Page 72 - DMGT519_Conflict Management and Negotiation Skills

Conflict Management and Negotiation Skills

Notes
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Case Study Crisis at Honda Motorcycles and Scooters India Ltd.

Introduction
Multinationals often make judgemental errors regarding cross-cultural issues and the
business environment prevailing in foreign countries. Honda Motorcycles and Scooters
India Ltd. (HMSI), a wholly-owned subsidiary of Honda Motor Company Limited, Japan,
established its plant in India in 1999 and made such mistakes in handling people -
management issues.

Recent clash between the Labour and Management of Honda Motors and Scooters India in
Gurgaon has once again brought back the bogey of strikes of socialist era. Everyone
including MNCs, government, economists and employers are skeptical of resurgence of
labour movement. If labour movement gets a new life, it can give a severe jolt to Indian
economy. Therefore, it is necessary to analyse the reason behind these events and curb the
nip in the bud.
The riot that followed the labour-management dispute in Gurgaon over the Honda
Motorcycle and Scooter India spat could be the first major sign of things to come. After a
decade-and-a-half of market friendly policy changes, the union seems to be sticking their
neck out again to ensure they are being heard. Some says the left parties in power are the
force behind this resurgence, the central unions disagree. They see the UPA government
in the Centre providing a major conducive environment for their woes to be heard. For
now, the battleground has been cleared and the soldiers are back home. A peace pipe is
being passed around and the warring factions appear momentarily happy to take a drag as
they put behind them the images of mayhem that hit the industrially flourishing Gurgaon-
Manesar region in Haryana. But behind the wall of silence, tremors can still be felt. The
question on everyone’s mind is how to ensure that what happened in Gurgaon does not
happen again.
Globalization and liberalization has forced government to give a serious thought to our
anarchic labour law, which makes our companies uncompetitive globally and discourages
foreign companies from investing in India. Indian labour laws are among the most rigid
in the world. In this scenario, Government recognized the need for increased flexibility in
Labour market, but they can not bring the policy of hire and fire approach, more so, since
the institutions of social security, particularly unemployment insurance, are not well
developed in our country. Therefore, structural reforms in labour laws must ensure the
welfare of workers. Reforming labour laws will boost industry and create more jobs.

Besides government, it is the responsibility of the employer to develop some well specified
procedures that must not create undue unrest among workers and whenever they need
more manpower, they should give a preference to the workers it is retrenching at present.
They should also introduce some Unemployment Insurance Schemes made by the
contribution of employees and employer.
The fact that the less rigid nations also have more efficient economies, and higher wages
and a smaller share of labourers who are long-term unemployed is not a matter of
coincidence. Given that the reform of labour laws is, contrary to popular perception, in the
interests of the workers, what government needs to do is let this topic debated and explained
so that workers, instead of opposing such reform, become its advocate.

Contd....

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