Toyota Kirloskar Motors: Labor Unrest and Crisis

Management

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Author: K R Radhika, Pravat Surya Kar

Pub. Date: 2023
Product: Sage Business Cases
DOI: https://doi.org/10.4135/9781529611724
Keywords: crisis management, labor, workers, India, management, stakeholders, organizations, students,
automobile industry, employment relations
Disciplines: General Business & Management, General Business & Management, Business & Management,
Human Resource Management (general), Human Resource Management, Managing Conflict
Access Date: August 23, 2023
Publishing Company: SAGE Publications: SAGE Business Cases Originals
City: London
Online ISBN: 9781529611724

© 2023 SAGE Publications: SAGE Business Cases Originals All Rights Reserved.
Sage Sage Business Cases
© Radhika K R and Pravat Surya Kar 2023

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Resources

Appendix 1: Recent Cases of Labor-Management Conflict

in the Indian Auto Sector

Honda 2019: Labor unrest and strike at Honda’s Manesar plant in November 2019. The plant manufactured
motorcycles and scooters. Around 2,000 workers went on strike as the management had sacked 300 contract
workers. The company had labor issues in 2001, 2006, 2009, 2010, 2016, and 2019, and the cumulative loss
was estimated to be INR 4,800 million (Business Standard, 2019).

Mahindra & Mahindra: In May 2009, the workers at Mahindra’s Nashik plant went on strike in protest over
the suspension of a union leader. The suspension was on disciplinary grounds, and the strike was resolved
within two days of the cancellation of the suspension. The company faced similar issues in 2013. The total
estimated loss for both of those labor suspensions was estimated to be INR 4 billion (Economic Times, 2019).

Maruti Suzuki: Suzuki India Limited had a prolonged strike and labor issues in 2000 when workers demanded
a hike in wages, incentives, and pensions. This discord went on until 2012 (Patel, 2019).

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Royal Enfield & Yamaha: The workers at Yamaha’s Chennai plant went on strike in 2018 after the suspension
of a few workers. A similar strike occurred in 2019 at Royal Enfield because management had transferred the
union members across India (Kaveri, 2018).

Appendix 2: Production System – The Toyota Culture

Toyota is renowned for its customer dedication and quality products. The company has adopted a quality sys-
tem known as the Toyota Production System (TPS), which reflects a commitment to customer satisfaction,
product quality, and safety through continuous improvement. In the TPS, employees have roles in which they
have key responsibilities to detect problems and rectify them as soon as possible (Graphic Products, n.d.).
The TPS focuses on cost reduction, improved efficiency through waste minimization, and improved return on
investment (Monden, 2011).

The TPS production process uses agile and lean orientation; i.e., flexibility, adaptability, reduction in waste,
decentralization, and efficient labor management with a human touch. Accordingly, the company employs
various quality tools and techniques like Kaizen (continuous improvement), Poka-Yoke (mistake proofing),
and Just in Time (JIT) inventory. The idea of Lean and JIT is to assemble the vehicle quickly and efficiently
and rapidly deliver it to the customer (Toyota, 2021). The philosophy of the TPS is “Happiness for all,” which
includes all the stakeholders. The company maintains an elevated level of health and safety standards for
employees and adopts good working practices (Toyota, 2021b). The TPS made Toyota successful and is a
global manufacturing benchmark (Lee & Jo, 2007).

In the success of the TPS system, control over labor is critical; the system studies every movement of the
workers and tries to eliminate all unnecessary movements (such as walking around) from job performance.
Although this system is renowned, the employees in emerging countries where it is used complain of high-
er job-related stress levels than do those workers in developed countries (FrontLine, 2014). Accordingly, this
system (at least in India) prefers to use contractual workers over regular ones (Association, A. I, 2021).

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Appendix 3: Managerial Concerns of the Automobile In-

dustry in India

The managers in the automobile industry in India were facing the following challenges. Each of the bulleted
points is segregated under temporal types.

Short Term

• There was a global shortage of semi-conductors.

• The deadline for adopting fuel efficiency and BSVI Phase-2 regulations was round the corner.

Medium Term

• There was a challenge of ensuring sustained demand.

• The managers were challenged on how to increase affordability via localization of production.
• The industry lacked a long-term regulatory roadmap (Business Line, 2021).

Long Term

• There was a high labor shortage and productivity losses (Indian Auto Sector, 2020).
• There was a challenge of upskilling the workforce for automation (IBEF, 2021).
• There was a growing trend of app-based commuting impacting the sale of passenger cars (Bureau,
2021).
• Reinventing the organizational structure from a traditional vertical and functional structure with a
clear hierarchy to an agile one. The purpose of this reinvention is to help employees build capabilities
for future job roles and business objectives (Kinsey, 2021).

Appendix 4: A Comparison of Japan and India (Hofstede

Insights)

The following table compares Japan and India in terms of work culture and society using a 6-D model with six
different dimensions of culture and a score out of 100.

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India Japan
Dimensions of culture (out of (out of
100) 100)

Power distance: “the extent to which the less powerful members of institutions and organizations within a country
77 54
expect and accept that power is distributed unequally”

Individualism: “the degree of interdependence a society maintains among its members” 48 46

Masculinity: “a high score (masculine) on this dimension indicates that the society will be driven by competition,
56 95
achievement, and success”

Uncertainty avoidance: “the extent to which the members of a culture feel threatened by ambiguous or unknown sit-
40 92
uations and have created beliefs and institutions that try to avoid these”

Long-term orientation: “how every society has to maintain some links with its own past while dealing with the chal-
51 88
lenges of the present and future”

Indulgence: “the extent to which people try to control their desires and impulses” 26 42

Notes
Country Comparison - Hofstede Insights (www.hofstede-insights.com/country-comparison/india,japan/)

Appendix 5: Interactive Planning

Interactive planning: Interactivists do not wish to return to the previous state, settle for the current state,
or anticipate or accept the future. They believe in creating the future. Interactive planning is a process that
weaves the threads into one. It is a participative method of dealing with problems. It has three principles:

• Principle of participation (all stakeholders participate in the planning process) implies that no one
person can plan efficiently and effectively in organizations. Interactive planning will enable all the or-
ganization members to understand the organization and help them serve the organization to attain
the goals effectively.

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• The principle of continuity (planning must not be static but dynamic) believes that no matter how
carefully drafted the plans are, they must be continuously reviewed to avoid failure. This review re-
quires structured monitoring, evaluation, and modifications of plans in intervals.
• The holistic principle (take a systems approach in the planning process) demonstrates the impor-
tance of planning simultaneously and interdependently across all departments and levels of the or-
ganization. The last principle is based on the principle of coordination and integration.

The projects that have adopted interactive planning are successful as all the stakeholders have participated
in the planning process. Thus, the stakeholders’ commitment is assured, leading to success in the project or
activity (Flood & Jackson, 1991).

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