Contract Workers' Strike at Hero

Honda's Gurgaon Plant

Once again Gurgaon has become the centre of workers' unrest following the strike at Hero Honda's
Gurgaon plant. Around 4,000 casual workers of Hero Honda were on strike from 10 April 2006
against the anti-worker stance of the management that had ignored the demands of the workers for a
long time. The main demands placed were wage hike, job regularization, extra casual leave and
medical benefits at par with the permanent workers.
In fact, around 4000 contract workers of Hero Honda's Gurgaon Plant (owned by Pawan Munjal)
were denied regularization for the last 7 to 8 years. A contractual Hero Honda worker is paid between
Rs. 4000-6700 per month as against Rs. 40,000, the salary of a permanent worker performing the
same job. Rs 10 is deducted daily for food and tea only from the casual workers' salary. The three
major contractors who operate in the Hero Honda Gurgaon plant include the Sehgal brothers and
workers recruited by them not only get low wages but also do not receive any pay slip or cards. The
casual helper at the plant gets a meagre Rs. 2000-2500 at the end of the month. The management
and the contractors are equally involved in the exploitation of the contract worker.
There is no union in the Hero Honda unit, but the casual workers of the company unanimously
decided to protest and braving all kinds of threats and machinations by the management, they
determinedly continued with their strike.
Finally, the administration and the management were forced to come to the table. On 14th April, a
tripartite meeting was held between Haryana's additional labour commissioner, management and
worker representatives and they agreed for a settlement, under which some demands were met with
and on the rest, talks will continue. It was an important victory for the contract workers, who are
otherwise forced to live in miserable conditions. The agreement included a 30% hike in salary, two
days of casual leave every month and medical benefits in accordance with the company rules,
issuing identity cards and ATM cards and opening bank accounts for the casual workers. The
management also agreed to pressurize contractors to address some of the genuine grievances of the
contract workers. The management agreed to review the situation at the earliest and look specifically
into the demand for abolition of contract labour and their regularization.
AICCTU expresses solidarity with the movement waged by the casual workers of Hero Honda's
Gurgaon unit and welcomes the fighting initiative taken against the repressive management of Hero
Honda especially after the brutality meted out to the struggling Honda Motorcycle (HMSI) workers in
the recent past. It is truly commendable that the workers have not lost courage to challenge the
hideous nexus of the private entrepreneurs, state administration, and labour contractors, particularly
in Gurgaon. Their fight for economic rights and their initiative to unionize reflect the spirit of working
class offensive against the shrinkage of workers' rights and democratic space for struggle in the era
of liberalization, privatization, and globalization.
Company overview:

Hero MotoCorp is the World's single largest two–wheeler motorcycle company. Honda Motor
Company of Japan and the Hero Group entered a joint venture to setup Hero Honda Motors Limited
in 1984. The joint venture between India's Hero Group and Honda Motor Company, Japan has not
only created the world's single largest two-wheeler company but also one of the most successful
joint ventures worldwide.

During the 80s, Hero Honda became the first company in India to prove that it was possible to drive
a vehicle without polluting the roads. The company introduced new generation motorcycles that set
industry benchmarks for fuel thrift and low emission. A legendary 'Fill it – Shut it – Forget it'
campaign captured the imagination of commuters across India, and Hero Honda sold millions of
bikes purely on the commitment of increased mileage.

Over 20 million Hero Honda two wheelers tread Indian roads today. These are almost as many as the
number of people in Finland, Ireland and Sweden put together. Hero Honda has consistently grown
at double digits since inception; and today, every second motorcycle sold in the country is a Hero
Honda. Every 30 seconds, someone in India buys Hero Honda's top selling motorcycle, the
Splendour. This festive season, the company sold half a million two wheelers in a single month which
is a feat unparalleled in global automotive history.

Hero MotoCorp Ltd. (Formerly Hero Honda Motors Ltd.) is the world's largest manufacturer of two –
wheelers, based in India. In 2001, the Company achieved the coveted position of being the largest
two-wheeler manufacturing Company in India and also, the ‘World No.1’ two-wheeler Company in
terms of unit volume sales in a calendar year. Hero MotoCorp Ltd. continues to maintain this
position till date.

Vision

the vision of a mobile and an empowered India, powered by its bikes. Hero MotoCorp Ltd.,
company’s new identity, reflects its commitment towards providing world class mobility solutions
with renewed focus on expanding company’s footprint in the global arena.

Mission

Hero MotoCorp’s mission is to become a global enterprise fulfilling its customers’ needs and
aspirations for mobility, setting benchmarks in technology, styling and quality so that it converts its
customers into its brand advocates.

In order to fulfil its mission, The Company will provide an engaging environment for its people to
perform to their true potential. It will continue its focus on value creation and enduring relationships
with its partners.

Strategy

Hero MotoCorp’s key strategies are to build a robust product portfolio across categories, explore
growth opportunities globally, continuously improve its operational efficiency, aggressively expand
its reach to customers, continue to invest in brand building activities and ensure customer and
shareholder delight.

Hero’s Corporate Social Responsibility (CSR) platform revolves around three flagship initiatives – the
‘Ride Safe’ program, empowerment of the girl child, and the ‘Happy Earth’ program for the
environment.
The Company’s Ride Safe program, which has been recognized by the Ministry of Road Transport
and Highways of the Government of India, has seen participation from over 100,000 people,
including students, teachers, police personnel and Hero customers.

The ‘Hamari Pari’ (Our Angels) program, which recognizes the ability of girls to become agents of
social change, has already benefited over 100,000 adolescent underprivileged girls through financial
assistance, motivational sessions, and guidance camps.

The ‘Happy Earth’ program aims to protect, conserve, restore and optimally use environmental
resources through various initiatives including tree plantation drives, water conservation programs
and conservation of wildlife.

Manufacturing

Hero Honda bikes are manufactured across three globally benchmarked manufacturing facilities.
Two of these are based at Gurgaon and Dharuhera which are located in the state of Haryana in
northern India. The third and the latest manufacturing plant is based at Haridwar, in the hill state of
Uttarakhand.

Technology

In the 1980’s the Company pioneered the introduction of fuel-efficient, environment friendly four-
stroke motorcycles in the country. It became the first Company to launch the Fuel Injection (FI)
technology in Indian motorcycles, with the launch of the Glamour FI in June 2006. Its plants use
world class equipment and processes and have become a benchmark in leanness and productivity.
Hero MotoCorp, in its endeavour to remain technology pioneer, will continue to innovate and
develop cutting edge products and processes.

Products

Hero Honda's product range includes variety of motorcycles that have set the industry standards
across all the market segments. The Company also started manufacturing scooter in 2005. Hero
Honda offers large no. of products and caters to wide variety of requirements across all the
segments.

Product range of the company includes:

 CD Dawn
 CD Deluxe
 Pleasure
 Splendor +
 Splendor NXG
 Passion PRO
 Passion Plus
 Super Splendor
 Glamour
 Glamour PGM FI
 Achiever
 CBZ Extreme
 Hunk
 Karizma

Distribution
The Company’s growth in the two wheeler market in India is the result of an intrinsic ability to
increase reach in new geographies and growth markets. Hero MotoCorp’s extensive sales and
service network now spans over to 5000 customer touch points. These comprise a mix of authorized
dealerships, Service & Spare Parts outlets, and dealer-appointed outlets across the country.

Brand

The new Hero is rising and is poised to shine on the global arena. Company’s new identity “Hero
MotoCorp Ltd.” is truly reflective of its vision to strengthen focus on mobility and technology and
creating global footprint. Building and promoting new brand identity will be central to all its
initiatives, utilizing every opportunity and leveraging its strong presence across sports,
entertainment and ground- level activation.

Performance Highlights of FY19-FY20

Market share:

 FY20 Indian two-wheeler market share: 35.7%

 FY20 Indian motorcycle market share: 51.9%

Total Income

 Rs. 34,342 crores in FY19

 Rs. 29,614 crores in FY20

PAT

 Rs 3,385 crore in FY19

 Rs. 3,633 crores in FY20

EBITDA

 Rs. 4,930 crores in FY19

 Rs. 3,958 crores in FY20

Environment and Social

 CSR Spend: Rs. 131 crores

 Lives Impacted: 68.5 lakh
 Water Recycled/Reused: 3.29 lakh kl
 Trees Planted: 7,16,000

Industry overview

The Automotive Industry is comprised primarily of the world’s largest passenger automobile and
light truck manufacturers. Through broad dealership networks, most members of the industry sell
vehicles in the global market, covering developed and emerging countries. Automotive
manufacturers offer a variety of makes and models, though there tends to be limited brand
integration at the marketing, advertising, and dealership levels. The bulk of these companies operate
production facilities in multiple geographic
The automobile industry in India is the world’s fourth largest. India was the world's fourth largest
manufacturer of cars and seventh largest manufacturer of commercial vehicles in 2019. Indian
automotive industry (including component manufacturing) is expected to reach Rs. 16.16-18.18
trillion (US$ 251.4-282.8 billion) by 2026. The industry attracted Foreign Direct Investment (FDI)
worth US$ 24.5 billion between April 2000 and June 2020 accounting for ~5% of the total FDI during
the period according to the data released by Department for Promotion of Industry and Internal
Trade (DPIIT).

Domestic automobile production increased at 2.36% CAGR between FY16-FY20 with 26.36 million
vehicles being manufactured in the country in FY20. Overall, domestic automobiles sales increased
at 1.29% CAGR between FY16-FY20 with 21.55 million vehicles being sold in FY20.

Two wheelers and passenger vehicles dominate the domestic Indian auto market. Passenger car
sales are dominated by small and mid-sized cars. Two wheelers and passenger cars accounted for
80.8% and 12.9% market share, respectively, accounting for a combined sale of over 20.1 million
vehicles in FY20.

Overall, automobile export reached 4.77 million vehicles in FY20, growing at a CAGR of 6.94% during
FY16-FY20. Two wheelers made up 73.9% of the vehicles exported, followed by passenger vehicles at
14.2%, three wheelers at 10.5% and commercial vehicles at 1.3%.

The electric vehicle (EV) market is estimated to be a Rs. 50,000 crore (US$ 7.09 billion) opportunity
in India by 2025. Several technology and automotive companies have expressed interest and/or
made investments into the India EV space. Auto companies such as Hyundai, MG Motors, Mercedes,
and Tata Motors, have launched EVs in the market. A recent study conducted by Castrol found out,
most of Indian consumers would consider buying an electric vehicle by the year 2022. The study also
highlighted for an average Indian consumer, price point of Rs. 23 lakh (or US$ 31,000), a charge time
of 35 minutes and a range of 401 kilometers from a single charge will be the 'tipping points' to get
mainstream EV adoption

The Government aims to develop India as a global manufacturing and research and development
(R&D) hub. It has set up National Automotive Testing and R&D Infrastructure Project (NATRiP)
centres as well as National Automotive Board to act as facilitator between the Government and the
industry. Under (NATRiP), five testing and research centres have been established in the country
since 2015. NATRiP’s proposal for “Grant-In-Aid for test facility infrastructure for Electric Vehicle (EV)
performance Certification from NATRIP Implementation Society” under FAME (Faster Adoption and
Manufacturing of (Hybrid) and Electric Vehicles in India) scheme was approved by Project
Implementation and Sanctioning Committee (PISC) on January 03, 2019.

The Indian Government has also set up an ambitious target of having only EVs being sold in the
country. The Ministry of Heavy Industries, Government of India, has shortlisted 11 cities in the
country for introduction of EVs in their public transport system under the FAME scheme. The first
phase of the scheme was extended to March 2019 while in February 2019, the Government
approved FAME-II scheme with a fund requirement of Rs. 10,000 crore (US$ 1.39 billion) for FY20-
22. Under Union Budget 2019-20, Government announced to provide additional income tax
deduction of Rs. 1.5 lakh (US$ 2146) on the interest paid on the loans taken to purchase EVs.

EV sales, excluding e-rickshaws, in India witnessed a growth of 20% and reached 1.56 lakh units in
FY20 driven by two wheelers.
The Government of India expects automobile sector to attract US$ 8-10 billion in local and foreign
investment by 2023.

Overview of topic

The term conflict refers to perceived incompatibilities resulting typically from some form of
interference or opposition. Conflict management, then, is the employment of strategies to
correct these perceived differences in a positive manner. negotiation is used when two
people have a similar objective in mind but both people conflict on how the objective is
reached. Conflict resolution is a way to quell these conflicts and ensure the objective is
met. Conflict resolution can take various forms, even passive kinds, such as avoidance of
the issue when one person allows the other to make the ultimate decision
Conflict managing strategies in negotiation

1) Use Thomas and Kilmann conflict handling strategies in negotiation: Thomas and Kilmann
identified a conflict-handling grid comprised of five conflict management styles based on two
dimensions: assertiveness and cooperativeness. Assertiveness is the motivation of an individual to
achieve his/her own goals, objectives, and outcomes, while cooperativeness assesses the willingness
to allow or help the other party to achieve its goals or outcomes. Any of the five conflict resolution
styles might be appropriate based on the circumstances of the situation and the personalities of the
individuals involved.

1. Avoiding Conflict Resolution Style. The avoiding style is low on both assertiveness and
cooperativeness. In other words, the party “A” is not very cooperative in helping the other
party that is party “B’ to achieve their goals, but neither is the party ‘B’ aggressively making
efforts to pursue their own preferred outcomes in the situation. The original problem,
conflict, or situation is never directly addressed or resolved. However, avoiding behaviour
might be appropriate when the issue is perceived by the party ‘A’ to be trivial. It might also
be an appropriate approach to use when there is no chance of winning or when disruption
would be very costly.

2. Competing Conflict Resolution Style. The competing style of resolving conflict is also known
as the win-lose approach. A party using this style, is characterized by high assertiveness and
low cooperativeness. In this style, the other party seeks to reach his/her own preferred
outcomes at the expense of other individuals. This approach may be appropriate when
quick, decisive action is needed, such as during emergencies. It can also be used to confront
unpopular actions, such as urgent cost cutting.

3. Accommodating Conflict Resolution Style. This style reflects a high degree of

cooperativeness. It has also been labelled as obliging. A party using this style subjugates
their own goals, objectives, and desired outcomes to allow other individuals to achieve their
goals and outcomes. This behaviour is appropriate when people realize that they are in the
wrong or when an issue is more important to one side than the other. This conflict
resolution style is important for preserving future relations between the parties.

4. Compromising Conflict Resolution Style. This style is characterized by moderate levels of

both assertiveness and cooperativeness. Compromise can also be referred to as bargaining
or trading. It generally produces suboptimal results. This behaviour or style can be used
when the goals of both sides are of equal importance, when both sides have equal power, or
when it is necessary to find a temporary, timely solution. It should not be used when there is
a complex problem requiring a problem-solving approach.

5. Collaborating Conflict Resolution Style. This approach, high on both assertiveness and
cooperativeness, is often described as the win-win scenario. Both sides creatively work
towards achieving the goals and desired outcomes of all parties involved. The collaboration
 style is appropriate when the concerns are complex and a creative or novel synthesis of
ideas is required. The downside of this approach is that the process of collaborating
mandates sincere effort by all parties involved and it may require a lot of time to reach a
consensus.

From the above strategies to manage conflicts in negotiations, we can say that, from the five modes
described in the matrix, only the strategy employing collaboration as a mode of conflict
management in negotiation breaks free of the win-lose paradigm.

It not necessary that every negotiation will have a win-win outcome. For instance, in a conflict
centred on bids by two alternative suppliers, the best choice might well be a competing strategy
with a winner and loser. After all, the objective in such a situation is to win the contract for one's
own company. In most cases, winning the contract can be accomplished only at the expense of the
competing supplier, who by definition becomes the loser.

In contrast, a competing approach almost never works well in the interpersonal conflict of people
working in the same office (or even the same organization). Unlike the case of competing suppliers,
co-workers, both the winner and the loser, must go on working together.

Indeed, in many conflicts revolving around office politics, an accommodating strategy may actually
enable individuals to strengthen their future negotiating position through allowing themselves to
lose in conflicts over issues they do not feel particularly strongly about. In such situations,
accommodating can be seen as a form of winning through losing. For instance, a manager may
choose to concede an issue to an employee who is experiencing considerable stress as a means to
motivate him or her. Similarly, an individual might choose an accommodating strategy to add
balance to negotiations in which one's counterpart has already had to give up several other points.
Indeed, a winner in a win-lose scenario who fails to put forth some effort to accommodate the other
party may even provoke a backlash in the form of lack of commitment or open resistance.

Even the traditional approach of conflict avoidance has its place as an occasionally acceptable
strategy in negotiation. While conflict avoidance has justly been the subject of considerable
condemnation, it can be rather useful in allowing both parties to cool off or in buying time until all
the facts of a matter have been gathered. For example, A party “A” might choose to avoid the other
party ‘B’ that is on strike in the throes of an emotional outburst, for example, until the part ‘B’ has
had sufficient time to calm down and stop the strike.

Finally, compromise is often a useful strategy when dealing with relatively small concerns. This
differs from an accommodating strategy, in which the conceding party finds an issue unimportant
that the opposing party considers comparatively important. A manager might enlist a compromise
approach most effectively when both parties consider the issue to be of moderate or little
importance. In such cases, compromising saves both parties the time required to employ problem-
solving techniques to address the fundamental core of the conflict.

While all of these modes have their place among the strategies available to the parties while
resolving conflicts in negotiation, the collaborating approach to conflict management represents the
most beneficial mode for most types of conflict management. In the collaborating mode, conflict
itself acts as a managerial tool. The manager utilizes the conflict to guide the conflicting parties to
address what essentially are obstacles faced by the organization. Through collaborative behaviour,
the conflicting parties pool their creative energies to find innovative answers to old problems.
It is in this key respect that the collaborative mode of conflict management differs from the other
four conflict-handling modes. Accommodating, avoiding, competing, and compromising, as
permutations of the win-lose scenario, are simply forms of conflict interventions. Collaboration as a
conflict-handling mode, on the other hand, represents an attempt to channel conflict in a positive
direction, thus enabling the manager to use conflict as a tool to resolve otherwise incompatible
objectives within the organization. In other words, this method of handling conflict acts less as a
conflict intervention and more as true conflict management.

However, any of the five conflict resolution styles may be appropriate and effective depending on
the specific situation, the parties' personality styles, the desired outcomes, and the time available,
the key to becoming more prepared is to understand the advantages and disadvantages of each
method.

2) Understand what type of negotiator is your opponent

Type of negotiator
Competitive negotiator
Traits of the negotiator
Competitive negotiators are
highly results-driven. They are
focussed and assertive in their
communication and can
become aggressive. They will
have little time for pleasantries
and will jump straight into the
nitty-gritty of the negotiation.
How to win
If you are unsure about your
negotiation ability, it might be
best to ask whether another
member of your team can
lead. You need strong and
confident negotiators to go up
against a competitive
negotiator.
Stalling the negotiation
process can work to your
advantage. Competitive
negotiators usually want to
close the deal quickly, so
stalling the negotiations could
lead to them offering
concessions they would not
have otherwise offered.

Compromising negotiators Compromiser negotiators do Take your time negotiating.

what is fair for both parties.
They would rather settle with
less in order to satisfy the
other party’s needs. Watch
out, they often rush
negotiations and make large
concessions.
The compromiser usually
wants to close the deal as
quickly as possible, therefore
they may make a concession.
This will work to your
advantage.
Stick to your guns. The
compromiser will usually be
the first to concede.
Don’t give in to the idea of
splitting the difference until
you have explored all the
alternatives.

Collaborative negotiator Collaborative negotiators are Stick to your guns.


Avoider negotiator
open and honest. They try to
understand the concerns of
the other party and aim to find
creative solutions to mutually
satisfy both parties. They may
explore many different
possible avenues to do this.
Avoider negotiators strongly
dislike conflict, so will try to
dodge negotiations by any
means possible. They may be
seen to pass responsibility on
to other team members or
avoid the negotiation situation
altogether.
Collaborative negotiators like
to find solutions and
alternatives, but if you don’t
leave room for manoeuvre,
they won’t be able to play to
their strengths.
Give the other party clear and
defined mini deadlines at the
beginning of the negotiation
process. This should stop the
other party stalling throughout
the negotiation process.
Start the negotiation as early
as possible. Therefore, if the
other party stalls the
negotiation by avoiding, you
should still have time
available.

3) Use Borisoff and Victor identify five steps in the conflict management strategies:

Borisoff and Victor identify five steps in the conflict management process that they call the "five A's"
of conflict management: assessment, acknowledgement, attitude, action, and analysis. They assert
that these five steps allow for a sustained, ongoing process of problem-solving-oriented conflict
management.

1. ASSESSMENT
 In the assessment step, the parties involved collect appropriate information regarding the
problem. The parties involved also choose which of the conflict-handling modes is most
appropriate for the situation. The parties collectively decide what is and what is not central
to the problem. The parties involved also indicate areas in which they may be willing to
compromise, and what each party actually wants.

2. ACKNOWLEDGEMENT.
 The acknowledgement step is one in which each party attempts to hear out the other.
Acknowledgement allows both parties to build the empathy needed for the motivation of a
synergistic solution to the problem. The acknowledgement acts as feedback to the other
party and it demonstrates that one understands (without necessarily agreeing with) the
other party's position. Acknowledgement goes beyond merely responding to what is said,
however; it involves actively encouraging the other party to openly communicate its
concerns. This is aided by the use of active listening techniques and overt, nonverbal
encouragement.
 3. ATTITUDE.
 The attitude step tries to remove the foundation for pseudo-conflict. Stereotypical
assumptions about different, culturally-based behaviours are uncovered. For example, a
member of a high-context culture may misinterpret what a member of a low-context culture
says as being needlessly blunt or even rude. Conversely, a member of a low-context culture
may misinterpret what a person from a high-context culture says as being needlessly indirect
or even outright deceptive. Such communication variations (as the works of Edward Hall
have explained) have little to do with the actual intent or content of the messages, but
represent instead culturally learned approaches to using implicit versus explicit
communication styles. Similarly, in the attitude step, one acknowledges differences in the
way that men and women are generally conditioned to communicate. Experts such as
Borisoff and Merrill, for example, have delineated clearly differentiated communication
styles between men and women, which are compounded by sex-trait stereotyping regarding
issues of assertiveness, interruptive behavior, and perceptions of politeness. Finally, in the
attitude step, one analyses potentially problematic variations in styles of writing, speaking,
and nonverbal mannerisms. Such differences may blur meanings. It is the role of the
effective conflict participant to maintain an open mind toward all parties involved.

4. ACTION.
 The action step begins to actively implement the chosen conflict-handling mode. If the
selected mode is the problem-solving approach, the manager conveys the opportunity for a
conflict resolution based on trust and ongoing feedback on those points on which the parties
have already agreed. Simultaneously, each individual evaluates the behaviour of the other
parties (often, little more than subtle hints) to ascertain where potential trouble spots might
arise. Also, each individual must remain aware of his or her own communication style and
general behavior. Finally, all parties must stay alert to new issues that are raised and look for
productive solutions.

5. ANALYSIS.
 In this last step participants decide on what they will do, and then summarize and review
what they have agreed upon. Part of the analysis step is to ascertain whether every
participant's requirements have been addressed (and met, if possible). Finally, the analysis
step initiates the impetus for approaching conflict management as an ongoing process.
Analysis enables participants to monitor both the short-term and long-term results of the
conflict resolution.

Problem in the case: