Mr_Wong_Boon_Yew

DIAGNOSES HONDA MOTORCYCLES AND SCOOTERS INDIA LIMITED CASE ANALYSIS - I Competition, quality, low cost, multi-skilled and highlyendowed workforce, low inventory cost, relocation, global geography of production, and so on are the principles of new production systems. The new production dynamics require flexibilities in every sphere, internal and external. The typical post-Fordist sermon asserts that competition is the real master; the real enemy to workers is not their employer but some firm somewhere else. The stress is on joy of production, creating customised quality product, constantly making technical innovations, and so on. The shift in emphasis in post-Fordist system is from human relations to logistics. The State in the LPG model of development needs to pamper the foot-loose capital and assist in maintenance of poor labour standards. Trade Unions and strikes are considered hindrances. It is in this context that this case assumes significance. HSMI believed that attractive salary (higher than region-cum-industry average), accompanied by a host of benefits coupled with suitable framing of human resource idioms and phrases such as Three Joys should satisfy the material and non-material needs and aspirations of workers especially in a developing country such as India. These more than justify the tough shopfloor regime that the typical multinational firm designs. High workload, stressful work schedule, militarisation of shop floor discipline, hard personnel policy (in terms of dealing with aspects like leave, promotion, etc.) characterize the production relations system prevalent in HSMI. These conditions thrive in the absence of a Trade Union. This further aids the pursuit of discriminatory personnel and HR policies. These have surely sown the seeds of discontent. The absence of twoway communication system and the invisibility and inaccessibility of top management to workers further accentuated the divide between the workers and the management. Workers have two options: to QUIT or to stay back and VOICE. Former is painful for unskilled and tough for even skilled workers in a lose labour market. The latter is possible but fraught with difficulties as this case story demonstrates. HSMI workers took the latter option and approached AITUC, which must be having a significant presence in that region; otherwise, even this choice is not rational. Now, a Trade Union is a direct challenge to authority and would eventually result in loss of managerial autonomy. It is this more than the material gains arising out of unionization that hurts the managerial ideology. It is but natural that HSMI management resisted Union entry into the firm. The State (political executive, administration, police) had unfailingly come to the aid of HSMI in its efforts to discipline workers and resist Unions. The compatibility between HRM and Trade Union existence has been a matter of debate. HRM can thrive, even excel with Union, it can displace Union, it can render it unnecessary. It is left to the firm concerned to tailor its HRM-Trade Union relationship suiting the local conditions. HSMI chose to crush unionization. The role of top level Japanese management in this policy making is not clear; were there instructions from the headquarters in Japan' Were they kept informed of the developments' What are the conflicts involved in understanding an alien culture of Unionism for the Japanese top brass' These require probing. The more fruitful HR model for HSMI is to accept the inevitable and try to integrate the Union in its HR policy framework. That Unions can play a positive role was evident in the efforts of the Union leaders to go to each department on 2ndSeptember, 2005 and ensure that work went on despite some minor problem in one department. But what is interesting is the unending process of conflict generation, let me list the issues that cropped up: non-acceptance of Diwali gift in November 2004, protest against Japanese VP for alleged ill-treatment of a worker, charter of demands, suspension of four workers, nonabsorption of trainees, dismissal of suspended workers, non-pursuance of Union activities by workers while on work, termination of service of contract workers and so on. Conflicts aid in destruction or construction of Unions. In HSMI, it led to installation of Unions and laid the foundations for institutionalizing collective relationships and rule-making process. In this sense, these conflicts could be converted into “constructive conflicts.” People 84 Case Analysis q management means many things more than fine HR language; it is an integration process. Workers won an important gain, that is the right to organize. But it is the Union, which has greater responsibility to act rationally to sustain jobs and protect rights. The chances of granting and protecting labour rights rise in step with prosperity, for which HSMI has to remain competitive. If growth policy is integrated with sound HR policy, it will succeed. Integration of Unions can be a component of sound HR policy. The reactions and counter reactions by government representatives reflect the concern on both supply and demand sides. Whatever little research there has been so far indicates that labour relations is not the key determinant of FDI; other factors such as infrastructure, absence of corruption and red tape matter more. It is also argued that poor labour standards is a short run advantage for poor countries; high labour standards increase productivity and reduce unit labour cost. Hence, it is better for both firm and the State to invest in them even though it is a long-term process. K.R. Shyam Sundar Reader—Economics Guru Nanak College of Commerce Bombay University Mumbai-400 001 CASE ANALYSIS - II The case on Honda Motorcycles and Scooters India Limited (HMSI) is perhaps a good reminder to the scholars and practitioners in the field of management that Trade Unions and industrial relations cannot be dismissed as things of the past. Since the advent of new technologies (NT) through the 1960s-1970s and the widespread and ever increasingly powerful application of IT in almost all facets of business and trade, the workplace and modern organizations have experienced dramatic changes. During the 1990s, globalisation followed by the widespread restructuring of businesses and markets saw competitiveness going beyond geographical and political boundaries to an un-precedented level. While the various businesses and their products/ services came under severe pressure to survive and succeed, Trade Unions too started facing questions of relevance. With some notable exceptions, in most parts of the world, density of Trade Unions declined and workers’ propensity to participate in strikes reduced dramatically, marking an important departure from confrontationist style of industrial relations to a collaborative model, and India is no exception to this change. The steady decline in the number of man-days lost due to strikes and lockouts during the past decade is a clear indication of this improvement in industrial relations in India. During the recent years, many organizations have been able to introduce major changes including technological innovations, organizational restructuring, product/market diversification, mergers and acquisitions. While industrial relations in India in the period preceding the 1990s may have been dominated by the powerful Trade Unions, particularly at the national level, the process of rule making in many work organizations during the past decade has become unilateral leaving little room for the voice of workers. The newly emerging industrial relations scenario in India no doubt suited the management and also encouraged foreign companies to look at India as an attractive investment destination. However, an important question that remains unanswered is the role of the workers in evolving the norms of employment relations in the workplace. Is it possible and fair, in the name of competitiveness and productivity, to ignore the concerns of an important stakeholder and partner in business' The developments that took place in HMSI, which led to major disruptions, violence and a total breakdown of industrial relations may be attributed to the continued refusal of management to address the workers’ grievances and also the denial of their right to form a Trade Union. One of the most important lessons that the case conveys is the fact that even if the workers are paid well above the competitors and the market rates, the management certainly cannot and should not ignore their grievances, nor will the workers allow their dignity and self-respect to be affected. Presence of appropriate grievance management machinery and their proper implementation could have avoided the disruptive situation at HMSI. Secondly, it is necessary that the management should establish its credibility by developing trust and confidence among the workers. And when the workers express their desire to create a mechanism (such as a Trade Union) through which they wish to articulate their problems to protect their interests, they are only asking for freedom of expression, which is difficult to deny in a democratic environment. Moreover, it has also been established theoretically as well as through large number of empirical studies that Trade Unions are institutions which are important for building partnership at the work place. Thirdly, various theories on leadership would suggest that when (subordinates) employees clearly express a desire to participate in some form or another VISION—The Journal of Business Perspective q Vol. 9 q No. 4 q October-December 2005 Case Analysis 85 q in the administrative affairs of the organization, it is necessary that management adopt a participative process of leadership by ensuring greater degrees of empowerment, which again appears to have been missed by the management in the case of HMSI. The management in this case has shown complete disregard for the labour laws, which amounted to unfair labour practices. For example, the management offering the workers a compensation package on condition that they would not form a Union, and also the suspension/ termination of services of workers who took active part in getting the Union organised, are gross violations of the provisions of the Indian Trade Union Act, which permits a worker to become a member of a Union of his/ her choice. Similarly, the management violated the spirit of the Industrial Disputes Act, when it asked the workers to sign a settlement of good conduct during the pendency of the conciliation proceedings, as well as their refusal to let workers enter the factory. During and after the unrest in HMSI concerns were raised by several people including businessmen and media that the unrest may adversely affect the flow of FDI to India and it may send unfriendly signals to future investors. But, there are more serious questions that need to be examined including whether Trade Unions are unique to India, and since they are not, can a democratic country like India afford to neglect the fundamental rights of workers to form Trade Unions in the name of attracting FDI' Or is it time that we talk about the need for management to develop professional skills to deal with Trade Unions to foster constructive industrial relations at the work place' Kuriakose Mamkoottam Professor—Human Resource management Faculty of Management Studies University of Delhi Delhi-110 007 CASE ANALYSIS - III July 25, 2005: Pictures of hapless Honda workers being surrounded and brutally beaten by the uniformed police with scant regard for human rights and the reactions of hassled, angry relatives of the workers who were missing or gone into hiding for fear of being hunted down dominated the airwaves. The televised suppression of workers protest at the hands of the State raises many questions. They range from cross-cultural challenges of multinational companies (MNCs) in industrializing countries like India, managerial styles of expatriates and host-country managers, Trade Union rights in multinationals and the link between Trade Union activity and foreign direct investment (FDI). It also raises questions about the role of the media as an actor in the current industrial relations system, role of State and politics in Union–management relations and also invokes memories about the negative role of involving lawenforcement agencies in settling workers protest. Undoubtedly, of course, disruption of civic life, destruction of property and manhandling of State Police Force personnel are also not justifiable and the law has the right to take its course. Votaries of anti-globalization were quick to argue before cameras, about ill effects of opening up the economy where labour rights are trampled upon. Similarly, company officials had their views about unruly Trade Unions who refused to behave and the threat the incident causes to India’s image as a promising FDI destination. Political parties were quick in condemning the events and the government initiated quick actions to sooth the nerves. The events were sufficient to once again raise the debate about relevance of Trade Unions in contemporary society and their struggles in the globalizing world. State suppression of Trade Unions and worker struggles is not new. The “Annual Survey of Trade Union Rights Violations” by International Confederation of Free Trade Unions reports that in 2004, 145 trade unionists were killed, and there were more than 700 violent attacks and nearly 500 death threats against workers for indulging in Trade Union activities. (Quoted in: Zarocostas, John (2005) Global Labor Study Cites Human Rights Violations, WWD: Women’s Wear Daily, 10/19/2005, Vol. 190, Issue 84). The report also cites aggression by state forces and thugs on workers in different countries. Gurgaon incident may probably find a mention in the 2005 survey. Prima facie, with its pursuits of supposedly professional HRM activities and welfare benefits, HMSI did provide all the essentials for good public relations and preferred employer branding including nice uniform, caps, sports and recreation facilities, etc. Beyond those perepharilities, the experience of HMSI as given in the case points to the requirement of valuing human dignity and rights in modern day workplaces. There has been a line of argument that the new HRM activities and initiatives are nothing but sugar-coated pills that lead workers to a state of illusion about happiness and well being, and at the same time they de-emphasize the role of Trade Unions. Real issues affecting working class are often left unattended and they await a trigger for VISION—The Journal of Business Perspective q Vol. 9 q No. 4 q October-December 2005 86 Case Analysis q explosion. Job and income insecurities, fear of substitution, pressure to maintain life style and the individualized contracts prevents workers from standing up and often stretching beyond normal human capacities. HMSI management’s approach of differentially dealing with favourites and non-favourites among associates, probably using criterion other than performance was one of the key reasons for discontent, since it would have been perceived as rewarding for obedience or ‘chamchagiri.’ Such acts raise concerns about fairness in treatment, both at procedural and distributive-justice levels. The easy way to explain the case is by placing blame for such incidents of violence on class differences and power distance in oriental societies, lack of cross-cultural orientation for MNC managers and the mob behaviour of police when one among their group is hurt. HMSI’s Indian managers did keep a distance from workers, which was multifaceted at social, economic and cultural levels. The practice of even denying nature-breaks, leave and work flexibility––presumably to bring more discipline at workplace––indicates that old mindsets of control and distancing still exist, though there were discussions and structures for empowerment like works committee and other committees. The expatriate manager, VP–Manufacturing did deal with workers in a culturally alien manner often bordering on intolerance––though his acts were qualified by the phrase ‘Strict Honda Disciplinarian.’ Conceptually, the triggers for unionization could be traced to the cultural and procedural infrastructure created by managerial actions, which prompted workers to look at alternatives to restore their rights, not a politically induced move as Trade Unions generally get formed in States like Kerala. I would place the move to unionize in this case as an effort to restore worker rights in an abusive workplace, as envisaged in any civil society. After all, worker rights are also human right issues. The charter of demands (possibly exaggerated demands were placed as bargaining points to give up at the table) and subsequent events are natural progressions towards conflict, at times caused by inept handling by management and the stubborn stand of the Trade Union. The treatment of workers as mere hands of production, who were just expected to obey orders of management, took the work philosophy practiced at HMSI to the dark ages. The reality is that, in today’s competitive business environment information sharing and consultation with workers and Unions have attained new meanings. The ITI-trained lowest-level worker of HSMI, who has personal access to newspapers and information including through TV and Internet, will be confronted with all types of information about HMSI including its plans, performance and advertising. The worker is also answerable to family and community about company performance and rewards of working in an MNC. In an industrial community like Gurgaon, the social networks often prompt comparison between entities, more often causing dissatisfaction. HMSI definitely lagged behind in communicating business reality with its employees, which would have made them more appreciative about the financial health and competitive realities. The case highlights two more critical factors that companies need to consider. There is a trend to treat labour as a dispensable commodity by using contracts, trainees and casuals––thus getting the freedom of operating with ‘at will contracts.’ This is backed up by the belief that India being a populous country, willing workers are always available cheap and also that the tenure-security offered by the law to organized workers have made them unproductive. At the same time, there are sufficient case studies from the Indian context which prove that the latter was not always true. The next factor is to view the workforce from talent-management perspective. Even as ‘hands’ are available in plenty, hiring and retaining adequately-skilled employees is a problem. It takes more effort than calling employees as ‘associates’ to win commitment. Trade Union or no Trade Union, it’s the company and its employees (managers as well as workers) and if there is an open channel for communication and conflict resolution, one needs to look for a third party help. If management was willing to listen and understand the requirement for an employee collective, associates would (may) not have approached AITUC to help them. Bringing about change in attitudes is difficult, and a (costly) shock treatment may do the trick. Though at considerable cost, the harrowing experience of HMSI workers, managers and their families also shows a few positives. The first one is the degree of openness the new generation of working class and managers has displayed in re-building the broken trust. By adopting a mutually accommodating approach and openly dealing with conflicts as an when they evolve, they were able to quickly restore equilibrium. It also signifies the recognition about the synergistic role of both sides. An all pervasive communication and mediatechnology-enabled environment, ensures that such conflicts do get beamed into the living rooms of public, VISION—The Journal of Business Perspective q Vol. 9 q No. 4 q October-December 2005 Case Analysis 87 q often creating bad PR and damaging market credibility. Cost, energy and time involved in rebuilding what was lost can erode an organization’s competitive advantage. Building and sustaining a productive IR climate drives organisational competitiveness. From the broader Trade Union perspective, the fact that employees Union was allowed to continue though the wage demands were kept in abeyance, is in itself a victory. The management and associates of HMSI need to be complemented for recognizing that basic right of workers. Biju Varkkey Faculty—Human Resource Management Indian Institute of Management Ahmedabad-380 015 CASE ANALYSIS - IV The events that led to the unsavoury outcome in HMSI in July, 2005 disclose the wide gulf between policies and practices, assumptions and realities, and means and ends. For instance, the progressive HR policy with its focus on ensuring the 3-Joys, decent compensationpackage, performance-related rewards, welfare orientation, etc., was not matched by supportive practices. The managers conducted themselves like autocrats, abused their authority, imposed unreasonable restrictions on employee movement, refused leave even in genuine cases, threatened the workers of termination from service, etc. Likewise, the assumptions made by them in respect of unionization are out of step with the legal framework, and so was the belief that money alone could make workers happy and wean them away from Union activities. Similarly, the means adopted by managers could hardly be said to be in tune with the requirements of a modern, civilized, democratic society, as reflected in the behaviour of the Vice-President— Manufacturing, a Japanese national. The crux of the problem lies in the total dependence of top management on middle managers without assessing their ability to deliver and without putting in place proper checks and balances. Even the competence of human resource (HR) personnel is open to serious doubt, given the amateurish manner in which they went about suspending four workers as a measure of victimization followed by mass suspension of a staggering 50 workers en bloc, and the dismissal of the four workers who were earlier suspended. This one action is sufficient to expose the incompetence of HR managers of the company. To add to this, managers interfered wrongfully with the internal affairs of workers, summoned them to their chambers and issued threats. The management travelled to the unwise extent of openly lobbying with politicians and bringing pressure on the Labour Commissioner against granting the Certificate of Registration. This fear complex so manifestly displayed by managers had only strengthened the resolve of workers to unionize. It is difficult to understand why the management should have got panicky over the issue of unionization. Indian Trade Union movement in the post-globalization era has matured enough to give constructive cooperation to the management(s). The position in companies like Hindustan Lever, ITC, EID Parry and several others illustrate this point. Nor could it be said that Honda is operating in a non-Union dispensation in Japan and other countries. It is also not the case that the Trade Unions have been completely wiped out in the Far East or in the West. A number of organizations such as GM, Hyundai and others are very much unionized and have been operating successfully. It may be possible for a small organisation with a handful of workers to manage on an individual basis sans a Trade Union, but it is unrealistic for a large company with a few thousand employees to manage its HR function on a one-to-one basis, unmindful of its dysfunctional consequences in terms of lack of uniformity, managerial subjectivity, low motivation, commitment, etc. Instead of trying to play down the Union, the management should display a proactive stance. What is called for is “statesmanship” coupled with a long-term strategy to develop a working relationship with the Union, and not a knee-jerk reaction. As part of this strategy, it should professionalize its HR function and appoint a qualified and experienced IR Manager at the top level. One important lesson the company can learn from this otherwise disastrous episode is that “people management” should stem, not from ‘fads’ and ‘slogans’ that have been flooding HR literature of late, but from a deep analysis and clear understanding of the cultural moorings and aspirations of people. Any attempt to transplant practices borrowed from other cultural contexts on an ‘as-is-where-is’ basis will only end up in a mess as has happened here. It is futile to invest time, money and energy on efforts to prevent unionism or to dilute the strength of the Union. This is yet another lesson to learn from this case. The damage done to the reputation of the company is undoubtedly irreparable. It is difficult to completely erase the events of July 25, 2005 from the public memory and, at any rate, it is a long and hard VISION—The Journal of Business Perspective q Vol. 9 q No. 4 q October-December 2005 88 Case Analysis q process. A well-planned, multi-pronged effort alone can resurrect the lost image through sustained public relations and progressive HR practices. E.M. Rao Professor—Human Resource Management Xavier Labour Relations Institutes Jamshedpur 831 001 CASE ANALYSIS - V The unsavory and unfortunate episode which culminated in the most brutal police action against protesting workers on 25 July, 2005 could certainly have been avoided. It was a clear case of insensitivity and breakdown in communications. Hero Honda, a joint venture partner of Honda in India, was doing well. Like most other multinationals, having had a foothold, Honda wanted to operate without the ‘Hero’ in a green field plant where the conflict described in the case occurred. The management has not violated any provision of the labour law. In an earlier dispute in Suzuki-controlled Maruti too the Union contested, unsuccessfully, the legality of the management insistence on good-conduct undertaking. The problem with the new human resource policies of the kind described in the case is the underlying assumption of the management based on the belief that such policies would help make the enterprise ‘Union free.’ Most of the new breed of human resource managers tend to undermine employee relations and fail to heed Peter Drucker’s last warning that ‘they are not just employees, but also people.’ Action anxiety leads to irrational behaviour and suboptimal responses. Though there is no explicit evidence about unfair labour practices on the part of the management, one could surmise its interest in Union avoidance. One also sees a hardened stance on the part of labour administration in many States because in their anxiety to woo investors these days no government–– not even a government led by left coalition––is willing to give a ‘pro worker impression in addressing labour management strife. The delay in registration––whatever the cause––made matters worse. Managements give workers voice and representation in non-Union situations through formation of labour–management councils (in this case the works committee) rather grudgingly. It appears that the salary and benefits in Honda were less than those in Hero Honda. Of course, the Honda management can attribute the difference to the relatively higher age of workforce in Hero Honda. The situation in HMSI had gone out of control because of the kneejerk reaction of the police in response to the attempted assault by a section of the agitating crowd on one of their senior officials. The police acted in the most reprehensible manner and the whole world had seen it on the television which created enormous sympathy for the agitating workers. The role of the outside elements, including non-locals and the instigation and/or exploitation by one or more political parties in making matters worse needs to be reckoned. These factors changed the colour and complexion of the conflict and turned the heat and political pressure on both the State government––which is responsible for law and order maintenance––and the company. The government had to show some consideration to workers and the Union and take some action against the erring police. The management had to take some measures to win the workers’ confidence. The workers and the Union scored a moral victory and earned public sympathy. As expected in such situations, the immediate steps had to be taken to deal with the symptoms rather than the disease itself. This explains the conciliatory stance of the management towards the workers and the Union in the aftermath of the police action. Fortunately, the workers and the Union also seem to be restrained in their attitude and behaviour rather than be exuberant and exploit the popular public sentiment for short-term gains. Against this background, the management would do well to review and take stock of the situation, keeping their ears to the ground. It should not let egos flare up or create mental blocks. Open, transparent two-way communication, both between management and employees and management and Unions, should be streamlined. Management should go out of the way to take some confidence-building measures by focusing on the workers grievances. Continuous communication and consultation will make it easy for employees and their Union to cooperate and collaborate with the management. The management should consider Union as part of the solution rather than part of the problem. It should also recognize that it can not run a modern corperation with traditional feudal attitude: ‘This is my boat, do not rock it. If you are not happy leave the boat” attitude will not work. It needs to earn the trust and cooperation of the employees through fairness and equity in its policies and programmes. If the management is fair, it becomes easier for it to become firm. C.S. Venkata Ratnam Director, International Management Institute New Delhi-110017 VISION—The Journal of Business Perspective q Vol. 9 q No. 4 q October-December 2005 Case Analysis 89 q CASE ANALYSIS - VI Union is one of the most critical and complex constituents of Industrial Relations. It is an organisation having its own needs of survival and growth; it is a power centre and potentially a counter-power within the company; it can also be a functional requirement, especially in large organisations; and most important, it has been granted social legitimacy through legal system to exist and function, whether one likes it or not. This complexity also very often puts internally conflicting demands on the Unions and, therefore, Unions are invariably in a flux. Their priorities, strategies and tactics are no less dynamic than those of the respective corporations. Unfortunately, this inherent fluidity of the Unions is precisely the reason why unionization is a major issue in business corporations. In a competitive environment, cost, quality, schedules and innovation are seen to be the environmental imperatives. A collective body like a Union that can bring unpredictability in work relationships, can, in the interest of its constituency, pressurize for costs enhancement. This can reduce the management’s flexibility in dealing with the people the way it feels prudent in the interest of organizational profits. This inflexibility naturally adds to the chaotic character of the already demanding environment. Given this context, the managements of the large corporations have been experimenting with various approaches to this complex entity and these approaches range from substitution to leveraging. While the trend of substitution of Unions through strategic and proactive HR has been a dominant theme in the U.S., Europe has been largely focusing on dealing with Unions in a manner that could lead to a win-win situation and build stability rather than add to the uncertainties. Both strategies have shown success especially if followed in a consistent manner. The strategy of HMSI is not clear from the limited information given in the case. The condition put forth by the management that the workers would not indulge in Union activities within the company premises, does not sufficiently establish that the Company has the strategy of Union-free organisation. Time off is a matter of philosophy and even in some of those companies, which have a very good IR, time off is not allowed to the Union executives. Similarly, the fight against Union in the initial stage too does not prove that HMSI wanted to follow the strategy of a Union-free HR. The reason is very simple. Every organization invariably resists the entry of a Union because it weakens, and has the danger of destroying the established relationships and old loyalties. Union challenges the status quo and, thereby, introduces uncertainties, anxieties and resistance. Confrontation, suspicion and hostility at the time of the entry of a Union in a non-unionized corporation is, therefore, not uncommon. . The important aspect in industrial relations, consequently, is not the presence or absence of political action and confrontation in the early stages of unionization. Instead, it is the willingness and capability of the organization to readjust itself to the new situation and substitute hostility and bitterness by congeniality and mutual agreement on the rules of the game. Given this, the series of events in HMSI should be looked at as a natural part of the IR evolution. The brutality and hysteria displayed by the participants during confrontation does hurt the sentiments of a civilized society but if we look at the early history of unionization across the globe, we will not consider it abnormal. What is important, and what will script the future IR in HMSI, is the shift that seems to be taking place post 25th July. The case indicates three critical developments. Management’s willingness to curtail unilateralism and grant legitimacy to the voices of dissention among workmen; gestures of reasonableness and humaneness in personnel policies and individual actions; and a resulting positive perception of management among the Union members and signals of responsible behaviour on the part of the Union itself. However, along with these, there are also indications in the case that the “shock” of the violence persists in the management’s psyche. The anxiety regarding the image of the company as well as the capability to achieve the expansion targets is yet to erode and the Unions too are tentative in their assessment of the management. In other words, though the management has apparently crossed the delicate denial stage yet the positive relationship has just begun to evolve. Conceptually, industrial relations can be located on a continuum starting from hostility, antipathy, apathy, empathy to integration or partnership. What needs to be seen is whether both the Union and the management are able to de-link the future course from the hurt of the violent experience and whether they are able to build a relationship based on mutual trust of reasonableness and respect or they fall back on the adversarial stances of a power game. The more the management and the Union itself, emphasizes the political aspects of the Union’s role, the greater are the chances that the relationship will VISION—The Journal of Business Perspective q Vol. 9 q No. 4 q October-December 2005 90 Case Analysis q be either dominated by one or lead to the cancerous approaches of appeasement. In the former case, depending on the external and internal factors, eruption of strife would be a common feature. In the latter case, peace at the cost of long-term interests of the organisation would be the natural outcome. On the other hand, if both the parties decide to give more importance to the representational role of the Unions and develop rules of the game for the effective performance of this role, the possibility of a disciplined and constructive relationship will get enhanced. To expect a full fledged partnership between the two at this moment can only be the dream of a romantic. On the other hand, if HMSI really wanted to follow the strategy of “No-Union HR,” then it has failed miserably in its initiation itself. The crux of this strategy is to deal with the workers in a manner that they do not feel the need of a Union. Such a strategy demands extremely effective sensing and communication strategy and systems as well as diligently-worked-out policies and behavioural demonstrations of respect and sensitivity, thereby, flexibility, towards its people. The case depicts a situation totally contrary to this spirit. Unilateralism, rule-orientation towards discipline, workfocus bordering on the line of insensitivity to people’s needs and aspirations, all point to a pattern that could not have been expected to eradicate among the workers the need for a powerful collective voice. In any case, it is too late for this strategy now as the Union has already been formed. All that HMSI can do in the given reality is to either leverage the Union by following the constructive approach mentioned above, or re-orient the strategy so as to reduce among the workforce as well as in the larger society the legitimacy and moral appeal of the future negative actions by the Union. Abha Chaturvedi Professor—Human Resource Management Management Development institute Gurgaon-122 001 CASE ANALYSIS - VII The case brings out clearly what problems the subsidiary of a multinational firm may face in the field of human resource management when it tries to export its management systems and practices from the parent country to its subsidiary in another country which does not fit the local cultural context. It is more so when the top management of the subsidiary comprising of expatriate managers from the parent country do not have any understanding and knowledge of the local culture and society while the host country managers on whom the responsibility for managing human resources vests do not have the necessary expertise of managing human resources. In fact, the explanation for the labourmanagement conflict which this wholly-owned Japanese subsidiary in India had witnessed should be sought in all these factors and their interactions. Following its parent company, the subsidiary instituted a system of human resource management (HRM) which could be termed as paternalistic or benevolent authoritarian. As is well-known, such a system is based on the assumption that the employees are dependent on the management while the management has responsibility towards them. It discharges this responsibility by taking care of what it considers to be the needs of the workers and not what the workers may consider to be their needs. In return the workers must show full loyalty to the management and submit themselves fully to its authority. The system lays emphasis on the welfare of workers while it deemphasizes especially their need for autonomy and responsibility, and growth. Consequently, the values of individualism and such other related ideas as the right of free expression and speech, right of free movement, right of freedom of association and so on are anathema to such a system. The top management of the subsidiary comprising of the Japanese managers did not know the language that the workers spoke. Neither did they have much knowledge and understanding of the local culture for which they “did not understand the working of the organization from the workers’ point of view.” The responsibility for managing the workforce lay with the Indian managers who however did not enjoy much power in terms of “taking major initiatives in different dimensions.” Moreover, the line managers among them were production specialists and had no understanding of industrial relations matters. On the other hand, the HR department was not adequately staffed. Several senior posts of the department including that of the Assistant Training Manager were lying vacant since long even though the “HR department was expected to organize training programmes and facilitate internalization of culture-building so as to promote the Honda way among the employees.” Further, there were also doubts about the competence of the current HR chief. In line with its paternalistic philosophy, the subsidiary paid the workers well and provided welfare facilities which were good by any standard. But the VISION—The Journal of Business Perspective q Vol. 9 q No. 4 q October-December 2005 Case Analysis 91 q workers did not have full confidence in the fairness of the management in terms of giving them benefits as exemplified by their rejection of the Diwali gift in 2004. There was also a big gap between what the management claimed to be its fundamental belief about the value of and respect for the individual and how it actually treated its employees. In fact, the management showed scant regard for human feelings and dignity while managing its workforce. The workers also experienced great stress in adjusting to the demands of the post-Fordist production system that the company adopted. The management however ensured workers’ compliance of managerial orders by creating a fear psychosis among them. On the other hand, the Japanese Vice-President–– Manufacturing, “a strict Honda disciplinarian,” showed his cross-cultural insensivity while behaving with the workers and the officers which generated great deal of dissatisfaction among them. It is therefore, no wonder that the workers would organize themselves into a Union in order to fight the management. The workers succeeded in forming the Union despite management’s employment of various methods including ones described as unfair labour practices by the Industrial Disputes Act, 1947 to prevent the formation of the Union. The management then tried to thwart the unionization effort of the workers with the help of the Haryana government which ultimately resulted in the brutal lathi-charge of the workers by the Haryana Police force inviting widespread condemnation from different quarters. All this however strengthened the linkage between the Union and the Communist Party of India. This incident of large-scale violence had however shaken the top management of the subsidiary in a big way because this had affected the image of the company very badly. It was also concerned because production and sales had come down substantially in the wake of labour agitation centring around the issue of the formation and registration of the Union. Moreover, the company had also a big expansion plan for the future. Therefore, the worry for the top management was what strategy it should adopt to build a long term-cooperative relationship with the employees. There had been a substantial change in the management’s attitude towards the Union since then. It now discussed all worker-related problems with the Union and involved it in deciding several important employee-related matters. Simultaneously, it tried to strengthen the HR department by revamping and intensifying the training function and by creating a new post of Senior Manager in the department. It also tried to build up internal cohesion within the management and to improve the managers’ sensitivity towards people through training. Whether all this would ultimately lead to the development of a long-term cooperative relation between labour and management would however depend on the maturity of leadership on the two sides and the ability of the management to create a working environment through a set of highly inter-related HR policies which would reflect its two claimed fundamental beliefs: the respect for individual differences and the “Joy of creating” which it believed thrilled its employees. The latter however, would demand substantial changes in the structure and culture of the organization. Or in other words, human resource management in the organization would have to be guided by a definite strategy based on a particular set of assumptions about people. The moot question therefore, is whether the management would agree to these changes because this would among others require the management to accept a set of assumptions about people which are radically different from the ones which they had subscribed so long. Anil K. Sen Gupta Emeritus Professor—Human Resource Management Amrita School of Business Amrita Vishwa Vidyapeetham Coimbatore-641 105 VISION—The Journal of Business Perspective q Vol. 9 q No. 4 q October-December 2005