The company has decided to implement a management structure which, in addition to being flat in structure, would also reduce the number of levels in the management.

Each SBU will be headed by officials in accordance with the importance of a particular business unit, company sources said.

Although the final management structure is yet to be decided and approved by the board, senior Tata Steel officials said that deliberations on the matter are on and the plan will be drawn up and implemented by April this year.

The new management structure will prepare the company to face global competition, Tata Steel managing director JJ Irani said at a press meet, on Wednesday evening in Mumbai.

Tata Steel is among the lowest cost steel producers. However, there is much scope to improve response time by changing the managerial set up. Dr Irani was of the opinion that technology alone cannot help make an industry profitable, but it also requires proper functioning of the management. He said the current organisational structure was hierarchical and hindered communication. The company thus, wishes to replace it with a flat and lean set up.

Dr Irani also said that Tata steel has already been successful in implementing the voluntary retirement scheme (VRS) this year. It has cost the company Rs 15 crore higher than the earlier year. He said the company had a work force of around 50,000 workers as on January 1, 2000. Dr Irani said he expects the figure to come down to 48,000 by April this year. The management will implement upon its yearly targets of VRS, Dr Irani said, rather than having a big retrenchment gameplan.