Hmsi Case Analysis 4o6h3b

HMSI Case Analysis Group 5 Ankita Chakrobarthy Soham Barman Ipshita Goyal Pukhraj Jawanda Ritesh Jha Abhishek Srivastava

• HMSI was a wholly owned subsidiary of Honda Motors Company Limited Japan • Initial installed capacity : 100,000 scooters per year Scheduled to reach 600,000 scooters per year by 2005 • Union d to All India Trade Union Congress (AITUC) of the Communist Party of India • HMSI aimed to produce world class scooters and motorcycles which could bring a change in people’s everyday lives • Workforce consisting of regular workers, contract workers, trainees and apprentice

• Respect for the individual stemmed from initiative, equality and trust • Independence of spirit and freedom, equality and mutual trust • The Three Joys Philosophy : Joy of buying, Joy of Selling and Joy of Manufacturing

• Equality among all employees through similar uniforms and common dining area and canteen • Acclimatizing the employees about the ‘Honda Way’developing a way of thinking based on Honda Philosophy • Presence of a scientific and well defined Performance Management System for all employees • HMSI workers did not qualify for ESI scheme as their salaries were above the max. salary limit for coverage • The company covered these employees under its Paramount Healthcare Facility • Provision of Financial under special circumstances

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Authoritarian style of management Lobbying against registration of union leading to furore Termination & suspension of union leaders & workers Discontent over diwali bonus as compared to other industries

Question: Analyze this case in of the changing frames of reference in IR • Before the incident think the company thought they followed a Unitarist approach • However at the same time the workers are exploited and political help is taken to not let the Union get ed • The management does not takes steps to resolve the issue even during arbitration procedure • After the attitude of management takes a significant shift and suddenly becomes very friendly • Because of this the workers also take up the responsibility of the work they are performing thus improving the relations

Question: What do you think were the principal causes of the trouble that HMSI faced? • Management suppressing formation of unions • Ignoring the opinion of workers • Forcing the policies and procedures which were not employee friendly • No grievance management and Industrial relations expert • The attitude of Managers in the plant towards worker was not to the mark • Leave was not given even in the case when the relative of employee was not well

Question: What HRM strategy and business strategy were followed by HMSI? • The company they followed a Unitarist perspective • Organization is perceived as harmonious – ‘one big happy family’ • Unitarism has a paternalistic approach where it demands loyalty of all employees • The Three joys philosophy comes out of this perspective • Although the organization wanted to follow this strategy the Managers in the plant followed something exactly opposite Toyotism

Question: What led to the failure of its strategy? • Enforcement of systems like g of ‘movement sheet’ while going for break, no granting of leaves in case of sever circumstances also • Lack of sympathy and respect for workers in senior management • Philosophy of ‘’Three Joys’’ was not actually being practised in the management • Employees did not derive happiness from their daily work due to the strict rules imposed upon them

Question: If you were HMSI’s CEO, what HR strategy would you have followed in the pre-fiasco situation? • Having a qualified IR Manager to resolve the labour issues • Bringing a change in the managerial style & introducing team work & collaboration- through training, workshops, simulations etc.

• Introduce Job rotation so that no worker has a reason to complain about the work load • Make the Holiday policy more friendly to the workers • Remove the time keeping mechanism which was in place • Realize that the policies that are working in Japan may not work in India. Modify policies so that they are more acceptable in the Indian context

Question: What are the key challenges before HMSI in the postJuly 25 scenario? • • • • •

Sales fell down Public Image took a beating HMSI could not reach the target production Expansion plans cannot be realised because of this incidence There was an entire loss of trust between the labour & management and it is a challenge to win this back • The possibility of a repeat of the fiasco was still high; but there was no mechanism (a dedicated IR system) to prevent it

Question: What people-mgmt. strategies should HMSI adopt in short run & long run?

In the Short Run: • Proper grievance management system should be in place • Take the Union into confidence by resolving issues quickly • Setting up a dedicated Industrial Relations team • Hiring experts from outside the company • Building IR talent from within the company

In the Long Run: • Building a culture where employees are encouraged to speak up and openness is valued • Proactively handling issues • Proper training and Job rotation should be in place to create a fair image among the workers

Question: What lessons in people management and IR do you learn from this case? • In today’s scenario with high levels of unemployment and increased competition, neither the worker nor the employer wants a sticky situation: understanding this can help both sides avoid sticky situations • It is important to be proactive rather than reactive in labour management • It requires a collaborative approach and NOT confrontationist approach to solve IR issues • HR training to be given to all the line managers • Co-operation between top level management & workers • Soft skill training to be imparted to all line managers

Thank You! 