Tata in Africa : where to next?

Abstract

Tata has been successfully trading in Africa for over 35 years in diverse industries and countries. This case study focuses specifically on Tata Africa’s strategies and operational innovations.In African countries, institutional voids exist — the absence of conventional mechanisms that make business work — which present a significant challenge for businesses operating on the continent. The objective of this case study is to understand how Tata has had to adapt its strategies in Africa to overcome these institutional voids in a way that has allowed it to operate successfully in multiple countries and industries.The case study format has been used because it enables a deep analysis of the strategies adopted by Tata. It also provides a means for classroom teaching methods that will enable students to better understand the challenges of doing business in Africa and how to overcome them.Two central questions posed to students of Africa are: 1.) Why has Tata developed activities that are so different from its core businesses? 2.) Instead of allowing the challenges it found to prevent Tata from trading in Africa, the company has devised strategies to ensure long-term success. What are they?Based on the findings, the answers to these questions lie firstly in the “five context framework” proposed by Khanna, Palepu and Sinha (2005) to identify the existence of institutional voids, and secondly in a model derived from the research into the strategy of Tata in Africa that offers solutions to overcome the institutional voids.Other issues for class debate and discussion are also offered.