Page 35 - DMGT519_Conflict Management and Negotiation Skills

Unit 2: Nature of Conflict

As we continue along the continuum, relationships deepen to friendship and finally love. Notes
The Conflict Continuum can be a useful gauge in assessing how and why we interact with others
in a certain way, and what stage we are at in terms of the levels of conflict we are experiencing
in our lives.
Above all, the Conflict Continuum is a reminder that the world of conflict is neither black nor
white, that many subtle gradations exist within it, and that we have the power and capacity to
choose and to alter our relationships in order to minimize the conflict and maximize the harmony
in our lives.

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Case Study Labour Unrest at Maruti Udyog Limited

Part A: Conflict
Introduction of the company
aruti Udyog Limited, a subsidiary of Suzuki Motor Corporation (SMC) of Japan,
manufactures cars in the 800cc-1600cc range. The commercial production started
Min December, 83. The installed capacity has been gradually increased to 350000
units per annum. During the fiscal year 2007-08, the production was 680,000 units. Maruti
has become the largest Asian car company (Outside Japan and Korea). In the first half of
2007-08, Maruti sold more cars in the Indian market than sold by Suzuki in the Japanese
market.
Even though there was no real competition and Maruti was the dominant player, it has
been regularly introducing new models to meet rapidly changing customer needs. Till
now 9 major models, namely Maruti - 800, Omni, Gypsy, Alto, Esteem, Swift, Zen Estilo,
SX-4, and Wagon R have been introduced.
Maruti’s contribution as the engine of the growth of the auto industry, indeed has its
impact on the lifestyle and psyche of an entire generation of Indian middle class. Maruti
has been instrumental in laying the foundation for strong vendor base in India. In
2000-01, J D Power, the reputed name in car market surveys, has rated Maruti as the
number one car company in customer service. It has noted that this is the first instance
anywhere in the world of a market leader topping in customer satisfaction as well. Shortly
after that, J D Power’s Quality Survey rated Maruti Esteem as the best mid -size car. Maruti
has maintained the position since then.
Maruti has identified Pre-owned car business, leasing and fleet management, Car insurance
and Auto finance as strategic areas of growth.
Source of Conflict
To motivate the workmen for higher productivity, in 1989, management introduced an
incentive scheme valid for 4 years and this was modified from time to time in consultation
with union. After expiry of the scheme on 31.03.1995, as no common understanding could
be reached with union, management introduced a revised scheme through notification on
01.01.1996, effective from 01.04.1995 for 4 years, and was implemented and accepted by the
workmen without any dispute.
As the scheme has lapsed on 31.3.1999, management has given a proposal of the revised
incentive scheme to be effective from 1.4.1999. When the initial incentive schemes were

Contd...

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