hotels Company is incorporated to set up the Taj Mahal
Palace and Tower, India's first luxury hotel, which opened in 1903.
1907
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The Tata Iron and Steel Company (now Tata Steel) is established to
Set up India's first iron and steel plant in Jamshedpur. The plant started
production in 1912. Sets up its first office overseas, Tata Limited in
London.
1910
The first of the three Tata Electric Companies, The Tata Hydro-Electric
Power Supply Company is set up. The second, Andhra Valley Power
Supply Company was established in 1917 and Tata Power in 1919. The
first two companies were merged with Tata Power in 2000 to form a
single entity.
1911
The Indian Institute of Science is established in Bangalore to serve as a
centre for advanced learning.
1912
Tata Steel introduces eight-hour working days, well before such a
system was implemented by law in much of the West.
1917
The Tatas enter the consumer goods industry, with the Tata Oil Mills
Company being established to make soaps, detergents and cooking
oils. The company was sold to Hindustan Lever (now Unilever) in 1984.
1932
Tata Airlines, a division of Tata Sons, is established, opening up the
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aviation sector in India. Air India was nationalized in 1953.
1939
Tata Chemicals, now the largest producer of soda ash in the country, is
established.
1945
Tata Engineering and Locomotive Company (renamed Tata Motors in
2003) is established to manufacture locomotive and engineering
products.Tata Industries is created for the promotion and development
of hi-tech industries.
1952
Jawaharlal Nehru, India's first Prime Minister, requests the group to
manufacture cosmetics in India, leading to the setting up of Lakme.
The company was sold to Hindustan Lever (now Unilever) in 1997.
1954
India's major marketing, engineering and manufacturing organization,
Volta’s, is established.
1962
Tata Findlay (now Tata Tea), one of the largest tea producers, is
Established.Tata Exports is established. Today the company, renamed
Tata International, is one of the leading export houses in India.
1968
Tata Consultancy Services (TCS), India's first software services
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company, is established as a division of Tata Sons.
1971
Tata Precision Industries, the first Tata Company in Singapore, is
founded to design and manufacture precision engineering products.
1984
The first 500 MW thermal power unit at the Tomboy station of the Tata
Electric Companies is commissioned.
1995
Tata Quality Management Services institutes the JRD QV Award,
modeled on the Malcolm Baldrige National Quality Value Award of the
United States, laying the foundation of the Tata Business Excellence
Model.
1996
Tata Teleservices (TTSL) is established to spearhead the group's foray
into the telecom sector.
1998
Tata Indica — India's first indigenously designed and manufactured car
— is launched by Tata Motors, spearheading the group's entry into the
passenger car segment.
1999
The new Tata group corporate mark and logo are launched.
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2000
Tata Tea acquires the Tetley group, UK. This is the first major
acquisition of an international brand by an Indian business group.
2001
Tata AIG — a joint venture between the Tata group and American
International Group Inc (AIG) — marks the Tata re-entry into insurance.
(The group's insurance company, New India Assurance, set up in 1919,
was nationalized in 1956).
2002
Tata Sons acquires a controlling stake in VSNL (renamed Tata
Communications in 2008), India's leading international
telecommunications service provider.Tata Consultancy Services (TCS)
becomes the first Indian software company to cross one billion dollars
in revenues. Titan launches Edge, the slimmest watch in the world.
2004
Tata Motors is listed on the world's largest bourse, the New York Stock
Exchange, the second group company to do so after VSNL.Tata Motors
acquires the heavy vehicles unit of Daewoo Motors, South Korea.TCS
goes public in July 2004 in the largest private sector initial public
Offering (IPO) in the Indian market, raising nearly $1.2 billion.
2005
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Tata Steel acquires Singapore-based steel company Nat Steel by
subscribing to 100 per cent equity of its subsidiary, Nat Steel Asia.
VSNL (now Tata Communications) acquired Tyco Global Network,
making it one of the world's largest providers of submarine cable
bandwidth.Tata Sons completes 60 years of Tata operations in the US.
The Taj acquires a hotel run by Star wood, Sydney (renamed Blue) and
takes over management of The Pierre, NY.
2006
Tata Sky satellite television service launched across the country.
Foundation stone for the Tata Medical Centre unveiled in Kolkata.
2007
Tata Steel acquires the Ango-Dutch company Corus, making it the
world's fifth-largest steel producer.TCS inaugurates TCS China — a
joint venture with the Chinese government and other partners.
Computational Research Laboratories, a division of Tata Sons,
develops Eke, one of the fastest supercomputers in the world and the
fastest in Asia. The Taj acquires Campton Place Hotel in San Francisco.
Tata Steel celebrates its centenary on August 26, 2007.
2008
Tata Motors unveils Tata Nano, the People’s Car, at the 9th Auto Expo
in Delhi on January 10, 2008.Tata Motors acquires the Jaguar and Land
Rover brands from the Ford Motor Company.Tata Chemicals acquires
General Chemical Industrial Products Inc.
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2009
Tata Motors announces commercial launch of the Tata Nano; Tata
Nano draws over 2.03 lakh bookings; first 100,000 owners of the Tata
Nano chosen; delivers first Tata Nano in the country in Mumbai.Tata
Motors ushers new era in Indian auto industry with its new, world-
standard truck range.Tata Teleservices announces pan-India GSM
service with NTT DOCOMO.TRF acquires Dutch Lanka Trailer
Manufacturers (DLT), Sri Lanka, a world-class trailer manufacturing
company. Jaguar Land Rover introduces its premium range of vehicles
in India. Tata Motors acquires remaining 79 per cent shares in Hispano
Carrocera, one of the largest manufacturers of bus and coach cabins in
Europe.Tata Teleservices launches Photon TV, an application that
allows Tata Photon Plus subscribers to watch live television channels
on their laptops while on the move, and on their personal computers at
home and in the office. Tata Chemicals launches Tata Swatch — the
world’s most cost-effective water purifier.
2010
TRF acquires UK-based Hewitt Robins International.
4-Gaining Commitment Stakeholders:
The Tata Group has always striven to balance its responsibility toward
shareholders with a commitment to the community. Group company
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Volta’s, true to this tradition, has consistently looked beyond its
immediate business environment to address larger societal issues. This
concern springs from the belief that a true corporate vision must
embrace the wider community rather than just shareholders,
customers and suppliers. There is nothing idealistic or utopian about
this vision, nor is it in conflict with hard-headed business sense. Volta’s
understands that the time, resources and in-house professional
expertise invested in social development projects pay rich dividends to
the company and the communities in which it operates. The message
is clear: creating profits can and should go hand-in-hand with
generating goodwill. There have been, through the years, numerous
causes to which Volta’s employees have given freely of their time and
effort. But until recently the company’s approach to community
development initiatives was not very structured. Things began to
change when Margaret D’Souza, the resourceful and motivated senior
executive from Volta’s human resources department in Mumbai, was
handed the responsibility of giving the movement a decisive direction’s
D’Souza, with a one-year deputation to the Tata Council for Community
Initiatives (TCCI), the group’s umbrella organization for social
development projects, behind her, organized a dedicated band of
Volta’s volunteers. Help was forthcoming from the management. "Our
managing director [Ashok Soni] and vice president (human resources
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[AJ Gole] have given tremendous support," she says, "enabling me to
shape the corporate social responsibility movement for Volta’s during
my deputation with TCCI."Speaking at the official release of a brochure
on the company’s community development activities, Mr. Soni said the
fact that Tata Sons (the group’s holding company) was 60 per cent
owned by charitable institutions was a vindication of the Tata
philosophy of social activism. He commended the volunteering team
for its untiring efforts and assured full management support for all such
future initiatives.Mr. Gole revealed that over the past year there had
been a decisive transfer of control and responsibility from the
management to the volunteering team. Ms D’Souza’s deputation to
TCCI had, he said, resulted in a more structured approach to the
company’s community development initiatives. "The team’s
involvement in core competency projects
Signals a paradigm shift in our corporate volunteering efforts," he
remarked. Volta’s volunteers are currently involved in two ‘core
competency’ projects, so called because they involve a sharing of the
core skills of the company’s employees. Engineers from across the
various divisions have designed a course on air-conditioning that is
specifically targeted to meet industry requirements. The course is
being offered at the Joseph Cardin Institute for Vocational Training in
Mumbai, with the volunteers providing hands-on training to poor
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students. The company has donated equipment for this programmed,
and its former managing director, ND Khurody, has extended valuable
support to ensure its success. The diploma course in air-conditioning
and refrigeration being offered at the KJ Somaiya College of
Engineering in Mumbai is another brainchild of the Voltas family.
Designed by RS Iyer, a former general manager at Volta’s research and
development wing, this course is the first of its kind in Mumbai. The
maiden batch of students passed out recently, and was quickly
absorbed up by the industry. The company’s ‘corporate volunteering’
efforts encompass numerous other projects in the vicinity of its
facilities. This ‘service-nearer-home’ rationale has less to do with
maintaining amicable labor relations than with easily monitoring
project progress and usage of funds. Presented below are snapshots of
Some of the causes where Voltas volunteers have made significant
contributions.Vatsalya, a Mumbai shelter for street children, is
receiving a helping hand from Voltas. Company volunteers recently
organized an exhibition-cum-sale of handicrafts fashioned by the
inmates. The event was a sellout, and was followed by a stage show
entirely managed by the children. A computer centre for these kids
was inaugurated during the function. The National Association for the
Disabled Enterprise, a project directed by TCCI’s Mumbai chapter,
employs blind and physically handicapped people to assemble and
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pack typewriter components. It also runs a printing press — from
where Voltas recently sourced a significant volume of stationery — and
a garment manufacturing unit. Akanksha, a haven for Mumbai’s
destitute children, operates from Volta’s Mumbai office. Company
volunteers have held a series of meetings with Akanksha officials to
start a mentoring programmed for these children. Women are at the
vanguard of the company’s community initiatives. With Ms Komal Bir
Singh in charge, the Voltas Organization of Women (VOW) nurses the
sick, provides financial help to the needy, and frequently organizes
various seminars, knowledge workshops and training camps for the
general public. The bulk of Vow’s budget is allocated for dispensing
medical treatment, and it plans to set up a dialysis centre for poor
Kidney patients in the near future. The ANZA school for mentally
handicapped children in Mumbai is another institution Voltas has
adopted. Volunteers actively support the many workshops organized at
this school and arrange to sell the handicrafts made by the children.
Plans are afoot to set up a regular stall selling the school’s products.
The Shepherd’s Widows’ Home is a regular stopover for the volunteers.
They chat up these lonely women and make them feel wanted. Last
Christmas was a truly joyous occasion for the inmates, with Santa
providing the icing on the cake — a brand new TV. Volta’s employees
from Pine recently visited the Father VS Lourdes’s Children’s Shelter in
35
the city. The gifts they distributed brought a great deal of cheer to the
homeless children there. This volunteering effort was spearheaded by
NS Shenoy and Arnavaz Irani. The Tata Group has joined hands with
the Hyderabad-based MV Foundation to educate child laborers. Volta’s
Hyderabad, with Vikram Kajjam from the human resources department
at the helm, is actively supporting this project by donating furniture
and teaching material. A team of Voltas volunteers in Kolkata
distributed school uniforms to needy children during last year’s Durga
Puja festivities. The city office has installed a collection box for
employee contributions toward social service activities. Volunteers
regularly visit the St. Joseph’s Old Age Home, run by the Little Sisters
Of the Poor, in Kolkata to chat up the lonely people there and bring
some cheer to their bleak lives. With the Tata Business Excellence
Model offering significant importance to such worthy initiatives, the
group has sent a strong signal that all Tata companies must do their
bit for the community at large. Voltas is doing more than its bit to fulfill
this commitment.
5-Monitoring and Evaluation:
TCS: Double clicking EVA
'Economic Value Add' is not just another term that will settle down
among management jargon. At TCS it is a strategy that holds promise
36
to take the company to the heights it plans to achieve Tata
Consultancy Services (TCS) is the oldest and most profitable enterprise
in India's IT pantheon. While Indian software players see TCS as the
organization which set up the industry in India, Tata Group companies
look up to it for the pace at which it implements various management
and quality practices. As it scales up to become one of the top 10
global consultancy firms, TCS is playing a game where rules are
stricter and opponents tougher. TCS hopes its adoption of EVA in April
1999, will help it survive in this intensely competitive business.
To achieve operational excellence, TCS had to answer a few questions:
How to grow beyond just an increase in numbers? How to sell
competence and value rather than skills? How to manage
commitment? How to reduce wastage? The answer to these questions
demanded a system of efficient resource management, better control
of outstanding, and performance evaluation that would link rewards to
revenue generation. TCS faced many challenges while implementing
EVA, but it successfully overcome them to complete the
implementation ahead of schedule. The implementation coincided with
corporate reorganization. Also, given the nature of its projects, TCS
had to design an incentive mechanism not only to retain talent but also
to reward it accordingly.
37
a)EVA for employees
TCSs EVA framework aligns corporate value with the performance of
the constituent business units and the individuals who comprise these.
It is a compensation model where the employee has a share in the
profits of the organization. At the individual level, an employee needs
to know the drivers to enhance the EVA of the enterprise and the
business unit, and his own contribution towards all these. There are
three basic drivers: revenue, cost and capital charge.
"Given that the order size is increasing, TCS has now started looking
At pricing and structuring of deals using the net present value
approach," says Tej Pavan of Stern Stewart. Revenue is driven by the
rate or license price put into the product, sales, billable hours,
response time and domain skills. Cost is managed through
productivity, and is affected by sales and marketing costs, recruitment,
etc. Receivables and training are the bulk of the capital charge. The
individual works towards the improvement of the benefit package,
which essentially has three components: corporate EVA, business-unit
EVA, and the individual performance factor. Out of the total EVA
payment, a certain percentage goes to each employee on the basis of
corporate EVA improvement. Besides, if ones business unit does better
than another business unit, one gets more than somebody in the other
unit. It is a team reward concept.
38
b)Bonus bank
The third one depends on the evaluation of individual performance.
TCS has also introduced the concept of bonus bank. Whenever a
stipulated corporate target is exceeded, the company declares a
potential bonus for the individual. It is cumulated over years and the
pay out is a function of the cumulative balance. This approach ensures
performance improvements and maintains a cumulative relationship
Between pay and performance. If TCS successfully implements EVA,
the credit should go the organizations willingness to break down the
broad strategy into day-to-day activity and integrate them properly.
More importantly, it is the commitment of the entire enterprise towards
value creation that sets TCS apart from the rest of the industry.
Tata Steel: Rolling Out EVA
"EVA is more relevant for us as we are in a capital-intensive business,
and EVA lays stress on investment management," says B Muthuraman
Tata Steel is not content with being India’s only world-class steel
maker. The urge to improve and to emerge as the most cost-efficient
steel producer induced it to consider quality- and performance-
improvement initiatives. It adopted the value-engineering technique,
39
ISO 9000, ISO 14000, QS 9000, Six Sigma, and the JRD Quality Value,
among other things. So why did the company choose to go in for one
more value-based management initiative? The company had been
lagging behind in shareholder returns. Traditional measures like
operating profit and price earnings ratio placed the company at the
top. But it still had a long way to go. As a performance-monitoring
Tool, EVA speaks about value creation for shareholders. "EVA is more
relevant for us as we are in a capital-intensive business, and EVA lays
stress on investment management," says B Muthuraman, Tata Steel’s
managing director.Tata Steel had not expected major benefits in the
short term. But it expected to identify the levers that would help plan
future initiatives. In the medium to long term, it plans to create a
mindset where initiatives across all levels can be linked to EVA growth.
Cascading accountability and decision making downwards is
challenging. "Stern Stewart and Co will be providing extensive training
to 40 of our officers, who will customize the training programmed and
take it down to each employee," Mr. Muthuraman adds.
Luck of the team
Tata Steel is lucky in many ways. Despite its size and historical
baggage, the teams have a lot of enthusiasm and ability to undertake
and improve upon the number of large initiatives concurrently. They
have the best team to extract the best out of consultants, says Tej
40
Pavan Gandhok of Stern Stewart.
Tata Steel adopted a five-stage process for implementing EVA: Sharing
the vision: Creation of awareness among employees Value diagnostic:
Identification of gaps and opportunities Value audit and goal setting
Measurement and management Training and knowledge transfer from
working groups to employees So far the implementation has
progressed along expected lines. Tata Steel’s experience with ‘total
operating performance’ and the performance ethic programmed (PEP)
have helped. These initiatives have instituted a meritocracy-based
management structure, which has improved decision-making
processes even prior to the EVA rollout. Earlier initiatives, like the
balanced scorecard, helped align employee goals with the company’s
objectives. Tata Steel did not have to spend time on identifying EVA
centers and drivers as the PEP was already structured on those lines.
The company was able to integrate all initiatives and make speedy
progress on multiple initiatives.
"We have set ourselves the target of turning EVA-positive by 2007,
which implies that we should be able to meet the expectations of our
investors," says Mr Muthuraman. If the recent capital expenditure
plans are anything to go by, there is every reason to believe EVA is on
a roll.
41
Tata Tea: EVA in a tea cup
Tata Tea started building EVA as a key performance indicator in the
Balanced scorecards, so that the performance-management system
centers around EVA It was the preoccupation with the here, the now
and the future that drove Homi Khusrokhan, managing director, Tata
Tea, to embrace EVA. "An organization that measures business
performance purely in accounting terms will fall into the trap of taking
decisions on the basis of impact o profit, a myopic way of running a
business, rather than impact on wealth, a measure that forces one to
think of the long-term consequences of every decision made," he says.
Setting the stage
Dissatisfied with traditional accounting measures, Mr Khusrokhan had
asked Stern Stewart to do a diagnostic study on value in Tata Tea. The
aim of the study was to see whether information systems focused on
value and enabled good decision making, and which areas had to be
addressed in order to create positive value. Also, the value chain was
not sufficiently de-aggregated to show where value was being created
and where it was being destroyed. Later, Tata Tea started the
measurement phase. This involved training its finance personnel in the
adjustments to be made in the accounting figures. The company
42
steering group decided on how many and which EVA centers should be
created within the company. The EVA process was made possible
through a workshop on plantation economics. The workshop was
Designed to provide a method for treating each plantation as an asset,
with the value of the discounted value of future earnings from the teas
produced at that plantation evaluated at auction-equivalent prices. The
method looked at plantations as units of production that are capable of
generating alternative streams of revenue, depending on inputs,
agronomic practices and prices. This outlook allowed people to make
choices on the basis of financial outcomes rather than gut feel.
Tata Tea has started building EVA as a key performance indicator in
the balanced scorecards, so that the performance-management
system centers on EVA. "The minimum number of such balanced
scorecards will be nine, one for each of the EVA centers," explains Mr.
Khusrokhan. "Since EVA is influenced by decisions made within the
centre, the impact of these decisions will be tracked on the balanced
scorecards for the EVA centre." The idea is to identify where the value
for the stakeholder is being created. The company will test its first cut
medium-term three-year business plan on this metric, and determine
whether the plan delivers the required future growth value. If not, it
will have to reexamine some of the strategies.
Changing for the positive
43
Mr. Khusrokhan adds, "People generally think that only strategic
decision making influences EVA. In fact, quite a few day-to-day
Operating decisions impact value creation and future cash flows. EVA
is not just about capital budgeting or major acquisitions." EVA does not
bear fruit instantly. "We must be realistic. The plan is to improve EVA
year-on-year. We need to generate incremental positive change and
ensure that were moving in the right direction.” Implementing EVA was
not easy for Mr Khusrokhan and his team. They needed to change
mindsets and beliefs that were once held dear. For instance, brands
became "captive to plantations" and the choices open to the company
were narrowed down. Dependencies were created between plantations
and brands, and these became difficult to sever. All own-plantation
teas are substitutable and have a value that can be easily
ascertainable. No unit of production can be awarded a realization that
is higher than its true economic rent. To make the right choices, one
needs to de-aggregate the value-chain and determine where value is
being created and where it is being destroyed. The EVA-based way of
looking at plantation values at the auction-equivalent price of the teas
produced, rather than the aggregated realization that can be got out of
a brand is a better and more correct way of looking at the true
economics of plantations, asserts Mr. Khusrokhan.As far as human
resources are concerned, training in the new methodology will be the
44
greatest challenge. "Our finance people must think of themselves as
business managers and guide the decision-making process correctly, in
addition to controlling the books," says Mr. Khusrokhan.
Empowering employees
By creating EVA centers in the organization, Tata Teas top echelon is
moving away from a top-down decision structure. The company wants
to break problems into constituent parts. The job of the plantation EVA
centre is to maximize the value of plantation assets. The nine EVA
centers are supported by EVA-measurement points, which will aid the
spread of the methodology. The North India plantation operations are
collectively an EVA centre; individual plantations like Poway or Chubwa
are EVA-measurement points. The importance of shareholder value
creation is the most important learning for the management. "Bringing
a long-term perspective to decision making, and not being a slave to
today’s profits and tomorrows reports and results is crucial if the
shareholders interests are to be served in the longer term," says Mr
Khusrokhan. Improving decision making and forcing a focus on the
longer term are the other important lessons that EVA can teach a
management. What the future holds Mr. Khusrokhan expects a
momentous change from EVA implementation. Speaking of benefits to
the Tata Group, he says, "The most significant benefit that the group
can derive out of the EVA methodology is an improvement in the
45
Quality of strategic decision making within individual group
companies." If correctly implemented, an EVA culture can become a
way of life within the organization.
References
1. Tata group introduction and history [online] (Updated May 2010) Available at: http://en.wikipedia.org/wiki/Tata_Group [Accessed 8 July 2010].
2. Tata group corporate social Responsibility objective and measures [Online] (updated May 2010) Available at: http://www.tatatechnologies.com/global/Community.aspx?MenuCode=161 http://www.tata.com/company/releases/ inside.aspx?artid=AMzaeJoYELI= [Accessed 10 July 2010].
3. Tata group corporate social responsibility objective and measure [Online] (Updated May 2010) Available at: http://www.tata.com/htm/tata_review.htm [Accessed 9 July 2010].
4. Tata group Timetable for Implementation [Online] (Updated May 2010)Availableat:http://www.tata.com/htm/Group_milestone.htm?sectid=0Xw9Kk6LW6s=[Accessed 13 July 2010].
5. Tata group Gaining Commitment stakeholders [Online] (Updated May 2010) Available at: http://www.tata.com/ourcommitment/articles/ inside.aspx?artid=xFD+EPoMm3A= [Accessed 10 July 2010].
6. Tata group Monitoring and Evaluation [Online] (Updated 3 March
46
2010) Available at: http://www.tata.com/company Articles/inside.aspx?artid=SGJslTdQYEM= [Accessed 11 July 2010].
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