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A Popular HR Chief Burned to Death: People Management Dynamics at the Indian Subsidiary of Suzuki Ltd  
Product Ref: 15/566C Company: Maruti-Suzuki Ltd.

Product Type: Case Industry: Automobiles & Components

Related Product(s): Teaching Note
Authors: Debi S. Saini   
Senior management and human resource professionals in MNCs may inadvertantly cause disaster due to their indifference towards regional human resource and cross-cultural issues. Maruti-Suzuki India Limited (MSIL)¡Xa subsidiary of Suzuki Motor Corporation, Japan¡Xmade these apparent mistakes at its Manesar plant, which was added in 2007 to the existing Gurgaon plant. The Gen Y workers at the Manesar plant perceived working conditions to be stressful, work schedules unreasonable and supervisors as indifferent. These employees were internet savvy and conscious of employee rights and they decided to form an independent trade union in May 2011. Senior management¡¦s resistance and indifferent attitude created bitterness in industrial relations. But the workers ultimately succeeded in registering their union in February 2012 after striking three times.

The tensions resulted in unexpected violence and the tragic burning of the plant¡¦s human relations chief, as well as injuries to 96 executives, both Japanese and non-Japanese. The lockout that resulted lasted 34 days, causing production losses of INR 25 billion, and the consequent discharge (termination) of more than 500 core workers. MSIL abolished the contract labour system. Instead, it began to employ temporary workers for seven months and regularly replaced them with fresh temporary workers. In May 2014 the parent company further tightened its control on MSIL and took away executive powers from the top three Indian executives including the corporate heads of Human Relations and Operations.

Several strategic HR interventions proved ineffective in improving employee engagement. MSIL is in a dilemma about the use of hard or soft HR intervention techniques. It is also introspective: what caused the tragic death of the plant¡¦s HR head; how could such events be prevented in the future; how should it tackle permanent versus temporary hiring issues; how should it deal with cross-cultural issues in the present change dynamics; how should it promote workers¡¦ engagement; and how can it align its HR strategy with its business strategy?
Functional Area : Human Resource Management

Learning Objective: 1. To identify factors which determine failure of an HR strategy.
2. To know why and when workers (especially, Gen Y) may decline to cooperate in IR.
3. To understand cross-cultural complications resulting from the practice of excessive ethnocentrism in people management by an MNC.
4. To examine the powers, role, interests, and function of the Indian state in IR.
5. To understand issues in workers¡¦ engagement for a ¡¥high performance work system.
6. To appreciate the lessons one can learn from the dynamics of labour-management power dances and struggles.
Length: 20 pages Country: India

Pub. Year: 2016 Level of Difficulty: 3
This product type is available in the following language(s):      English
Related Information: N/A
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