Labor Unrest at Maruti Suzuki India Limited

            

**This case was a Finalist in the 2013 Dark Side Case Writing Competition, organized by the Critical Management Studies division of the Academy of Management (AOM).

 
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Please note:

This case study was compiled from published sources, and is intended to be used as a basis for class discussion. It is not intended to illustrate either effective or ineffective handling of a management situation. Nor is it a primary information source.



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Case Details:

Price:

Case Code : HROB160 For delivery in electronic format: Rs. 500;
For delivery through courier (within India): Rs. 500 + Rs. 25 for Shipping & Handling Charges

Themes

Industrial Relations/ Collective Bargaining/ Ethics
Case Length : 17 Pages
Period : 2011-2012
Organization : Maruti Suzuki India Limited
Pub Date : 2013
Teaching Note : Available
Countries : India
Industry : Automotive

Abstract:

This case is about the labor unrest that occurred at the Manesar plant of India's largest car manufacturer, Maruti Suzuki India Limited (MSIL), the Indian subsidiary of the Japanese automobile maker, Suzuki Motor Corporation (SMC). The Manesar plant witnessed three labor strikes in 2011 and a lockout in July 2012 after the brutal murder of a General Manager (HR) at the company. The three strikes resulted in a revenue loss of Rs.25 billion to MSIL. The case details the events leading up to the gory incident in July 2012 which left one manager dead and more than 100 injured.

Human Resource and Organization Behavior | Case Study in Management, Operations, Strategies, Human Resource and Organization Behavior, Case Studies

The main points of contention between MSIL's management and its workers related to the formation of an independent union by the Manesar plant workers; contract workers being paid one-third the salaries as permanent workers despite both the groups performing similar tasks; and, the exacting rules at work such as half the salaries of workers being deducted if they were late to work by a few minutes. Though the primary responsibility for the July 2012 murder lay with the perpetrators, i.e. the workers, the case discusses the circumstances that led to the incident and questions whether it could have been averted. One of the thorny issues was the alleged buying out of the fledgling workers' union's leaders by the company. This case is meant for MBA students as part of the Industrial Relations curriculum. It can also be used in a Business Ethics curriculum.

Issues:

Understand the issues and challenges confronting organizations faced with labor unrest (strike action, etc.), collective bargaining, and relations with the union and workers.
Understand the dark side of contemporary capitalism and contemporary labor force.
Understand the reasons that compel workers to form unions and analyze whether companies, through their policies, can eliminate the workers’ need to constitute unions.
Discuss whether paying off unions helps the cause of the companies and workers in the long run.
Analyze how companies can really be competitive in the long run through better labor relations instead of engaging in labor cost arbitrage.
Assess the steps that companies’ managements can take to maintain harmonious industrial relations.

Contents:

  Page No.
Introduction 1
Background Note 2
A Strike...Dissidence? 2
The Workers' Grievance 3
A Basic Right 5
Right Cause, Wrong Means? 5
The Plot Thickens 6
Only an Temporary Truce 7
Another Truce and a Betrayal 7
Portend Wider Ramifications? 8
Picking Up the Pieces 9
Going for the Kill? 9
After Effects 10
Exhibits 12

Key Words:

Labor relations; Labor unrest; Strike; Lockouts; Organizing unions; Capitalism; Dark side; collective bargaining; Marxist theory; Moral Validity; Kant; Industrial relations strategy; Labor cost arbitrage; Wage Discrimination; Maruti-Suzuki

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