1: Role of manager and union?

There had been consistent struggle for management control in the company between the two
partners owing to its monopoly status and high profitability till recent past. SMC could exercise
significant influence over MUL management through negotiated transfer of technology.

Management was keen to reduce labor cost per car.

Management agreed to increase average cost to company per employee to Rs. 33767 this would
mean an extra burden of Rs.600 million per annum.

Management insisted that only those employees who signed an undertaking of not taking part in
strikes or protests would be allowed entry into the factory. By October end more than 500
employees signed the undertaking.

The workers union, Maruti Suzuki workers’ union, objected to the suspension and demanded that
Jiyalal be reinstated. The company’s management met with union members present in the
conference room attacked the company senior management with chairs and rods broke cars and
burned the HR office.

The sequence of events began with a worker beating up a supervisor on the shop floor. The
workers’ union prevented the management from taking disciplinary action against the worker.

They blocked the exit gates and held the executives hostage.

To resolve the issue amicably, members of the senior management met the union. During the
talks, the workers attacked the senior management.

Among the injured were 40 of the company’s senior managers. Awanish Kumar Dev, General
Manager (HR) at Manesar plant, succumbed to burn injuries.

Union demanded withdrawal of the “good conduct” notice before negotiating on other issues.

Union asked for reinstatement of all the employees who were either suspended or removed.

Union asked for improved incentive scheme.

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2: Who are the actors in this case and who influencing the industry relation
system?
Actors of the case:

 Management team of Maruti.

 Workers.
 Trade Union.
 Haryana Government.

Employer Employees
Government Rules,
Awards, Policies

Industrial Relations

Usages, Customers, traditions

Employers’ Associations Within a country Trade Unions

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3: According to Dunlop’s Theory and write the four quadrants?

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4: Obtaining a good conduct bound is proper approach or not?
The Maruti-Suzuki violence of July 18th, 2012 had its inception with a failed negotiation
between the union leaders and the representatives of Management over the removal of a
suspension order. There was also the added anguish of the workers in being made to sign good
conduct bonds.

The good conduct bond required the workers to declare they would “not resort to go slow,
intermittent stoppage of work, stay-in-strike, work-to-rule, sabotage or otherwise indulge in any
activity, which would hamper normal production in the factory

written statement in the Lok Sabha, Kharge had said: "Demanding of good conduct bonds from
workers as per conditions before allowing them to resume work is an arbitrary act and it also
amounts to unfair labor practice as given in the Industrial Disputes Act, 1947".

However the exercise of the good conduct bond had been justified by the Maruti Suzuki
Management as being in compliance with the Standing Orders of the company and that the
respective State government had approved the draft of the Good Conduct Bond before
implementation. Herein lays the contradictions of the politico-legal framework. Moreover the
plant has been encountering severe quality problems in recent times and alleged it to worker
sabotaging.

The company had not allowed the workers to enter the company premises unless they signed the
“Good Conduct Bond” as the company had found workers knowingly degrading the quality and
quantity of the units produced.

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5: Engagement of outsourcing of automation in this scenario is correct approach?
Outsourcing model in Maruti was correct approach or not?

Many automotive companies today are spending more time and money on operational issues, and
not spending enough on strategic developments. Application outsourcing allows companies to
free up valuable resources. In addition, by moving to a more industrialized model in a centralized
low-cost country for the service, funds generally can be quickly released to help pay for
investments in larger transformation programs. Alternatively, companies can ask one supplier to
manage both elements (both the maintenance and the transformation), as another possible way to
move ahead of the competition in strategic areas of high added value.

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The two critical criteria on which the decision hinges are whether the purported loss of
capabilities, relationships or infrastructure are business critical, and whether these are
irrecoverable.

Business critical capabilities are those capabilities absence of which can easily kill a business in
medium term. Likewise we can define the business critical relationships and infrastructure.

In region A:

where any of these – capabilities, relationships or infrastructure – are business critical, you will
have to manage the outsourcing relationship very carefully to make sure that that a slight misstep
from your service provider does not cause massive repercussions in your business. Logistics
outsourcing, IT outsourcing and many other outsourcing arrangements fall under this category.
On the other hand, irrecoverability refers to the cost of developing these capabilities,
relationships or infrastructure from scratch, once they are lost.

In region C:

Where these costs are prohibitive, in general you would not like to lose these capabilities,
relationships or infrastructure, and hence create an arrangement where you retain some stake in
these.

Of course if the situation is such that the loss is both businesses critical and irrecoverable, you
will find it easier to retain ownership of such capabilities, relationships and infrastructure. Hence
it will not be advisable to outsource in such circumstances – as shown in region B.

Finally, there will be situations where the loss of capabilities, relationships or infrastructure is
neither business critical, nor irrecoverable as shown in region D. Then, it is easy to make a
decision to outsource and reap benefits from what outsourcing provides.

While there are often no clear cut answers, the above matrix serves to provide useful decision
making guidelines. Outsourcing can be made to work in a great majority of cases. However,
equally it can fail because of a predisposition against outsourcing. There is no point blaming the
service providers, or the practice of outsourcing itself. If the predisposition is against
outsourcing, it may well be due to poor management of the process in the past.

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5: Whether strong union is necessary? Why union? Why strong union is essential?
A labor union is an organization that acts as an intermediary between its members and the
business that employs them. The main purpose of labor unions is to give workers the power to
negotiate for more favorable working conditions and other benefits through collective
bargaining.

Union help set the standards for education, skill levels, wages, working conditions, and quality of
life for workers. Union-negotiated wages and benefits are generally superior to what non-
union workers receive. Most union contracts provide far more protections than state and federal
laws.

Unions are associated with higher productivity, lower employee turnover, improved workplace
communication, and a better-trained workforce. There is a substantial amount of academic
literature on the following benefits of unions and unionization to employers and the economy:
Economic growth.

The principal purposes of a labor union are:

(1) Negotiate wages and working condition terms.

(2) Regulate relations between workers (its members) and the employer.

(3) Take collective action to enforce the terms of collective bargaining,.

(4) Raise new demands on behalf of its members.

(5) Help settle their grievances

Strong Union:

Strong Unions are mass organizations of the working class whose primary role is to achieve the
common demands of their members. They are fundamentally defensive organizations. A good
union can not only improve workers' lives, win more leisure time and a better standard of living,
they can also change governments and make very significant changes across society.

A union sets goals for itself in tune with the aspirations of its members, but it can only
accomplish what the majority of its members are willing to support. The goals of the unions are
generally confined to the following areas:

1. Issues of Respect
2. Wage & Benefits
3. Hours Worked
4. Working Conditions

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7: What’s role played by government?
The Haryana govt. true to its character played the role of a big bully & reiterated its total
commitment to neo liberal reforms by going to the extent of banning the strike and placing the
labor department completely at the disposal of the company.

Taking a tough stand against the ongoing agitation at Suzuki's Indian entities, the Haryana
government Wednesday declared the strike illegal and initiated process to cancel registrations of
unions at Suzuki Powertrain and Suzuki Motorcycle.

Since the strike has been declared illegal, the police have been given the power to evict the
workers from the factory.

MUEU wrote the state governor for an enquiry into the death of two employees and requested
him to cancel dismissal and suspension orders issued by the management against some
employees.

The government officials stated that MUL was a professional run company. The dispute should
have been resolved by management itself.

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8: Growth rate in income and expenditure before strike? Explain.
As we can see from income and expenditure statement:

From 1990-1998

Their sales keep an increasing exercise from increasing rate than after 1996 from decreasing rate.

They are also receiving good amount of interest and dividend which keeps an increasing till
1998.

Profit after for which belongs to company also increases till 1998 that means through their
market share went down they are earning profits.

Through EPS i.e. earnings per share we can calculate the growth rate of the company and MUL
is distributing dividend to its shareholders at increase rate till 1998.

In year 1998-2000 it was same as previous year.

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