Maruti Manesar Plant - Case Report

-Submitted by, Group 4

MBA Section-B

Objective
The primary objective of this case study is to give a business, social and historical perspective and a brief
description of the causes for communication breakdown caused by communication barriers between the
workers and the management that led to the conflict at the Maruti plant Manesar.

Roadmap
1. Understand the background and formation of Maruti Suzuki

2. Working Conditions

3. Access the possible communication barriers that lead to criminal acts that occurred at the plant

4. Solutions/ Recommendation

Understanding the background and formation of Maruti Suzuki

 Maruti Suzuki India Limited is India's one of the major car manufacturers. The company has been a
premium player in the market since 1983. It has always aimed at delivering quality, affordability, and
maintaining growth in the market. It has covered almost every segment of the economy.
 July 2011 Event: The company attempted to prevent union formations which unfortunately resulted
in distrust and violence between various stakeholders being workers, and management. As a
consequence, the death of an executive led to massive negative media coverage. The sales and
brand value of Maruti took a significant hit afterward.

Working Conditions
The working conditions at the Manesar plant were difficult because of which they resorted to strike, as cited
by one of the workers with the following reasons:
 The eight-hour shift that they were supposed to work usually got extended by an hour.
 A seven-minute break was given for tea and using the bathroom.
 Taking leave became impossible as they deducted Rs.1,500 for every day on casual leave from their
salary.
 Once, they exceeded their targets by working more in the morning and evening, but they were not
compensated for that as they were paid Rs. 20 for every hour they worked extra.

Communication Barriers

● It was a customer-oriented company; respected the law, ethics, and human

beings, but things changed with the company's privatization. Indian director
was replaced by a Japanese director resulting in the transfer of control.
Organizational
● Lack of capacity and resources compared to the production at MSIL Plant,
Structure & Difference
so workers were pressured to work more. This information was not
in status
transferred from the managerial level to the workers.
● The management believed that all the workers should continue with the
existing union, whereas the workers wanted to form a new union altogether.

● Japanese tended to control Indian operations at Suzuki.

Culture & Language
● Differences in discipline, culture, punctuality & employee interaction.

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Hierarchical Barrier ● There was no healthy communication in the hierarchy.

● The company failed to address the workers' problems even after

Closed Communication negotiations, due to which the workers were raising their issues repeatedly.
● Dismissing and suspending the workers for raising issues.

● Workers were pressurized by the management against joining the new

trade union and were forced to join the pro-management Maruti Udyog
Unethical
Kamgar Union (MUKU)
Communication
● Overloading the employees with work without recognizing their need for
resources by the management.

● Lack of trust between the management and workers led to the formation of
a new union.
● Hiring contract workers rather than trusting their existing workers further
aggravated the problem.
Lack of trust
● Firing the permanent workers degraded the relationship creating extreme
distrust and negativity. MSIL coerced the workers to sign a "good conduct
bond." As the workers denied, the company started hiring contract workers
from other plants rather than addressing the grievances.

● Using strike as a medium to raise their issues rather than trying to

approach the situation in a more amicable manner.
Incorrect Choice of
● Even after forming the worker's grievance committee, they didn't use that
Medium
medium and still resorted to a strike for raising their concerns.

● The managers at the plant were indifferent towards the emotions of the
Lack Of Emotional workers and had a profit-centric mindset.
Intelligence ● The managers tried to bring the workers' confidence down and attempted
emotional hijacking.

Solution/Recommendations

 Managers should properly coordinate and give a common direction to employees even after the
transfer of control in the organization.
 There should be a fair policy in an organization that acts on both employees and supervisors.
Punishment should be applicable for the supervisor, too, for using a caste-based slur or any other
unethical practices.
 The company should listen to workers' demands and allow them to join unions as per their needs.
This will build confidence and trust among the workers and show the honesty of the management.
 Meetings should have been organized between managers and employees instead of opting for the
strikes as a communication medium.

References
https://www.business-standard.com/article/companies/maruti-s-striking-labour-problem-
111091500040_1.html

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