Business Communication Project

Division A, Group 1
Viswanath Anandarao
Kausthubh Kamath
Kavya Kella
Pawan Rai
Saurav Kumar
Varun Vaidyanathan
Yash Sinha

Maruti Suzuki Case Analysis

● Case Background
● Barriers Causing communication failure
● Common types of incivility in the workplace
● Conclusion

Background

Maruti Suzuki is one of the most successful companies in the Indian automotive industry. Started in
the early 1980s, it manufactured value-for-money cars like the 800, the Alto, the Omni, the Swift and
the Dzire at its plants in Haryana. In 2011-12 the company was hit by seven employee strikes that
seriously affected production, and the reputation of the company.

It all started when leaders of workers formed a new trade union called the MSEU in June 2011, and
the management tried to stop workers from joining it. MSEU leaders organized a flash strike and
raised key issues like low wages, incentive cuts and poor working conditions.

Over the next few months the situation repeatedly became tense again and again, as the company
blocked the formation of the new union, tried to make employees sign good conduct bonds,
continued to exert excessive work pressure, hired contract workers from outside, and paid no heed
to employee concerns. Finally in July 2012, over a year later, 500 workers were terminated, violence
broke out and a senior company official was burned alive.

As a result, in just 3 weeks, the company lost $550 million in market valuation and about 20% of its
sales. Waiting periods for some cars grew to 5 months. Competitors swooped in to take a bite out of
Maruti Suzuki’s massive customer base with every incentive they could think of.

Now, let us examine the barriers that caused communication failure and led to this situation.

Barriers causing communication failure

1. Organizational structure: There was a lack of an effective communication channel between

the management and the employees. The company bluntly fired or suspended workers
instead of trying to discuss and resolve the issues that they were facing. The workers raised
issues such as low wages, incentive cuts and poor work conditions, which were routinely
ignored by the management
 2. Differences in knowledge levels & lack of awareness: There was a lack of awareness at
the top management level about the happenings at the ground level. They were unclear
about the intentions of the union leadership. Also, there are differences in knowledge
regarding technicality of processes.

3. Cultural Barrier: The work culture followed in the company is complete japanese culture.
There are long working hours and very short breaks for the employees. The workers are not
used to this japanese culture. So, they felt over burdened. This also led to demand for wage
increment by workers.

4. Difference in status: The upper management and the workers belonged to different
classes of society and a communication barrier was created due to both the sides being
under the impression that the other side was least concerned about the outcomes and
decisions coming out from negotiations between them and hence remained adamant with
their agenda. The workers were keen on registering a new trade union MSEU and cited
several problems to raise their concerns whereas the management thought that the workers
were easily replaceable, obviously being under the impression that the work being done by
them did not merit the need of some specific skills.

5. Lack of trust: Leaders of workers who wanted to create MSEU and the upper management
who wanted them to continue with pro management union MUKU displayed several
instances of trust issues during the troubled times leading to creation of communication rift
between the two parties. The management during one of the negotiations demanded that the
workers sign a “good conduct” bond because they didn’t have much trust on the workers
and believed that they will again resort to violent tactics if left unscathed. Even during
previous negotiations when the management too back the dismissed workers, the workers
advocating for MSEU believed that the MUKU would not pay heed to their other demands
and continued raising their voices and opting for violence instead of constructive measures.

6. Closed communication climate: A closed communication climate is characterized by an

environment where communication is mostly restricted and behavior of the upper
management veers towards an authoritative style. This leads to the creation of
communication barriers and this type of closed communication can be seen in the case
through the fact that even after repeated negotiations the upper management did not
concede to the demands of the workers. This led to an increase in the degree of violence
being put into use by the workers but the management, instead of settling for truce, were
brazen in their admission of the fact that they are not going to recognize MSEU.

Common types of incivility in the workplace

1. Ignoring others: This type of behavior at the workplace creates a communication gap
between the two parties thereby resulting in poor morale, burnout and turnover. In this case,
the top management constantly ignored the laborers and their issues related to poor working
conditions, incentive cuts and low wages. This led to various strikes at the workplace by the
laborers and huge losses for the company instead the issue could have been resolved by
 talks and proper flow of communication.

2. Treating others without courtesy: The poor behavior of the upper management towards
the laborers made them feel insecure about their abilities, had a demoralizing effect on their
attitude towards the job and thus created a ripple effect throughout the company culture.
However, these could have been resolved in a healthy respectful way by open channels of
communication treating laborers with more dignity and respect listening to their demands.

3. Disrespecting the effort and time of others: This type of behavior at the workplace
creates a ripple effect of stress and conflict, thereby reducing productivity. In this case, the
dismissal and suspension of laborers without any appropriate disclosure of information
envisaged a feeling of disrespect among the laborers. Also, the management was reluctant
towards leaders of laborers who wanted to create MSEU and undervalued their efforts by
paying them low wages, appalling work conditions and incentive cuts.
4. Disrespecting the dignity and worth of others: Treating the people with dignity is one of
the most important things to human spirit. It means being valued and respected for what you
are and how you would like to be treated yourselves. In the case, both the labor union and
management showed disrespect to each other and none of the party valued the efforts made
by the other this led to an upset in increase of violence by the laborers and the top
management instead of entering into negotiations & recognizing MSEU laid off employees
involved in this activity disrespecting their efforts.

Conclusion

Maruti Suzuki has ignored the employee needs and fired the employees blindly without thinking
about repercussions. This kind of attitude created an inhospitable work environment, leading to a
divide between management and workers, and ultimately resulting in violence and death, not to
mention a large dent in company profits. So, the company should concentrate on the below points
for smooth functioning of plants:

● Manage emotions to engage in constructive communication

● Make efforts in understanding the message communicated by employees
● Choose the right medium of communication
● Employees and workers should have mutual trust and respect

Also, workers on their part should have maintained some degree of professionalism - there are many
legal and non violent ways of resolving issues. Efforts from both ends were needed to facilitate
effective communication.