Kanika Jindal_HRLP028_Transformational Industrial Relations

Insights on the Maruti Case

Indian automobile sector has been enjoying a super-fast development at an increasing rate of 33.9% per year. Automobile industry is currently contributing about 5% of the total GDP of India and is very important for the development of India. Thus stability in this sector is not only very important for the particular company but also plays a pivotal role in the GDP of the country.

Also, globally India has been accepted as a good manufacturing base. But, workers protests have been one of the top of the agenda of the Indian automobile industry. Being a democratic nation India is suffering from various kinds of worker strikes and, unrests since her birth. Such acts of violence have tarnished the image of India, especially in view of the economic slowdown.

One such case is the Maruti Suzuki Manesar plant case which has been unimaginable for most of us. To analyze the root cause of this outburst it is important to first analyze the contribution of different stakeholders to the problem:

• Japanese management was more work oriented and there was no emotional sensitivity towards the workers.
• Though the Indian management was a great source of inspiration at the start of the plant, they failed to understand the workforce well. The communication channel was very poor and they were too aligned to the Japanese way of thinking. There was too much domination by the Japanese culture.
• Managers and supervisors carried an unfavorable attitude towards the workers.
• Associates lacked trust within the management and supervisors, and were too young and immature.
• Interpersonal relations at different levels and the work environment were not conducive.

From the above reasons we find out that the main and ultimate reason behind the worker unrest was communication gap and lack of trust between top management and workers.

If the workers were motivated enough to follow the rules and regulations and maintain a certain level of productivity, it would have lead the Company to success. This could have been achieved if the management was transparent with the workers and helped them fulfill their aspirations. In this connection we may focus on Victor Vroom’s expectancy theory, which deals with motivation and shows a path how managers can secure a highly motivated workforce.

Firstly the top management should have found out what the workers really wanted and what is it that would present highest value to them. This is what we call ‘Valence’. Secondly, managers should have created instrumentality, which means that the managers should have convinced the employees about work related expectations from them, which would give them the desired rewards or value. Finally, managers should have ensured that the employees had the perfect conditions and necessary capabilities to accomplish the given task.

Also talking about perfect working conditions, I feel that there is greater need of labor reforms in India, which can provide

-          Extension of working hours, to compensate for lower productivity

-          Allowing adjustments in workforce, in terms of providing the right to hire, assign work, reward, promote, transfer, and adjust work-force as managerial rights

-          Providing Employee State Insurance scheme: For example, certain employers incur expenses towards Employee Insurance Scheme (ESI). However there are no ESI hospitals except for a few clinics which have been developed, thus forcing the companies to shell out additional expenses on labor welfare apart from ESI.

Conclusion:

As the number of middle class people is rising at a rapid speed the market of small size automobile in India is also rising. Moreover Indian automobile market has a bright future. That is why almost all the world leading automobile manufacturer has started their facilities inside India. India herself is a business hub in south Asia, where 22% of the world’s total population lives and 10% of the world’s wealth is located. Thus there is enormous scope to prosperity to the key automobile players who can cope against the unavoidable circumstances such as work slow-down, worker unrest and strike. Some of the efficiency factors that can play vital roles in the success of automobile players are: labor productivity, labor flexibility, resource availability, establishment of export markets, successful industrial relations policy, ethical and tactical industrial relations, understanding implications from Government policies, etc. 

Kanika Jindal
HRLP028