This report contains recommendations for Tata Motors, which is an Indian car company, about how to improve its compliance with ethical behaviour, integrate well with its global dynamics of trade, and create synergies between the business and its environment.
Compliance and Management of Ethical Behaviour
Organizational compliance and ethical procedures are often implemented to make sure that laws and policies are followed. Based on the importance of maintaining integrity in the operations of Tata Motors, the following recommendations should be considered for implementation. The first one is that the company’s management should be proactive in making sure that there is total compliance with set out ethical procedures. This recommendation aligns with the views of Johnson (2017) who says that a company’s willingness to comply with ethical processes is central to creating brand value and increasing profitability. In our case, we found that there was a strong need to manage compliance standards at Tata Motors because of the complexity of the company’s operations. This strategy will also minimise gaps in the implementation of compliance standards in the organization. Another issue that should be considered at Tata Motors is the need to train employees to comply with the company’s ethical standards. Its importance is partly informed by the findings of Taylor and Pagliari (2018) who noted that full compliance with ethical codes of conduct cannot be realised if employees are not trained to comply with the same codes of conduct. Indeed, as Newbery et al. (2016) point out, it is possible to protect a company’s reputation by increasing employee buy-in and making them more engaged in a workplace that values integrity and ethics.
As part of efforts to improve Tata Motor’s compliance standards, the company should also consider integrating its corporate compliance programs with a hotline. Setting up a hotline in the organization would encourage employees to report incidences of ethical breaches to a central authority who will then act on them. Here, the goal is to discourage employees from engaging in behaviours that are not sanctioned by the organization. Relative to this assertion, Bellaby (2018) noted that having hotlines helped to reduce unethical behaviours in organizations by allowing employees to report incidences of fraud and bribery. Tata Motors should consider setting up such an infrastructure to allow employees to report any incident of unethical behaviour in the organization.
Another recommendation Tata Motors should consider is to set an ethical profile for the organization by formulating a code of ethics that encompasses the activities of all departmental managers to follow and impart to their juniors. This way, a culture of compliance can be fostered across all cadres of employees. Lastly, we recommend the need to have a risk-based approach to the observance of ethical principles in the organization because doing so will help to identify priority areas of risk compliance that should be reviewed in the organization. Overall, we should always remember that the reputation of Tata Motors and the trust that its shareholders give to management should provide enough motivation for the company to operate ethically.
Our focus on a global society stems from the integration of businesses and societies. In a global society, commerce is often central to the integration of economic activities. Relative to this observation, technological innovation, large companies, transport networks, and socio-political reforms are the key tenets of a global society. To create synergy among all these aspects of a global society, a culture of innovation should be fostered at Tata Motors. Doing so will also make it more receptive to technological advancements and changes that happen in the global business environment.
Another area of reform that could be pursued in the organization is the need to make its policies flexible and responsive to developments in international law. For example, Tata Motors could embrace changes in employment, environmental and labour laws by adopting flexible organizational policies. The need to align the company’s organizational policies with international standards is partly supported by Tsai et al. (2015) who say that doing so improves quality standards in operational performance. Since bribery and corruption are social ills associated with international trade, we also recommend that Tata Motors should formulate a policy that prevents its employees from engaging in business transactions with multinational corporations or government officials, locally or abroad, who demand bribes. As Taylor and Pagliari (2018) say, embracing such a strategy would help to improve compliance standards in business ethics and integrity. This strategy should align with the tenets of ethical sourcing, which influence how companies conduct their business, including how they seek their suppliers, purchase their goods and services or how they respond to legal violations.
Another recommendation that could be considered by Tata Motors is the need to embrace diversity in human labour because doing so would make the company more receptive to differing values and norms that characterise global markets. Researchers, such as Mikhaylov (2014), have highlighted the benefits of creating a diverse workforce by saying that it helps to improve the image of organizations and the quality of their work output.
Business and the Environment
Businesses often do not exist in isolation. As alluded in the works of Chattopadhyay and Bhawsar (2017), the risk of resource depletion, international business agreements, government taxes, societal concerns, and shareholder interests are just a few issues that often influence the relationship between businesses and their environments. To cope with the demands of these stakeholders in Tata Motor’s external environment, the company should engage in corporate social responsibility programs like tree planting or volunteering to make sure that it coexists well with the communities it supports and that host it. At the same time, the company should make sure that it adopts sustainable business practices such as recycling to reduce the company’s environmental impact. Another recommendation that should be considered is not only relying on the company’s measurement of carbon footprint but also using international measures of environmental impact assessment. This recommendation aligns with those of Etokudoh, Boolaky and Gungaphul (2017) who emphasised the need to adopt best practices in third-party logistics. Lastly, Tata Motors should endear to exploit “green” opportunities that exist through marketing and brand communication, as proposed in the works of Tsai et al. (2015), Gershoff and Frels (2015). In other words, the public should see the company as a proponent of green business practices.
The findings of this report show that Tata Motors needs to adopt flexible organization policies to embrace change and better align its business strategies with the environment. Adopting these strategies has been linked with several benefits, such as reduced operating costs, lower operating risks, increased revenue generation, and enhanced brand performance as alluded in the works of Vickers and Lyon (2014).
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