ABSTRACT This management accounting case provides insights into the emergence of global firms
from emerging economies that have effectively adapted modern management accounting tools in
strategy implementation. It is based on real-life situations and was developed using information
from interviews and access to the firm?s internal processes, journal articles, and other publicly
available information. It is suitable for use in second level courses in management accounting or
on MBA programs. It provides insight into the use of the balanced scorecard, in particular the
strategy map and measurement.
KEY WORDS: Case study, management accounting, balanced scorecard
It was well past mid-night on a crisp January night in 2007. The Tata Head Office in
Mumbai (Bombay) was alive with restless anticipation as Chairman Ratan Tata, Managing
Director Muthuraman and a handful of key executives monitored the London auction for
the Anglo-Dutch steel firm Corus. CSN Brazil had proved to be a determined player and
had already raised the bid close to 570 pence per share, edging the total purchase price
beyond the $9 billion mark. Tata knew that this was a crucial stage in the life of Tata
Steel (TS) given the global changes taking place in the steel industry. Besides, the
company had prepared for this moment over the past few months, beginning with
Managing Director Mr Muthuraman focusing on meeting expansion goals through a
program of selective mergers and acquisitions.
While steel prices had leveled in developed countries, recent increased steel consumption
in emerging countries such as India and China had rejuvenated the steel industry.
However, consolidations and mergers were also beginning to re-shape the industry and
the supply chain to increase the competitive strengths of the industry.1 Historically, the
Accounting Education: an international journal
Vol. 18, No. 2, 117 ?130, April 2009
Correspondence Address: George Joseph, Department of Accounting, College of Management, University of
Massachusetts Lowell, One University Avenue, Lowell, MA 01854, USA. Email: [email protected]
0963-9284 Print/1468-4489 Online/09/020117?14 # 2009 Taylor & Francis
?commoditization? of steel had made it vulnerable to economic cycles. Additionally, while
raw materials? vendors and major customers such as automobile companies were highlyconcentrated,
the steel industry was fragmented. This also made it more vulnerable to raw
material price increases combined with steel price fluctuations that often resulted in a
profit squeeze. The cost of freight had also increased, due in large part to Chinese
trade, making it necessary for companies to locate closer to raw materials. In fact, it
was now imperative for TS to adopt a global strategy to survive.
The company had adapted to the environment, while retaining its historical image for
high moral and ethical standards. The company has incorporated insights about stakeholders?
needs through a ?stakeholder engagement? system in developing and implementing
strategy. Additionally, the Balanced Scorecard (BSC) had become critical in
integrating various components of the strategy, and communicating it throughout the
organization. After the initial adoption of the BSC, the company felt the need to strengthen
its use. In January 2004, TS invited Ted Jackson, then President of the Balanced Scorecard
Collaborative, to conduct management seminars on the use of the scorecard. Mr Sharma2
of the Strategy and Planning Division recalled that the workshop was attended by Senior
Executives of Tata Steel and its associate companies. The concept of the strategy map was
refined and developed in some detail. Additionally, Ted Jackson also discussed the BSC
cascading process and clarified how Business Support unit scorecards differed from the
Business unit scorecards. Mr Sharma remarked that the workshop had succeeded in
adding needed momentum to the use of the BSC and increasing communication within
Steel, the basic commodity that forms the basis for several products from the construction
of buildings and tankers, to hairpins and clips, has a complex and global supply chain (see
Figure 1) and a shifting customer base.
The recent resurgence in the industry, fueled by the construction boom and increasing
demand for consumer goods in emerging countries, was an opportunity for Tata Steel. Tata
Steel (TS) had come a long way since its inception on 26 August 1907 as the Tata Iron and
Steel Company. Whilst zealously guarding an enviable reputation for high ethical values
inculcated by the founder, Jamshedji Tata,3 TS had developed a placid culture over the
years, with a sizeable payroll and a limited steel capacity less than five million tonnes
per annum (mtpa). Liberalization of the Indian economy in the 1990s and a change of management
resulted in major changes in the company. The new Chairman, Ratan Tata, set
in motion a culture of change in management without compromising the ethical base
that defined the essence of the Tata philosophy captured by the Tata Code of Conduct.
The company transformed itself from an outdated high cost operation to a low cost
Figure 1. Steel industry overview
118 G. Joseph
modern steel producer, named third in management by World Steel Dynamics.4 It was also
increasingly becoming the preferred supplier of steel for high-end products such as automobiles.
However, the steel sector was changing rapidly and globalization was the next
challenge. Fragmentation in the steel industry led to lower margins compared to other
players in the supply chain. For example, three iron ore suppliers had over 60% of the
total market share, with margins of 35%. Customers such as the automobile industry
were also highly- concentrated with the top five firms controlling 65% of the market. In
contrast, the top 10 steel firms had only about a quarter of the total global output and a
margin close to 10%.5 This had also resulted in re-structuring of the industry, leading
to mergers to increase price stability. Chairman Ratan Tata understood the challenges:
In this changed steel scenario, Tata Steel cannot stand still. It must explore ways of enhancing
its capacity domestically while also establishing finishing facilities in strategic locations internationally,
leveraging its low cost Indian base and the availability of domestic iron ore. The
Company needs to evaluate and invest in new emerging steel-making technologies, so as to
enable it to be a state-of the-art steel-making facility.
Tata Steel had begun to shop globally, purchasing NatSteel in Singapore6 and
Ferrochrome Smelter in Richards Bay, KwaZulu-Natal, South Africa. In October 2006,
Tata Steel made a bid for the Anglo-Dutch steel giant, Corus, which specialized in highend
steel products including aircrafts and automobiles. Ratan Tata felt that this purchase
would integrate well with the company?s global strategy.7 Thus, Tata Steel was poised to
reap the benefits of globalization, liberalization and the growing steel demand from Asian
economies, while remaining alert to the threats of hostile takeovers, the pressures on
prices and raw materials, and the increasing competition to create value for the customer.
Role of the BSC in Tata Steel
After spending time with management at the head offices in Jamshedpur, Ted Jackson outlined
a program for the BSC workshops. The key objectives of the workshops were to revitalize
TS?s BSC program to make it more effective, to integrate the BSC with the Strategic
Governance process, and to create momentum using the BSC as a dynamic process.
Several key executives, including Mr Muthuraman, the Managing Director (MD),
Mr. Mukherjee, the Deputy Managing Director (DMD) of Steel, and Mr Chaturvedi,
Vice President (VP) of Flat Products, attended different sessions in the workshop (see
Figure 2 for the organization structure). There was a variety of sessions, including sessions
for strategy development, strategy maps, and cascading of the scorecard.
In the strategy session, executives reviewed key factors integral to the strategy, the
firm?s vision, values and mission. All reaffirmed the firm?s desire to remain true to
the vision of the founder, Jamshedji Tata, to strengthen India?s industrial base through
the effective utilization of staff and materials by mobilizing high technology and productivity,
consistent with modern management practices. The TS vision recognized that,
while honesty and integrity were the essential ingredients of a strong and stable enterprise,
profitability provided the main spark for economic activity. The vision also acknowledged
the need for an atmosphere free from fear, and thereby reaffirmed its faith in democratic
values. The Tata Code of Conduct institutionalized the firm?s value system. The code
included several articles that highlighted the need for transparency and mutually beneficial
relationships with different stakeholders (Elankumaran et al., 2005).8 The Tata Code of
Conduct specifically forbids bribery and corruption in various forms.9 The firm?s
mission was to mobilize resources to avail itself of opportunities through areas such as
emerging technologies, new business models, value creation, customer service, new
Mapping, Measurement and Alignment of Strategy 119
Figure 2. Organization structure
120 G. Joseph
products, services or businesses to make the firm EVA positive.10 Additionally, the firm
would keep in view the vision by improving the quality of life of the employees and
the communities served and upholding the spirit and values of the Tatas in nation building.
The firm placed a high priority on ?stakeholder engagement? and used feedback from
stakeholders to identify key areas of strategy and as a means to integrate economic,
social and environmental issues (part of the Code of Ethics) into its strategy.11 The
engagement process (Figure 3) helped identify key stakeholders within stakeholder
groups, assess and prioritize their concerns and address them in corporate strategy.
The executives were familiar with the variety of forums to receive feedback and communicate
with stakeholders including investor satisfaction surveys, customer conferences
and satisfaction surveys, vendor dialogues, meetings with key suppliers, employee dialogues,
senior citizens? forums, and joint community meetings. Information from stakeholder
engagement, integrated with values, mission, and the competitive environment, formed
the basis for strategy development. Using this information, the executives were assigned
the task of drawing up the ?strategy map,? which Ted described as the ?roadmap? of the
strategy linking key components of the strategy in the four BSC perspectives. After
several hours of debate and heated discussions, the executives finally agreed to a map
over which there was reasonable consensus (see Figure 4). Mr Sharma recalled some of
the discussions with executives from different functional areas highlighting their contributions
to overall strategy. The Chief (Strategy and Planning) coordinated the efforts,
guiding discussions along the areas linked to the BSC perspectives.
While the strategy map proved to be invaluable in articulating overall strategy, Ted
Jackson emphasized the critical importance of cascading strategy to different levels in
the organization by developing scorecards at the corporate level, as well as for each
business unit and support unit. Scorecards formed an integral part of communication
and alignment of strategy. The cascading process began at the corporate level with the
Managing Director?s (MD) scorecard.
The team next worked on the outline for the MD?s scorecard (also called the corporate
scorecard) that emphasized areas where the corporate office provided the synergies to
enable achievement of organizational strategy. Muthuraman had set the financial goal
of becoming EVA positive, a target he recognized as difficult in the steel industry. He
recognized the need to emphasize quality through branding, and meeting the manufacturing
demands of sophisticated customers such as automobile and aircraft manufacturers to
increase margins. The global aspects of the Revenue strategy, to achieve revenue growth
and diversification into related end products through mergers, were also evident in the
scorecard (Table 1).
The BSC now needed to be cascaded to different levels in the organization. The task
would continue long after the workshop, but the sessions had set the stage for a
renewed and revived implementation of the BSC. As Mr Sharma thoughtfully summarized
the impact of the BSC, he expressed his appreciation of the overall usefulness of the
Figure 3. Stakeholder engagement process
Mapping, Measurement and Alignment of Strategy 121
Figure 4. Strategy map
122 G. Joseph
Table 1. Corporate balanced scorecard
BSC perspective Corporate objectives
(unit) Actual Target Benchmark Strategic initiatives
Create incremental EVA year
on year on existing
507 10% incremental
EVA year on year
Posco China Steel (5.4%) Grow organically & through M&A (in India & overseas) to 15 mtpa by 2010
Execute overseas Fe-Cr facility
Establish global presence in steel manufacturing
Sustainable & aggressive growth
Invest in attractive new business
Divest, merge, acquire
Increase in top line
21 20% year on year 43% Gerdau SA Establish a low cost coastal plant to link domestic & global operations
Internal Capacity expansion
Execute Titanium Projects plans
Develop well-defined M&A framework for domestic & overseas acquisition
Move from commodities to
Retail sales through
100% Improve brand promotion & brand positioning
Implement retail value management (RVM)
Value creating partnerships with
index (CSI) ?
Customer value management (CVM) program with 100% OEM customers
(enterprise Accounts) by 2007
Develop customer relationship index
Value creating partnerships with
Continue to be the lowest cost
producer of steel
Encourage innovation and allow
the freedom to fail
Ensure safety and environment
Improve quality of life of the
communities we serve
index (out of
(% of turnover)
02? 03 levels
Individual and parameters for
each stakeholder group
Tata Steel is the benchmark
Improve operational excellence & sustain cost competitiveness
Improve perception? potential employees, school students, government,
Improve corporate governance practices
Implement social accountability (SA 8000)
Collaborate with DuPont for institutionalizing safety
Enthused and happy
Improve the quality of life
of the employees
Bring unionized cadre in knowledge management fold
Improve knowledge sharing & knowledge Manthan
Improve workplace ambience, safety & ergonomics
Increase time spent on developing people to create leaders at all levels
Create leadership pipeline and develop global managers
Unleash people?s potential and
create leaders who will build
74.7 85 Unique
Source: Adapted from Tata Business Excellence Model Report.
Mapping, Measurement and Alignment of Strategy 123
workshop, particularly in the strategy map development. Business units and support units
would now need to develop their own scorecards using appropriate themes from the strategy
map to ensure strategic alignment. Using the stakeholder approach, the firm set about
determining areas of customer and stakeholder concerns and requirements, the focus for
further development of business unit scorecards.
Business Units: Measurements and Outcomes
Mr Mukherjee of the Mumbai (Bombay) sales office, explained that the Sales (Flat
Products) Division used its ?listening and learning? activities (customer visits, satisfaction
surveys, and other ?listening posts? such as call centers and e-linking) to gather information
and develop measures by customer segment and product category. An example
of customer value creation was evident in the Bombay sales office where, in the midst
of hectic activity, Mr Mukherjee negotiated the next month?s supply of auto grade steel
with representatives from Mahindra & Mahindra, a major auto customer. The Bombay
office had a direct video conferencing with the production facilities at Jamshedpur and
the customer production facilities. The agreement included details of ?technical? and
?delivery? conditions, key components of the customer value proposition.
A key feature of the marketing strategy has been the development of strong relationships
with large customers and retailers. In line with the strategy, TS developed measures
by customer type and product segment to identify areas to strengthen relationships with
customers. Important measures in the Enterprise category included share of business, satisfaction
index, and awards and certificates;12 for distributors, measures included monthly
sales analysis, complaint analysis, number of products, Brand Equity Index, and new
products introduced. Additionally, measures by product segment and product mix, as indicated
in Table 2, enabled the firm to develop processes to meet customers? expectations.
Classified broadly by production into Long and Flat Products, the mix indicates the
product development strategy move from commodities to high-quality brands. The firm
also used brand names such as Tata Shaktee and Tata Steelium to differentiate their
products and to emphasize quality. Branded products, contributing about 14% to the
company?s sales, commanded a premium over non-branded products in the market,
with a higher turnover.
The customer requirements reflected the close interaction and led to innovations. As
Mr Mukherjee explained, ?We convey the customer requirements to production in
Jamshedpur. While we try to ensure that all customer complaints are addressed and
orders are complied with in a timely manner, each customer has unique needs that we
also try to fulfill. Sometimes, we have seen major innovations from production and R&D,
as a result. Take the case of the innovation of ?galvanized bake hardening steel? for dent
resistant automotive use, a breakthrough in developing steel for automobile chassis.?
Internal Business Processes
TS identified several processes key to implementing strategy. ?Operations and Fulfillment?
was one critical process that included several support processes (Table 3).13 The concerned
departments used information from surveys and business plans to determine key
process requirements. These process requirements were translated into in-process and
key performance measures. Key performance measures (KPM) measured the effectiveness
of the process (outcomes) and they were linked to the BSC. However, the process owners
were particularly concerned with the in-process measures, which guided their activities.
124 G. Joseph
Improvements in these areas also generally translated into improvements in KPMs. The
control methods ensured internal and external audits of the efficiency of the processes.
The departments/business units controlling the processes usually developed their own
scorecards tied to the MD?s scorecard and the strategy map. For example, the objective of
the R&D was to make Tata Steel an EVA-positive company. As MD Muthuraman put it,
?It is the strategy that drives the research objective. R&D has a BSC that is tied to the
MD?s BSC. It contains various strategic measures in the perspectives of finance, customer,
internal business processes, people and special projects. Its performance is measured
against the metric set in the BSC.?
Learning and Growth
The support departments, particularly the HR, had also streamlined their activities to
conform to the strategic goals spelled out in the BSC. New employee orientation included
Table 2. Market segments and expectation
Products Segment Customer requirements
HR, CR, galvanized
Auto segment Surface quality
Appliances Shape and hardness
General Engineering Mechanical properties
Hot rolled products Consistency in chemical properties
Consistency in mechanical properties
Tata Shaktee Zinc yield ratio
Long products, TISCON: projects Weight/meter
Tiscon-wire rods Yield strength
Weldability (carbon equivalent)
Compliance to technical delivery
TISCON: retail Compliance to technical delivery
High carbon wire rods Compliance to technical delivery
Low carbon wire rods Compliance to technical delivery
Source: Adapted from Tata Business Excellence Model Report.
Mapping, Measurement and Alignment of Strategy 125
Table 3. Key support processes, requirements, KPMs and in-process measures (operations and fulfillment value creation process)
processes Key process requirements In-process measures
measures (KPMs) Control methods Process owner
Procurement Timely availability of
products and services at
Partnership with suppliers
Average lead time for placing
order; GRN cycle time;
Feedback from vendors on
timely payment; Spend
base covered by strategic
sourcing; Trends in
improvement in response
Savings through strategic
Involvement in community
development and ensuring
a safe and clean
Waste utilization; capital
investment on pollution
equipment; safety training;
expenditure on society
CCI; family planning;
water pollution, quality;
lost due to
accidents; ambient air
ISO 14001 and
ISA 14001 and
Timely availability of data
and information at all
levels for decision-making
Trends in improvement in
response time (IT); IT
Overall CSI with ITS Internal CSI; Help
126 G. Joseph
Develop new customized
products for customers;
efficiency in operations
through better processes
R&D expenditure No. of innovations; no. of
patents; no. of new
development cycle time
R&D reviews at
apex level and
Chief (R&D and
Availability of plant and
of electrical power
Compliance to performance
requirement of level 2
systems; power generation
Average uptime of
rate; works power cost
Timeliness; accuracy; speed
Internal CSI Cycle time for cost
reports; accuracy of
cost reports; invoice
processing within due
date; monthly accounts
of salary to banks
Source: Adapted from Tata Business Excellence Model Report.
CCI ? Corporate Citizenship Index; CFC ? Chief Financial Controller; CIO ? Chief Information Officer; CSI ? customer satisfaction index;
DMD ? Deputy Managing Director; GRN ? goods receipt note; ITS ? Information Technology Services; MD ? Managing Director; VP ? Vice President.
Mapping, Measurement and Alignment of Strategy 127
the Code of Conduct, team building exercises, company policies, strategic objectives,
acculturation, and management systems and processes. Management development
training focused on a key ?basket of competencies? vital to the short-term/long-term
growth of the firm. Training programs were developed by employee category, (e.g.
workers, supervisors, and officers) and employee life cycle, (e.g. new employee plant
visits, on the job training, special projects, and advanced training).
To cultivate a culture of innovation and knowledge management, TS employed ?learning
from failure? sessions that led to new insights into processes and innovations.
Mr Maheshwari, Chief of Scientific Services pointed out that: ?learning from failure
and developing an innovation evaluation method is extensively used to improve and
differentiate products.? TS also captured knowledge at different levels from ?tacit shop
floor? knowledge to ?global expert? knowledge and communicated it across the organization
through its knowledge management (KM) portal. In line with Tata values, training
included that of disadvantaged groups, (e.g. tribal groups) and diversity training in such
areas as cultural (religious, language and social) and gender (professional and social
empowerment of women).
The firm recognized the importance of feedback and incentives to ensure the effectiveness
of training and knowledge management programs. There was systematic data collection
integrated with information technology that enabled timely collection, retrieval, and
analysis of performance measurement (Table 4).
Sometimes training was not as structured, nevertheless linked to strategy. Mr. Chaturvedi
recalled how MD Muthuraman had sent him to Northwestern University?s Kellogg School
of Management (located in Evanston, Illinois, USA) for a week long program on mergers,
acquisitions and alliances. He did not realize that, in just a few months, his time there would
be put to good use during the acquisition of NatSteel in Singapore. Sending Chaturvedi to
Table 4. Key data and Information gathered for daily operations and organizational performance
(sample, not exhaustive)
Key data and information How collected
Daily operations Sales, dispatch compliance, productivity,
Customer complaints Lotus notes/manual
Employee grievances Manual
Safety performance Safety incident reporting system
Customer satisfaction index, supplier
satisfaction index, market share
Employee satisfaction index, corporate
Economic value added (EVA), profit after
tax (PAT), operating profit,
asset utilization, return on equity (ROE),
growth, revenue from branded
products, premium from branded
Tata business excellence model (TBEM)
Source: Adapted from Tata Business Excellence Model Report.
128 G. Joseph
Kellogg was part of Muthuraman?s plan of transforming TS into a global player, something
that was increasingly taking shape.
Merger and Continuing Challenges
Looking back over the years since the initial BSC implementation and the revival after the
workshops in 2004, Mr. Sharma concluded that BSC had helped improve focus and flexibility,
increasing the ability of the firm to initiate new ventures and adjust to changes.
Recent financial results were also impressive. Despite price fluctuations and raw materials
increases, Tata Steel leveraged its low cost, high productivity and revenue strategy to
influence its bottom line considerably. Recent quarterly earnings indicated that Tata
Steel?s EBITDA was considerably higher than that of competitors such as Nippon
Steel, Arcelor, POSCO, JFE, and Mittal Steel.14 However, challenges for the future
remain. The external environment in the steel industry has many uncertainties and strategy
needs constant evaluation. While the demand side appeared to have gained momentum,
there was always the concern about cyclicality of demand. Additionally, overcapacity
in the Chinese supply side could also destabilize prices.
Nevertheless, TS was now better equipped to meet these challenges. The results of the takeover
battle were in. Overnight, Tata Steel had changed from the 55th to the 5th largest steel
firm in the world with a capacity of 25 mtpa and a global reach. At $11.3 billion, the cost was
high, but according to Ratan Tata, ?we hadn?t reached the limit we had set ourselves.? The
immediate challenge was to integrate a much larger firm, a process that could include
many possible hurdles. However, there was now an air of confidence. As Ratan Tata
summed it, ?the human chemistry was good. There is more going for us than against us.
When the hurdles come, we will deal with them. What we have done now is create an integration
committee that will operate towards integration of both companies seamlessly.?
1. How does Tata Steel develop strategy?
2. Using the strategy map (Figure 4), organization chart (Figure 2), and other relevant
information, present scenarios where different functional area managers use the
strategy map to interact and discuss a unified strategy.
3. Strategy map and strategy implementation:
(a) How does the strategy map result in measures and initiatives in the BSC?
(b) Comment on how different perspectives contribute to the final goal of becoming
4. Measurement and incentives:
(a) Briefly describe the steps in measurement that enable TS to use measures to
improve performance and increase transparency (use Tables 1 to 3, with
emphasis on Table 2).
(b) Does the nature (or type) of the measures influence the BSC implementation?
Identify the different types of measures in the TS case and indicate their
(c) What are potential problems/ pitfalls that may affect strategy implementation?
Discuss how they may (or may not) apply to the Tata Steel case.
5. Considering the future of the merger with Corus, discuss possible ways that Tata Steel
could benefit from using the Balanced Scorecard approach.
Mapping, Measurement and Alignment of Strategy 129
Most recently, the Arcelor and Mittal Steel merger created the world?s largest steel company with 110
million tonnes capacity, setting the stage for more mergers.
Some names have been changed to protect the identity of individuals concerned.
A Parsi philanthropist and pioneer, Jamshedji Tata was involved in the nationalist movement during British
colonial rule in the 1800s. He was one of the first to see the need for self-sufficiency through a thriving
The firm was third in management after S. Korea?s Posco and China?s Bao Steel, based on such criteria as
management, technology and cost of production. Some details of the transformations during this phase are
outlined in Seshadri and Tripathy (2006), which includes projects such as revamping the blast furnace and
turning around the rolling mills. See also, Meredith (2005).
Recent world capacity was about 1113 million tonnes, with production of 962 million tonnes. China contributed
about 31% of the total, followed by the EU and the USA. India totaled about 40 million tonnes, with
Tata Steel production capacity equaling about 5 million tonnes; currently, the top 10 producers produce
about 30% of the total world production. Information on the steel industry can be accessed from a
variety of sources listed in the references, including speeches by Mr Mittal of Mittal Arcelor available
at http://www.mittalsteel.com/News?and?Press/Speeches?and?Presentations.htm (accessed 31
March 2007) and presentations by TS?s MD Mr Muthuraman available at http://www.tatasteel.com/
investorrelations/investorevents.asp (accessed 31 March 2007). 6
Dhawan and Roy (2004).
Corus was about five times the size of Tata Steel. However, Tata Steel had the backing of the vast resources
and access of the Tata Business House, which included a stable of companies such as Tata Motors and Tata
Consultancy Services (the largest information systems firm in India).
See Elankumaran, Seal, and Hashmi. (2005).
Bribes are often commonly accepted as a means of accessing licenses and circumventing a circuitous
system, but the firm?s reputation helped to overcome many of the problems that plagued the system. 10Economic value added (EVA) an extension of Residual Income, was trademarked by Stern Stewart and Co.
TS used the measure to target returns (RONA) that was greater than the cost of the capital invested.
EVA ? (RONA ? WACC) times invested capital, where: EVA is economic value added, RONA is
return on net assets (?net operating profit after tax/net assets), and WACC is weighted average cost of
11While the firm identifies shareholders, financial community, customers, media, employees, regulators,
suppliers and partners as stakeholders, the key stakeholders are customers, employees, shareholders and
12Recent awards included ?Best Localization Award? from Hyundai and ?Approval for Global Supplies? from
Caterpillar, demonstrating ?customer delight?.
13Specifically, Tata Steel identified 12 key enterprise processes (KEP) through a framework detailed by
APQC. APQC (initially called American Productivity and Quality Center) became internationallyrenowned
after the creation of the Baldridge Awards and later work in setting up the International Benchmarking
Clearinghouse and the Open Market Benchmarking Collaborative that helps identify current
benchmarking measures and best practices (see http://www.apqc.org/portal/apqc/site for more details). 14EBITDA stands for earnings before tax, interest, depreciation, and amortization and is useful to analyze and
compare profitability between companies and industries because it eliminates the effects of financing and
accounting decisions. April 2005 to March 2006 comparisons of steel companies from news briefs on
Tata Steel website showed: Tata Steel: 40%, Nippon: 19%; Arcelor: 16%; POSCO: 30%; JFE: 22% and
Dhawan, R. and Roy P. (2004) The new world of Tata Steel, Business World, 13 September. Available at www.
businessworld.in/index.php/The-New-World-of-Tata-Steel.html (accessed 31 March 2007).
Elankumaran, S., Seal, R. and Hashmi, A. (2005) Transcending transformation: enlightening endeavors at Tata
Steel, Journal of Business Ethics, 59(1?2), pp. 109? 119.
Meredith, Robyn. (2005) Tempest in a teapot, Forbes, 14 Fe
ABSTRACT This management accounting case provides insights into the emergence of global firms