What The Maruti Suzuki Strike Exposes – 2

While teaching at a management institute I mapped the images of a union leader and an HR manager through an exercise. The class and I were surprised to discover that they had used all negative [actually, very negative] words to describe a union leader. One of the students who had some previous work experience was more surprised than all of us – he candidly disclosed in the class that he had met a union leader who was a very conscientious person and a good leader, and yet he had found that the negative words were his immediate recall.
And one more shock came thereafter. I was expecting the MBA-HR students to have all good words for HR managers; I was in for a shock! The students also discovered that they had all described an HR manager in negative terms, hardly any positive!!
Such images in their minds represented how a common man sees them, and it is undoubtedly disturbing.
In the last twenty five years, many MNCs have set us their shop in India or have increased their presence. They come with their HR policies – one of the policies which are unstated yet very explicitly understood is ‘No union here.’
The aversion to unions is everywhere and Indian entrepreneurs are no exception. But perhaps they accept the reality more easily than their foreign counterparts. Even if entrepreneurs accept the fact that the right to association is a fundamental right in this country, they find ways of keeping things under control by playing with the employees’ right of association. With corrupt union leaders this result can be achieved without much problem. And with political leaders [most of them self-styled] who also double as union leaders, the managements can deftly handle the situation. This variety of political leaders cum union leaders and manoeuvring managerial personnel are both available in abundance in the corruption capital of this country.
Maruti Suzuki factories are situated in that region.
What really prevented Maruti Suzuki from dealing with a new union if it was having an effective membership in the Manesar plant? Unit level unions are very common in India. While the employees would do well if they have a common union, and indeed having different unit level unions creates more problems for both the employees and managements alike, it is really a question for them to decide and not for the management. In our society with its strong fissiparous tendencies it may be unavoidable, at least in the short run.
When a union knocks at the door organisations get into ‘Control’ mode. Poor HR managers find themselves in a tough situation because their bosses tend to judge their effectiveness by their ability to keep the union at bay. They adopt some familiar measures: 
[a] call employees who have reportedly gone to the union leader and talk to them about how their interests are best served by the current management; how the management is responsive to sorting out all their grievances, 
[b] initiate ‘town hall’ or ‘open house’ meetings to reach out to employees. Simultaneously measures are taken to keep the union out by reaching the union people through some intermediaries. The worth of reaching out to employees is well placed but recognised a little too late.
What should be the organisation’s stance on unions? How many make clear statement on it anyway? I have always felt that the most mature statement on an organisation’s stance on unions comes from Toyota. Here it is: [ref The Toyota Culture by Jeffrey Liker and Michael Hoseus, Tata McGraw Hill]:
1. Managing Toyota Way and establishing a Toyota culture is not negotiable.
2. The local management should establish a stance toward labour unions, taking into consideration local culture, laws, labour movements and so on.
3. If the management of the company does have a union, both should recognise that the prosperity of the company is the common objective and both must use thorough communication in order to resolve any differences of opinions and build a healthy relationship of mutual trust.
4. The relationship of mutual trust can ensure the long term prosperity of the company and thereby stabilise employee lives by maintaining and improving working conditions.
In the ‘Summary’ [page 386] the authors state “ In a sense, Toyota agrees with the argument of the union advocates that fair and consistent management is essential and managers of work groups cannot be counted on to always act in a fair and consistent way. There needs to be mechanism for all employees to be heard. Being heard is the foundation of the Toyota culture of continuous improvement. So, Toyota sets up mechanisms through the HR department to allow team members to be heard. We saw that even the HR department can be viewed as biased. The counter measure was to set up a separate “I” team representing a cross section of the plant to investigate employee issues.
This is beautiful. Toyota recognises that it is essential to be fair and consistent; and that the journey is not easy – there will be lapses. So they have invented processes to overcome those issues. It also essentially recognises the fact that it is unreasonable to expect the organisations to be perfect – but it is essential to have ways to spot and cure deviations immediately before they turn cancerous.
In this journey some organisations will be ahead of others. [Just to set the record right – Toyota has also come under attack – Read here]. And some organisations remain at the extreme where they flout laws, turn a Nelson’s eye to the reality and use extra-legal means to break unions. We have to understand that the organisation’s choice of stance on unions is consciously made. [When organisations declare values, do they really have any choice?] And it is fully evident to the public in the event of strife.
On their part the unions have richly contributed to the image of antagonistic adversaries who exist to serve the personal agenda of their leaders. They do not declare ‘values.’ There are some exceptions here [See Thermax Story] but those are very few.
Maruti Suzuki strike brings out these aspects in focus once again. Whether Maruti Suzuki episodes will lead to introspections on both the sides is a question.
PS: Long back I read ‘The Reckoning.’ Its author David Halberstam writes, “Then one day I was on a book tour and I kept noticing that Chrysler was almost gone, Ford was in trouble, all these great American companies were [gone]. And who was beating them? Japan, which I had last seen when we had, in Winston Churchill’s phrase in 1945, “grounded to powder.” And the Japanese were taking cars, which was an American signature, and doing better at them. I didn’t see it as a business story. I saw it as a social cultural story. How could this have happened? So, that question became The Reckoning.  ………..But the question was, “How did this happen and what does it teach us about Japan? What does it teach us about ourselves?” It was a very big story. In fact, I think the best reporting I’ve ever done in my life is in that book. It’s the story of a strike at the Nissan plant in the early ‘50s and the company crushing it and installing a union made of management people. Which gives you a chance to understand how Japan works in modern society. It was very hard…there’s a Japanese intellectual who when he refers to Japan in terms of communication, he says, “It is the black hole of the universe.” A very positive value is placed on the extracting of information and no value at all is placed on the giving of it.” 
The strike story of Nissan is very familiar for Indian readers. It is full of events that also happen at the gates of the Indian factories. But Japan has moved on from there.