centercenterINDUSTRIAL RELATIONS CASE STUDY SUBMITTED BY ANINDITA BANERJEE ROLL NO 02 5TH SEMESTER MHRDM (2016 – 19) batch 2018 Anindita Banerjee BATA INDIA HR PROBLEMS – CASE STUDY 9500095000INDUSTRIAL RELATIONS CASE STUDY SUBMITTED BY ANINDITA BANERJEE ROLL NO 02 5TH SEMESTER MHRDM (2016 – 19) batch 2018 Anindita Banerjee BATA INDIA HR PROBLEMS – CASE STUDY BATA INDIA – INTRODUCTION Established itself in India in 1931, but started its operations in 1936.
5 production plants, 1500 retail stores and 27 wholesale depots. 15000 people employed in manufacturing and sales operation Sells around 60 million pairs every year. INCIDENTS WHICH IGNITED THE CASE STUDY In the Year 1995, First ever loss of Rs. 420 million. BSO restructured the entire board and sent team headed by Weston Changes in top management.
-Weston – Mike Middleton – R.Sennoner Calcutta headquarters building discussed to be sold for Rs.19.5 crore. Many departments shifted to Batanagar. Massive revamping exercise – stopped further recruitment. In the Year 1996, Company signed a bipartite agreement without any disruption of work.
(1993-1996)- Staff strength of Batanagar factory and offices was reduced to 6700. Chief Welfare Officer was assaulted, the three employees who were involved in violence, were dismissed. This was followed by a two day strike. Net profits of Rs.
41.5 million against revenue of Rs. 5.90 billion, 15% bonus were rewarded. In the Year 1997 Profits of Rs. 166.9 million on revenue of Rs.6.70 billion. Workers achieved 93% of the sales target. Announced 17% bonus as rewards.
Issues /Problems High cost structure and surplus labour. Unions now became more aggressive and demanding. Weston failed to strike a deal with All India Bata Shop Managers Union since 3rd quarter of 1997. In the Year 1998 Signed another bipartite agreement without the disruption of work.
Weston was severely assaulted by 4 workers at batanagar factory. In the Year 1999 BMU submitted their charter of demands to the management. A lockout was declared at Faridabad unit which lasted for 8 months. BMU was able to strike a deal, signed a 3 year wage agreement. Announcements were made to further cut costs. (Welfare costs).
In the Year 2000 A lockout was declared at Peenya factory in Bangalore, which lasted for 5 months. In September 2000, Bata was again on downward path which made Weston a worried man. Bata was heading towards a major labour dispute as BMU requested the West Bengal govt. to intervene in what it thought to be a major downsizing exercise. REASONS FOR DISPUTES Downsizing ruthlessly Change in Management – no inclusion of Indian members in the management Increase in Working Hours Change in Employment policy Demand of Union for workers participation in management Wage hike Sentimental issues MEASURES BY BATA THEN Bipartite agreements to resolve labour concern Signing of three years wage agreement that included fiscal benefits Payment of 4000/- per employee Management agreed to include 10% of 400 contract labours. INFERENCES The management failed to make any meaningful communication with the workers before making any decisions.
Bata had opened factories where trade unions and political parties had a very strong and negative influence. The interference of political parties ensures that the matters became violent and through which such parties could satisfy their own agenda. The company took drastic steps very frequently like lock down, retrenchments, downsizing. The top management only shows the benefits of the company and not the problems of workers. The workers were heavily influenced by trade union and had no logic in decision making.
Expatriates do not know about Indian culture and sensibilities of the Indian workers and hence the decision was not very beneficial. Instead of outsourcing 23 million pairs per year from China should have manufactured in-house. EXPLANATIONS FROM INDUSTRIAL RELATIONS PERSPECTIVE The approach followed by Weston was Unitary Approach – autocratic or paternalistic approach. Instead a Neo –Unitary Approach would have made the transition smoother. In Neo–Unitary Approach – INTEGRATES EMPLOYEES AS INDIVIDUALS INTO THE COMPANIES IN WHICH THEY WORK. THERE IS A SENSE OF COMMON PURPOSE AND SHARED CORPORTAE CULTURE.
In terms of Conflict Approach as well Pluralism rather SOFT PLURALISM AND JOINT CONSULTATION would have yielded better results. West Bengal being had more influence of Marxism (Communist Party of India, Marxist), there existed strong ideology of Marxism in the State Union (Class based bourgeois society). The capitalist structure of industry and of labour is closely connected with the pattern of class division in society. Inclusion of workers, transparent communication, trust building, could have helped Weston to bring in more positive impact.
For example in Automobile industry they followed Zero Inventory, JIT (Just in Time) however the change was systematic. Bajaj Automobiles also downsized however, they were not in news for negative impact, and rather they are studied as exemplary organization. TO CONCLUDE Weston might have been known as the “Turnaround” man. However doing transition is different in different places. The time, the environment and the culture of a place matters to bring positive change. Change management is a systematic process.
Change is never welcome in the first instance, there will be resistance. However if explained well, everyone to be impacted by change is involved and trust is built from day 1 of the process the change /transition yields positive impact. Weston had to leave the company because he knew his Authoritarian approach, did not yield result. He was unable to bring in positive results what he intended due to cultural mismatch. Might be told the PESTEL analysis went incorrect. However, Bata after getting into retail of their stores currently, are building up the best team in all functional areas.
Creating bench strength and building up capability for future growth Executive Development Plan. Bata shoe organization, as a multinational enterprise, has many experiences of investing abroad. Because of the complex political impact on international businesses, the Head/ Manager must carefully analyze the interactions between corporate policies and political environment and formulate strategies interacting with different political environments in order to maximize efficiency.
