IR Case Study

1. 1. A case study on Bata By S. Rama krishnan(301228) K. Raj

Kumar(301225)
2. 2. History of the CompanyThe Company was originally incorporated as
BataShoeCompany Limited on December 23, 1931 under IndianCompanies
Act, 1913 for the purpose of manufacturing andmarketing of all types of
footwear,footwearcomponents, leather and products allied tothe
footweartrade.Subsequently, the Company changed its name to.Bata
ShoeCompany Private Limited. on April 6, 1956upon conversioninto
private company. The Companychanged its name fromBata Shoe Company
PrivateLimited to .Bata Shoe CompanyLimited uponconversion to a public
company on April18, 1973.
3. 3. Contd..The name was once again changed to the currentname, i.e.
BataIndia Limited, on April 23, 1973.The Company was promoted by
LeaderA.G., St.Moritz, Switzerland, a member of the
multinationalBataShoe Organisation (BSO) with a 100%
EquityShareholding, andconsequently, the Company too isa member of
the BSO.The BSO consists of independently run companiesoperating
inseveral countries across the world.BataLimited, Toronto, Canada acts as
the headquarters of BSO
4. 4. CONTD.. Bata Shoe Organisation provides an importantinterchange of
new manufacturing technologies,machine design, factory lay-out plans
advertisingmarket forecasts, fashion trends, modernmarketing techniques,
new material testing andalso information on the most advanced
machineryand technology for production of shoes are madeavailable to
the Bata group of companies,including Bata India Limited
5. 5. Case factsThroughout its inception Bata had shown At the centre of
Bata has always growthin profits, with all labour faced labour the only loss
shown in problems was problems in 1995, but in2000 Bata the BMUor
itsmajor factories again began Bata Mazdoor in West Bengal and its
downward phase union in West Bangalore.whichwas mainly due to labour
problems. Bengal.
6. 6. Contd.. The company after making a huge loss in 1995wanted to save
itself by bringing in W.K Westonwho was an expert in turning around
performance. Weston brought in his own team and changed theentire
top management of the company. Weston made major changes like
overhaulingoperations and selling the Bata headquarters inCalcutta to
cover losses. The commercialdepartment was also shifted to Bata Nagar
despiteresistance from trade unions
7. 7. Contd. The management also retrenched 250 managers aswell as
juniors and froze recruitment activities whilefilling up gaps through
internal transfers. What added fuel to the fire between management
andtrade unions was the assault on Weston and a senior officer by
members of the union. Although Bata had plants in Faridabad,
Bangalore,Patna, Hosur but most of the output came frombatanagar

factory in west Bengal which was plaguedby influences of political parties

which madenegotiation with trade union very difficult.
8. 8. Contd.. Assault case influenced the SVP to stop renewedinvestment
plans in batanagar which broughtinference from CPIM the ruling party at
the time.This brought violence which was more of apolitical issue then
labour. Meetings between the management and unionfailed which led the
factory to be shut down for several months. A lockout also took place in
Bangalore peenyafactory in 2000 due to disputes regarding expiry of wage
agreement.
9. 9. Contd.. Lifting of the lockout also did not solve anyproblems as
employees demanded thatsuspended colleagues be called back. In 2004
Bata began a huge downsizing activity inwest Bengal which it justified by
stating that it wasoutsourcing its finished products from china This also
led the workers to approach thegovernment to intervene on their behalf.
10.10. Inferences The reasons for labour problems in Bata co. Ltd were as
follows:- The management failed to make any meaningfulcommunication
with the workers before making anydecisions. Bata had opened factories
where trade unions andpolitical parties had a very strong and
negativeinfluence. The interference of political parties ensures that
thematters became violent and through which suchparties could satisfy
their own agenda.
11.11. Contd.. The company took drastic steps very frequently like lock
down, retrenchments, downsizing. The top management only show the
benefits of the company and not the problems of workers. The workers
were heavily influenced by tradeunion and had no logic in decision
making. Expatriates do not know about Indian culture andsensibilities of
the Indian workers and hence the decision was not very beneficial.