Tata Motors aims for leaner organisation, flatter hierarchy

Tata Motors is moving to a five-level hierarchy from three levels in the supervisory grade

The country’s largest automobile maker Tata Motors Ltd (TML) has embarked on a massive restructuring of human resources (HR) that would transform the organisation into a much leaner one with a flat hierarchical structure. Effective April 1, the new structure would be in place.

From a 15-16 level hierarchy, the organisation is moving to a flat five-level hierarchy. Earlier, Tata Motors had three levels in the supervisory grade, five in the managerial grade and around six or seven in the executive grade. Now there would be five grades, L1 to L5, with L1 being the highest. Above these levels, there would be the executive directors, presidents and the managing director.

The company confirmed the development. A spokesperson said, “As you are already aware, Tata Motors (TML) has embarked on a transformation journey and one of the core initiatives is the organisational effectiveness (OE) program.”

This has been done to improve speed and agility in a large organisation like Tata Motors. Tata Motors Group employs almost 59,000 people.

“A detailed study on how to improve ‘speed, simplicity and agility’ was conducted with the support of an external agency and the recommendations have been examined in detail by the Executive Committee (ExCom) of Tata Motors,” the spokesperson explained.

Through this exercise, TML is aiming to become a lean, agile organisation, by empowering its business units with clear accountability, strengthening functional leadership and oversight, ensuring faster and effective decision making, and improving customer focus, the company said in a response to queries sent.

Rituparna Chakraborty, co-founder and executive vice president, TeamLease Services Ltd seemed to agree. 

“In large organisations, there is a tendency to accumulate flab over time, which makes the organisation sluggish and it loses focus from its core function, customer focus. A complex structure also tends to breed mediocrity as a lot of inefficiency at times hides behind such complex structures and the accountability is compromised,” she said.

The company expects that the new structure will certainly lead to synergies by an optimal utilisation of resources.

It is learnt that the company made senior employees undergo tests through an assessment centre and there has been considerable realigning of officers in different grades. The spokesperson said, “We can confirm that after conducting intense and extensive workshops for the last couple of months, the Executive Committee of Tata Motors has finalised and recently announced the new management levels for L1 and L2.”

He added that indeed, some functions and roles have been realigned and some new functions have been created. This new organisation structure will come into effect from April 1, 2017.

“This being an internal exercise and in progress, we are not in a position to comment on specific roles and additional details,” the spokesperson said.

It is also learnt that key people like Girish Wagh, who was senior vice president and head of project planning and programme management in Tata Motors, and was a key figure in the Nano project has been transferred from the passenger car business unit to the company’s commercial vehicles division in the medium and heavy commercial vehicles segment. This could not be verified with TML as well.