Honda Hr Case!
m 407-065-1
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PEOPLE MANAGEMENT FIASCO IN HONDA MOTORCYCLES AND SCOOTERS INDIA LTD
At the onset of 2006, the president of Honda Motorcycles and Scooters India Ltd (HMSI), who was also its chief executive officer, had to make some radical decisions on a number of issues confronting the company following the July 2005 altercations with its workers. Not only did he have to repair the damage to the companyís image, but he also had to develop a strategy for long-term co-operation with its employees. As he reflected upon the bitter memories of the last twelve months, he wondered if the company could achieve targets laid out in the aggressive expansion plan developed before the unrest. This included tripling the Gurgaon plantís production capacity to 0.6 million motorcycles and 1.2 million two-wheelers by the end of fiscal 2007ñ2008.
Neither he, nor perhaps any of the members in his managerial team, could have imagined that workersí seemingly minor grievances would turn into a war-like situation, as they did in July 2005. The company, despite all its efforts, had not been able to prevent the union formation, that too with an affiliation to All India Trade Union Congress (AITUC), which was the trade union wing of the Communist Party of India. With the events taking a nasty violent overtone, the adverse publicity might have done perhaps irreparable harm to the public image of the company. In addition, the drop in the companyís sales was also worrying. The company had suffered a production decline resulting in a loss of Rs 1.3 billion1 as a consequence of the strike and go-slow tactics by the workers, especially during the months of May and June 2005. But there was much more at stake than just the monetary loss. While choosing the companyís logo of the
[pic]
PEOPLE MANAGEMENT FIASCO IN HONDA MOTORCYCLES AND SCOOTERS INDIA LTD
At the onset of 2006, the president of Honda Motorcycles and Scooters India Ltd (HMSI), who was also its chief executive officer, had to make some radical decisions on a number of issues confronting the company following the July 2005 altercations with its workers. Not only did he have to repair the damage to the companyís image, but he also had to develop a strategy for long-term co-operation with its employees. As he reflected upon the bitter memories of the last twelve months, he wondered if the company could achieve targets laid out in the aggressive expansion plan developed before the unrest. This included tripling the Gurgaon plantís production capacity to 0.6 million motorcycles and 1.2 million two-wheelers by the end of fiscal 2007ñ2008.
Neither he, nor perhaps any of the members in his managerial team, could have imagined that workersí seemingly minor grievances would turn into a war-like situation, as they did in July 2005. The company, despite all its efforts, had not been able to prevent the union formation, that too with an affiliation to All India Trade Union Congress (AITUC), which was the trade union wing of the Communist Party of India. With the events taking a nasty violent overtone, the adverse publicity might have done perhaps irreparable harm to the public image of the company. In addition, the drop in the companyís sales was also worrying. The company had suffered a production decline resulting in a loss of Rs 1.3 billion1 as a consequence of the strike and go-slow tactics by the workers, especially during the months of May and June 2005. But there was much more at stake than just the monetary loss. While choosing the companyís logo of the