DIVYA DHINGRA 13020841013 CASE STUDY SOLUTIONS 1) There were huge IR problems that were boiling up at the TKM

plant. TKM was a joint venture between Toyota and the Kirloskar Group. This was the first plant that was set up by the company in India. What basically happened was that an indefinite lockout was announced at the Toyota Kirloskar Motor private Limited manufacturing plant on the 8th of January, 2006. The lockout happened mainly because of the agitations of the workers against the management for dismissing three of the workers. The decision of lockout was taking after three days of strike by the TKM labor union known as TKMEU. The major factor that led to the lockout was given as that the labor union did not gave a prior 14 days notice before going on for a strike. The lockout notice said that the workers were indulged in violence and destruction. The labor relations at TKM had a history of disturbance between the management and the workers. This disturbed sense of relations was very much clear by the fact that the plant already had three previous strikes: 2 in 2001 and one in 2002. Also the major IR Problem at TKM was that workers did not have the confidence in the working conditions provided at the plant. They blamed the management for not providing them safe equipment to work with. Moreover, the flexible work scheduled with overtime requirements had become a source of problem. On the part of management, they believed that the workers had turned violent and also misbehaved with those who did not participate in the strike. They also did not like the third party interference in the TKMs internal matters however the TKMEU got affiliated to CITU despite discouragement by the management. The management believed that there was a difference of opinion between workers and the management regarding the appraisal system. All these factors together contribute to the lockout at the plant. There is a lot that both management and the workers can do to avoid such problems in the future. First of all, they should talk in terms and enter into a negotiation. This was exhibited by the workers at TKM and the management when they negotiated on removing a clause from the agreement with management and the workers also agreed on keeping certain clauses in the agreement. Also both the workers and the management should together decide the policies. Overtime should be a volunteering thing rather than forcing everyone. There should be harmony between the two as they both are working for a common objective. Also the workers should put forward their complaints in an organised manner and also adhere to the reasons given by the management. In this way, they can prevent such incidences in the future.

2) The labor union, TKMEU played a significant role at the TKM plant in dealing with the management. They supported their worker and were with them at each and every step. The labor union tried to its fullest to establish its control and supremacy over the management. First of all, they protested against the shift system and the overtime, and then over the dismissal of the workers. They went on a strike due to which the company has to issue a lockout. Because of the dominance exhibited by the labor union, the management of the company was forced to make changes in the shift

system and hike salaries. Next despite the disagreement by the management over the affiliation with CITU, they entered into it once again trying to be dominant over the management. Also further in April-May 2005, the labor union demanded for a hike in salaries once again. The management agreed to their demands and approved a 15% hike in salaries. The Union always voiced the concerns of the workers be it be poor working conditions or long working conditions. In light of the case discussed, the labor Union could have acted in a more co-ordinated and sophisticated manner. They always showed their anger and aggressiveness to the management. They always went in for dominance. But at the end of the day, the continuous strikes and lockouts did not affected the management who always had back up of production and inventory. At the end the workers for whose good the labor union was working was at the loss. The three workers who were dismissed were never taken back in the company because of the violent and destructive behaviour shown by the employee union. If they would have talked in a subtle way, they could have negotiated for them. Collective bargaining is a concept very frequently used by the labor union in all companies. It is basically a process of negotiation between employer and employee to reach agreements that regulate working conditions. The interests of the employees are basically represented by representatives of trade union. The negotiations also deal with the terms and conditions of the employment. Collective bargaining make sure that both the parties reach consensus.

3) The labor disputes can have a tremendous impact on the foreign direct investment in India. People and companies generally come to India to set up their plants because they get cheap labor over here. Despite India being a destination for many large companies, the behaviour shown by the workers can harm the incoming revenues and employment. There are many instances that explains this that there such instances create a negative impact on the foreign direct investment. After the dispute that happened at the TKM plant, the analysts expressed their doubts about the Toyotas willingness for further investments in Karnataka. Also after getting familiar with the workers behaviour at workplace, they kept their options open of shifting their plant. All this forced Toyota to rethink its decision to setup a second manufacturing plant at Karnataka. Not only this, even other companies also think twice after hearing to all these news whether they should or should not enter India. All that happened at Toyota made it difficult for the Karnataka Government to attract other companies with huge potential like Volkswagen. The rise in the trade union activism in India resulting in violence, destruction and huge business losses has attracted a lot of media attention internationally in a negative sense. All these incidents made India visible in a poor light always. All this further leads to a loss in employment opportunities which would otherwise would have been created. According to scenarios prevailing in India, there is a great need for the reformation of the Indian Labor Laws. The Labor Laws need to be more liberal like they are in China. There is a lot of mismatch between the foreign and domestic production and management practices. Indian Labor Laws should be designed keeping in mind both domestic and foreign investors. Also, in India there is a requirement to support the labor unions through education and advocacy. The laws

must be made transparent and also heed should be paid to workers collective requirements. The workers should be given equal importance as management. In India, the laws are sometimes changes as per the convenience of foreign companies. This should not happen and workers should be informed about their rights. There is an immediate need to do away with this preferential treatments and should be given proper rights to voice their concerns.

4) Whatever be the management style, successful cross culture basically depends upon the capabilities of the manger to communicate effectively. Also, the Japanese management style was very much different from the Indian labor context. The Japanese people believe in getting down to work, they believe that building employee relations is a waste of valuable time. However in the Indian context, building healthy employee relations is a priority as it can leads to prolonged period of trust and confidence. Just because the Japanese system of management is successful, does not mean that it can be implemented in any country. India have always tried to inculcate others especially Japanese management style but has always been unsuccessful. Many of the new practices remain on paper without proper implementation. Japanese management culture requires at an employee to be available all the times, sharing information. However, the Indian people do not believe in always working. They believe in work life balance. So Japanese management style to a great extent is not suitable for the Indian labor. According to the situations prevailing, it is important that transnational corporations adopt the policies and practices of the country in which they are going to operate. It has become very important for them to become familiar with the socio cultural environment prevailing in the country. As an instance, the Japanese people believe in all work environment, whereas the Indian Labor wants work life balance. Therefore, it is very difficult to integrate the two. Such difference create a problem and mismatch between their thoughts. As a result, the workers do not work with their full strength, mind and soul for the organisation. It can also hamper companies profit levels overseas. Therefore they should localize their practices in the area where they are working.