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globally which helps to meet the challenges and provide benefits to the employee from various
aspects.
Multinationals often make judgmental errors regarding cross-cultural issues and the business
environment prevailing in foreign countries. Honda Motorcycles and Scooters India Ltd.
(HMSI), a wholly-owned subsidiary of Honda Motor Company Limited, Japan, established its
plant in India in 1999 and made such mistakes in handling people-management issues.
The performances Appraisal are done at the end of the fiscal year.
The work committee is formed by 15 workers and 5 management representative and they
were nominated on the base of perceived interest of different person rather than the
experience and quality the person hold and also there was no voting system.
Employee state insurance wasnt provided.
As the number of workforce increases, company stopped celebrating foundation day.
The voice rose by employee on November 2014, when company gave Diwali gift too
cheap than they were expecting whereas competitors are giving refrigerator.
The employees have to sign movement sheet even to go toilet and to drink water.
The employees are forced to attend more than one machine at a time which leads to
Management puts its full effort to weaken the employee effort but whatever they tries it
becomes worthless.
Analysis:
Two fundamental belief of HMSI was respect for individual differences and three joys but they
didnt follow their core belief to give respect to every individual in the organizations.
Factors that sink the industrial relation in HMSI:
Poor local management practices: Japanese inability to adapt the local Indian cultures.
Management didnt provide any platform for workers to express their opinions: they were
idiosyncratic Japanese Vice president. He had a reputation for saying anything to anybody at
any time. Once he even kicked one employee in leg because he was late for two minutes
from tea time break. He apologized for his act but he repeated his same action by pushing the
cap of a Sikh worker knocking it off him just because he was wearing a different colored cap.
Later he was send back to Japan, but the workers were not satisfied with the mere apology by
the VP and lack of action taken against him.
Increase in wages
Provision of house rent- 70% of wage.
Dearness allowances
Provision of milk and gur(jiggery) per worker everyday
Provision of union office with telephone facility
Loan for marriage
Provision of library
Abolition of the policy of overstay
Try not to let to form a union but purpose to form an internal committee instead
Lobbying with the government to prevent formation of registration of the union.
Management suspended four workers on charge of adopting go-slowing policy,
Labor Action
Here, the conciliation process also failed because both the parties stick to their own
demands. Management wanted worker to sign statement of good conduct which consists a
clause to work unconditionally and remain disciplined while on factory premises and also clause
of stipulating non-pursuance of union activities by the worker at work. It was this clause that
became contentious and which compelled workers not to sign the contract and therefore
management refuse entry of the worker in the factory premises. Management hired some
temporary worker from its vendor companies in order to maintain production schedule. In June
2005, management and union reached an agreement whereby management agreed to allow
worker to enter the premises and work under the condition that the terminated worker would not
be taken back or reinstated. But the worker put up the union flag at the factory gate. And disturb
the work of temporary worker. Management decided to use police protection, the result of which
leads to fall in production.
On July 25th 2005, workers of HMSI with the help of other industries worker staged a
rally at offices of the district authorities to press their demand for reinstatement of their
dismissed and suspended colleagues. Police restrict their entry in the factory premises as a result
some masked men attack one of the police officer and also set fire to their vehicles. Then the
false message was sent to the workers that their demands are going to be met and asked them to
assemble at the lawns of secretariat. Then police use their armed force and attack the workers.
The number of workers injured was claimed to be 700. And also police arrested number of
workers and booked them under different section of the Indian Penal Code. This act was
criticized by most of the people including media. Violence continued till next day where HMSI
closed operations for half a day.
Apart from the three joys, the company had imbibed the joy of creating as an important
value for itself, which helped staff drive happiness from their daily work.
Employees were called associates
Similar uniforms and common canteen facilities were provided for all staff.
Training program for internalization of culture-building, for building team leader, TQM
After unionization
better
Union got all of the trainees absorbed into regular jobs, when management refused to
union bearers for discussion which was the new development in the Honda Company.
Overtime was completely scrapped out when union found health of the workers was
expenses in batches
Because of the union, workers Diwali bonuses and incentives were increased.
Recommendation
After going through the whole case it has been clear that the improper handling of human
resource was main cause of the entire problem faced by both management and labour.
The organisation or people at top management should keep in mind the cross cultural
issues while doing business in host country about their values, belief and assumption
The organisation policy should be such that they should be able to recruit highly
qualified people and retain them in proper manner to make sure that they stay within
the company.
Being sensitive to human needs and about their problem at work and beyond the
work.
Company should evolve a value system based on trust, transparency, fairness and
equity.
Make communication circle such that employee open up if any problem arises.
Management should deal with employee grievances promptly and properly because
improper grievances handling will lead to conflict as it happened in the Honda
Company.
Management should not have looked down upon labour union because it way to build
a relationship of dialogue between employees, employers and society also it is helpful
to avoid industrial disputes so as to develop a healthy work environment .
While handling the problem management should have to explain logic and rationals
of decisions to convince the employee.
Meeting should be conducted from time to time in order to know what is happening at
shop floor.
Should review HR policies and practices from time to time so that it makes working
environment more flexible to employee.
Conclusion
In Honda Company the whole problem started with a simple issue of bonus. And off
course the Vice President who was from Japan ill-treated the employees twice. But if all these
issues and grievances were handled properly and in timely manner that it would not have
resulted into a big conflict. But all this incidents with all other small issues compiled up and
result in the formation of the union. And from here, it took a violent turn. The success of Honda
was not the result of senior management works alone. In fact, team work can result in better
productivity, reduction in turnover, and absenteeism. The senior management should be open
minded and should have good cultural knowledge about the culture practices of the host country.
Employee working at all level should be treated well and participant them in decision making so
that a feeling of belongingness develop within the organization. The organization should listen to
the employee in order to know their expectation from organization. The company should take
labor Union positively that it is not only for the benefit of employee only but also benefited for
organization in case of undesirable demand by employee work as arbitrary between employee
and senior management.
At last, employee shouldnt be ignored, if company wants to be success in the market.