HMSI Case Analysis

Group 5
Ankita Chakrobarthy
Soham Barman
Ipshita Goyal
Pukhraj Jawanda
Ritesh Jha
Abhishek Srivastava
HMSI was a wholly owned subsidiary of Honda Motors
Company Limited Japan
Initial installed capacity : 100,000 scooters per year
Scheduled to reach 600,000 scooters per year by 2005
Union affiliated to All India Trade Union Congress (AITUC)
of the Communist Party of India
HMSI aimed to produce world class scooters and
motorcycles which could bring a change in peoples
everyday lives
Workforce consisting of regular workers, contract
workers, trainees and apprentice


Respect for the individual stemmed from initiative,
equality and trust

Independence of spirit and freedom, equality and mutual
trust

The Three Joys Philosophy : Joy of buying, Joy of Selling
and Joy of Manufacturing
Equality among all employees through similar uniforms
and common dining area and canteen
Acclimatizing the employees about the Honda Way-
developing a way of thinking based on Honda Philosophy
Presence of a scientific and well defined Performance
Management System for all employees
HMSI workers did not qualify for ESI scheme as their
salaries were above the max. salary limit for coverage
The company covered these employees under its
Paramount Healthcare Facility
Provision of Financial Support under special
circumstances
Authoritarian style of management
Lobbying against registration of union leading to furore
Termination & suspension of union leaders & workers
Discontent over diwali bonus as compared to other industries


Question: Analyze this case in terms of the changing frames of
reference in IR
Before the incident think the company thought they followed
a Unitarist approach
However at the same time the workers are exploited and
political help is taken to not let the Union get registered
The management does not takes steps to resolve the issue
even during arbitration procedure
After the attitude of management takes a significant shift and
suddenly becomes very friendly
Because of this the workers also take up the responsibility of
the work they are performing thus improving the relations
Question: What do you think were the principal causes of the
trouble that HMSI faced?
Management suppressing formation of unions
Ignoring the opinion of workers
Forcing the policies and procedures which were not employee
friendly
No grievance management and Industrial relations expert
The attitude of Managers in the plant towards worker was not
to the mark
Leave was not given even in the case when the relative of
employee was not well
Question: What HRM strategy and business strategy were
followed by HMSI?

The company they followed a Unitarist perspective
Organization is perceived as harmonious one big happy family
Unitarism has a paternalistic approach where it demands loyalty
of all employees
The Three joys philosophy comes out of this perspective
Although the organization wanted to follow this strategy the
Managers in the plant followed something exactly opposite -
Toyotism








Question: What led to the failure of its strategy?
Enforcement of systems like signing of movement sheet while
going for break, no granting of leaves in case of sever
circumstances also
Lack of sympathy and respect for workers in senior management
Philosophy of Three Joys was not actually being practised in
the management
Employees did not derive happiness from their daily work due to
the strict rules imposed upon them
Question: If you were HMSIs CEO, what HR strategy would you
have followed in the pre-fiasco situation?
Having a qualified IR Manager to resolve the labour issues
Bringing a change in the managerial style & introducing team work
& collaboration- through training, workshops, simulations etc.
Introduce Job rotation so that no worker has a reason to
complain about the work load
Make the Holiday policy more friendly to the workers
Remove the time keeping mechanism which was in place
Realize that the policies that are working in Japan may not
work in India. Modify policies so that they are more
acceptable in the Indian context
Question: What are the key challenges before HMSI in the post-
July 25 scenario?
Sales fell down
Public Image took a beating
HMSI could not reach the target production
Expansion plans cannot be realised because of this incidence
There was an entire loss of trust between the labour &
management and it is a challenge to win this back
The possibility of a repeat of the fiasco was still high; but there
was no mechanism (a dedicated IR system) to prevent it


Question: What people-mgmt. strategies should HMSI adopt in
short run & long run?
In the Short Run:
Proper grievance management system should be in place
Take the Union into confidence by resolving issues quickly
Setting up a dedicated Industrial Relations team
Hiring experts from outside the company
Building IR talent from within the company
In the Long Run:
Building a culture where employees are encouraged to speak up
and openness is valued
Proactively handling issues
Proper training and Job rotation should be in place to create a fair
image among the workers
Question: What lessons in people management and IR do you
learn from this case?
In todays scenario with high levels of unemployment and
increased competition, neither the worker nor the employer
wants a sticky situation: understanding this can help both
sides avoid sticky situations
It is important to be proactive rather than reactive in labour
management
It requires a collaborative approach and NOT confrontationist
approach to solve IR issues
HR training to be given to all the line managers
Co-operation between top level management & workers
Soft skill training to be imparted to all line managers

Thank You!