The award was announced on Tuesday by the Deming Prize Committee instituted by the Japanese Union of Scientists & Engineers (Juse), the body spearheading the quality movement.
The formal award ceremony will take place on November 12 at Tokyo where Tata Steel managing director B Muthuraman will receive the award.
Reacting to the news, Muthuraman said; "No other activity made us think so deeply about our business and relationships than the process of applying for the Deming prize.
Total quality management (TQM) is a fundamental way of managing business and every organisation can gain from institutionalising the culture necessary to win this prize."
The Tata Steel managing director dedicated the award to the employees of the company, its customers and business partners "who have consistently embraced the culture of continuous improvement and demonstrated a great teamwork leading to several recognitions in the last 20 years."
Established in December 1950, the Deming prize, in honour of W Edwards Deming, was originally designed to reward Japanese companies for major advances in quality improvement.
It has grown, under the guidance of Juse and now recognises to non-Japanese companies too.
Juse are the administrators of the process and the examiners are typically university professors with areas of expertise in quality management.
Worldwide, 160 companies have won the Deming Application Prize since the time it was instituted. Of these 160, 15 companies have been Indian, primarily from the automotive sector.