A Story of 5 Isolated Curses

How Blunders Brought

Organizations to Their Knees
01
HOW HR

02
CRASHED
TOYOTA: 9
MILLION
ENRON'S
OUTOFCONTR
OL GAS PEDALS
BANKRUPTCY:
HAZARDS OF A
03
PUPPETEERED HR ROOTS OF A
HR TEAM VIOLENT UNION
PROTEST:
HONDA’S
04
MISHANDLING UK'S PHONE
OF EMPLOYEES HACKING
SCANDAL 05
‘HIGHLIGHTS ONE ROGUE
NEED FOR HR TRADER & THE
ETHICS’ DEMISE OF A
233 YEAR OLD
BANK
Hi there,
October is often a month of mythological significance in India, a country renown for some of our world’s greatest
epics. During this time, the story of Ramayana stands strong despite the years, holding importance to a majority of
the country. In it, Rama valiantly battles chief-antagonist Ravana in a war to rescue Sita, the former’s wife.

And while it’s true that Rama slew Ravana, the mighty Asura King, few know of his death as a culmination of several
curses heaped upon him throughout his years alive. Not only did these curses cause his death, it led to the complete
elimination of all his descendants.
Here are some of the strongest proponents of his death:

01 The Curse of Raghuvansh Anarnay

Majestic king from Raghuvansh, Anarnay met Ravana in fierce battle when the latter set out to conquer the
world. Although the mighty king lost his life, he’d managed to curse Ravana. It ascertained the Asura King’s
death in the hands of a man born in Anarnay’s lineage. Rama took birth in said lineage.

02 The Gatekeeper’s Curse

Majestic king from Raghuvansh, Anarnay met Ravana in fierce battle when the latter set out to conquer the
world. Although the mighty king lost his life, he’d managed to curse Ravana. It ascertained the Asura King’s
death in the hands of a man born in Anarnay’s lineage. Rama took birth in said lineage.

03 The Sister’s Curse

Everyone knows Shrupnakha, the disfigured sister that led to Sita’s kidnapping. But the story starts at
Vidyutjinn, Senapati of the Kalkay Army and husband to Shrupnakha. Ravana fought and killed the man in
his conquest of the world, and the Asura King’s sister cursed that she herself would become the reason for
Ravana’s death.
It showed that no matter how powerful a king, a kingdom crumbles with him. There are exceptions to the rule, of
course. But you get the point. HR functions in a similar manner, as a metaphorical backbone to the organizational
body. It reverberates that the smallest misstep on their end could echo devastating aftereffects.

We have a couple of companies that suffered the consequences of the same. And in this season of festivity, we say,
“No matter how good the present, remain vigilant of the future.”

Flip the pages. You’ll know what we’re talking about.

01
HOW HR CRASHED
TOYOTA: 9 MILLION
OUTOFCONTROL
GAS PEDALS
Ignorance is bliss. But
negligence surely is not!
And the Japanese automobile giant, Toyota learnt it the hard way.
Once looked upon as a benchmark of quality and standard in the
automobile manufacturing industry, they became the butt of
increasing mechanical failure cases from 2009 to 2010.
Unintended acceleration and foot pedal entrapment were cited to
be the major reasons, which resulted in one of the costliest recalls in
the history of automobile industry [1]. But the root of the problem lay
elsewhere. Somewhere along the lines, questions were raised about
the quality of employees working in Toyota. After all, it’s the
employees who make or break a company.
It is believed that a spell of carelessness shrouded the vision of the
HRs and blind folded them completely. Rather than rewarding
managers for maintaining the quality of product, they were
rewarded with incentives for containing the cost of production and
overlooking flaws.
The Faux Pas That Emerged
Due To HR’s Negligence
Rewards and recognition policies that are meant to steer the
onboard professionals towards better performance, while
maintaining work ethics and standards of the company, not
vice-versa.
Lack of proper training did not channelize the talent and skills of the
employees on the constructive path.
Hiring mistakes were fueled by poorly framed recruitment and
assessment structure. This eventually resulted in hiring of individuals
who were prone to sweeping problems under the rug. [2]
9,000,000
Moles of HR department’s managerial negligence
ended up raising a mammoth mountain of technical
failure in Toyota automobiles. More than 9 million
cars had to be recalled from across the globe.
Little carelessness here and little negligence there, in the heads of HR management started getting reflected in
Toyota’s crashing reputation in the market.

For an automobile company like Toyota, where quality of product matters the most, the management decided
to compromise it on the contrary. Mechanical failure in about 9 million cars is not a technical accident, but a
big human resource accident.

The evil of carelessness that corroded the name and fame of Toyota keeps floating in the air. Before it gets on to
your nerves, nip it in the bud itself with corrective measures and a lesson from this HR goof-up story.

NIP THE EVIL IN THE BUD, BEFORE

IT GETS TOO LATE LIKE TOYOTA
02
ENRON'S BANKRUPTCY:
HAZARDS OF A
PUPPETEERED HR
TEAM
Enron Corporation, founded in the year 1985 would have never
imagined its success story to take such an abrupt dip in a span of
mere 16 years. Yes, the ‘rags to riches’ story of America's
prominent energy giant took no time to become the ‘riches to rags’
story of the biggest bankruptcy recorded in history.
They say your deeds row the boat of your fate, and you reap what
you sow. If you plant cactus, you cannot expect mangoes growing
in your garden.
The way Enron kept implanting accounting frauds in its financial
books, it’s no wonder that it had to face bankruptcy in 2001. The
magnitude of Enron scandal not only brought under scanner the
audit and accounting manipulation, but also the blunders that HR
department should be held guilty for.
HR Practices That Catalyzed Enron’s
Downfall-
Corporate ethics were not enforced on high- level executives of the
company and were imposed only on the employees. Rules were not
uniform for everyone.
Even after being an institution of significant decision making
powers, HR department acted like a puppet, controlled by the
senior management. Simply taking orders from it and not having
any say in anything.
The responsibility of putting forward interests of the employees was
not well taken care of. Also, it failed in becoming a strong
communication channel between the senior management and
employees.
Last but not the least is letting gangrene of corruption spread to the
entire organization. [3]
Accounting fraud, plus insemination
of inappropriate entrepreneurial
work culture and values led to the
birth of largest bankruptcy case
witnessed ever.
The house of cards that Enron was constructing under the illusion of $55 billion, as per their faulty financial
books, took no time to come down. The largest bankruptcy of history ruined thousands of lives that were
employed with it.

Its downfall also led to the dissolution of Arthur Andersen, one of the world’s five largest audit and
accountancy partnerships that handled Enron’s auditing too.

We hope that crux of the lesson has reached you quite well. Let us now move on to the third story quickly…

STAY AWAY FROM THE COBWEB OF

CORRUPTION. ENRON HAS ALREADY PAID
HEAVILY TO GET RID OF IT!
03
HR ROOTS OF A
VIOLENT UNION
PROTEST: HONDA’S
MISHANDLING OF
EMPLOYEES
Honda Motorcycles and Scooters India (HMSI) was always a
happy place to work at, since its inception. But things took a turn for
the worse, when its workers minor grievances eventually turned into
a war like situation in July 2005.
The company despite its efforts had not been able to prevent the
formation of a workers’ union with the support of All India Trade
Union Congress. The management’s inability to react in time
resulted in irreparable loses and harm to the company’s public
image, along with a massive drop in production and profit.
Eventually the company ended up reporting a loss of INR 1.3
billion, due to the fiasco.
Surprisingly, the human resource policies of HMSI were aligned
with the philosophy of its parent company, HMCL that branded
itself as a unique organization with distinctive employment and
production practices.
The three joys promoted by the company were the joy of using
world class products, the joy of selling world class products and the
joy of making world class products.
The conflict with HR
The conflict arose due to the low quality of gifts distributed on
Diwali. The inefficiency of the management and HR, combined with
the growing unrest among the employees eventually led to the
formation of a union protesting against the management practices.
Other resentments included introduction of movement sheet’s, which
restricted and timed the employees breaks to go to the toilet or to
drink water. Workers were also often asked to attend to more than
one machine simultaneously, which soared the stress levels even
more.
The workers also perceived that managers showed partiality in
matters related to job postings, which aggravated the issue. The
employees wanted these posts to be filed on the basis of seniority,
but management paid no heed to it. [4]
This breakdown of communication between the top-level
management and its employees revealed the inability of the human
resource department to mitigate the problem.
Cases of biasness by the managers, restriction
of movement, and communication gap
The state administration and the state police got involved in one of India’s most brutal
between the senior management and
confrontation, which ended in with over 700 injured workers. 70 of them suffered serious
employees created a mayhem at Honda
injuries.
Motorcycles and Scooters India .

As an outcome of the struggle, all union office bearers and senior management staff were
trained by the HR department on building cooperative industrial relationships.

MORE YOU SUPPRESS EMPLOYEES,

STRONGER THEY SHOT BACK! NOTHING
BETTER THAN LEARNING FROM HONDA.
04
UK'S PHONE
HACKING SCANDAL
‘HIGHLIGHTS NEED
FOR HR ETHICS’
Being greedy is not wrong, till the time you cross limits and intrude No efforts were made to bring ethical standards and structure. Not
into other’s space! No law has entitled you with the liberty to even advices were given to the leaders, in order to incorporate a
interfere in the personal matters of any individual on this planet. change in the existing workplace culture. [6]

But, few news organizations believe in flouting this norm to lay

hands on the most secretive information, using inappropriate
measures. News International’s phone-hacking scandal scatters News International scandal revealed
light on one such case. The news organization was accused of the unethical practice of phone hacking
hacking phones, bribing police and exercising unfair influence to and how personal information of
hunt down stories. prominent figures were leaked out.

The investigations into the matter excavated out cases, wherein

News International hacked phone of celebrities, members of the
British Royal Family, politicians, and even murdered schoolgirl The outcome of the entire scandal was a public outcry, tailed with a
Milly Dowler. The organization dismissed such claims initially, but list of major and high- profile resignations that followed. The entire
later on admitted them. [5] episode marred its prestige and name in the market.

From the owner of News International, Rupert Murdoch to its chief

Where Did The HR Department Go Wrong? executive Rebekah Brooks, the series of resignation severely hurt
The major blame that came on the HR management was of the management structure of the company.
promoting a carefree culture and workplace behavior. Employees
did not value the corporate ethics in the organization. To be more
RESORTING TO UNETHICAL MEANS
specific- ‘’whatever it takes’ culture was prevalent throughout!
LIKE NEWS INTERNATIONAL WILL
NEVER TAKE YOU FAR IN LIFE!
05
ONE ROGUE
TRADER & THE
DEMISE OF A 233
YEAR OLD BANK
Barings, one of Britain’s oldest merchant banks is one of the
alarming reminders of why a strict surveillance on the
accountability of every employee is necessary, to avoid disasters.
Founded in 1762, the 233-year-old bank was single handedly
brought down by one of its employee named Nicholas William
Leeson, a derivatives trader.
Leeson was hired in the settlements department of Baring Securities
London as a clerk, but was quickly transferred to Baring Futures
(Singapore) as a trader. Eventually, he was appointed as the
assistant director and general manager of BFS. [7]
HR mistakes that put the organization’s
existence at stake
Allocating different powers to different employees ensures a proper
check on the functioning of every department in the organization.
But on the contrary, all the powers were handed over to a single
person. This little mistake cost the entire company the biggest loss
that it had ever witnessed.
There were no checks done on the powers that Leeson
independently exercised, until the entire scam was exposed.

This allowed him to have a fuller control, not only over the front
office, but back office too, which was handling all the paperwork.
Under the ambush of this authority, he very conveniently hid his
unauthorized trading and losses in the error account 88888.

Handing over all the significant powers

The account was initially opened to report trade errors made by
to Nicholas William Leeson brought
inexperienced staffs. The losses eventually piled up to over £827
down the glory of Barings, a 233 years
million in debt for the bank, and it was declared insolvent in 1995.
old Britain bank.
The demise of a 233 years old bank raised major concerns worldwide. An investigation led by the Chancellor found that it was
the failure of the people management department. Leeson was allowed to police himself with full authority, and as long as the
profits kept showing, the higher-ups were more than happy to let him stay.

The Barings collapse perfectly illustrated the need to have a disaster management and risk assessment team in every
organization, which could plan for different catastrophic scenarios, with the help of different prevention systems and controls.

The collapse of Barings remains a crucial chapter in Britain’s financial history.

EXCESS OF EVERYTHING IS HARMFUL, SO

BE IT ALLOCATION OF POWERS AS DONE BY
THE BARINGS BANK.
A PARTING NOTE
At the end of all things great exist a ton of learnings that spur necessary changes for
improvement. There’s a lot to learn from Ravana’s downfalls. His missteps, if
appropriately calculated, could’ve probably prevented his death even. After all, for
much of his negative qualities, the demon king possessed just as many – if not more
– positive attributes.

Errors in the HR Department, or any department for that matter is inevitable. The
difference lies in all the aftereffects that follow. When it comes to HR, it makes sense
to be better prepared. That’s why organizations like us exist. To create a stretch of
solutions or preparations that attempt to fix many of the more common loopholes.

You could spur that change also. Ask yourself if there’s anything glaring enough to
cause an explosion of problems if left unchecked. Steady your organizational ship
to weather the storm.

Ours is merely a single source of information. Seek more. At the end of the day,
what you do with said information rests in your hands alone.

Hope you enjoyed the festivities

of Dussehra. Godspeed.
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