The Automobile Industry In India Commerce Essay

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The automobile industry in India is one of the largest automobile industries in the world where Maruti Suzuki India Limited is the largest leading passenger vehicle manufacturer company in India. Maruti Suzuki India Limited is solely responsible for bringing automotive revolution in India the Company offers a comprehensive variety of cars starting from entry level cars, trendy hatchbacks, sedans to sports utility vehicle.

Through this report, we have analyzed the human resource management research in respect of Maruti Suzuki India Limited to understand the organizational structure & it's working style. Also by implementing strategic human resource management we have analyzed the three major human resource related issues:

Industrial Relations between various sections of industry is an important aspect of business. There should be proper understanding among various section i.e. top management, manager and laborers. Also providing proper wages, incentives & working & living conditions is necessary. Since inception Maruti Suzuki India Limited was facing industrial relation problems, resulting into labor strike & lock outs of the production plant for demanding increase in their wages, incentives causing stoppage of production. Forming a cordial relationship & developing a peaceful working environment between management & workforce through mutual understanding is very important for any industry.

Workplace Diversity means creating a workplace that respects people from different cast, race, religion, place, age, gender & their working style. In today's globalised world, every company is approaching towards workplace diversity as globalization needs interaction between people from different country, different culture & different belief. Maruti Suzuki India Limited faced the problem of workplace diversity as all the higher level posts were allotted to the Japanese people, due to which there was no proper co-ordination between the employees of the company. Maruti Suzuki India Limited practiced wrong workplace diversity. Workplace Diversity means hiring people from sections of the society & not just one section.

Motivation means the willingness to exert high level of effort towards organizational goals, conditioned by the effort's ability to satisfy some individual need. Companies can motivate their employees to perform well through various motivation techniques like incentives, bonus, reward & recognition. Maruti Suzuki India Limited & its employees faced motivation related issues such as security reasons, payment issue, stress level & change of management. These issues can be solved by various methods such as recreational issues, positive reinforcement & motivational workshops. Through these findings, we have come over with our recommendations that will help the company to overcome the issues & work more effectively in future. The assignment is divided into three parts & they are: Introduction about Maruti Suzuki India Limited, Situational analysis & recommendations & the conclusion.

1. Introduction

Brief History


Introduced in 1983 with the Maruti 800, Maruti Suzuki is one of the leading four- wheeler automaker manufacturers in South-Asia. It was the first company in India for the mass production and to sell more than a million cars. Maruti Udyog was renamed as Maruti Suzuki India limited on 17th September, 2007. Maruti was a joint venture between the government of India and Suzuki Motor Corporation, Japan. Maruti's philosophy is to Reduce, Recycle and Reuse its Plants, so that there is a minimal usage of natural resources. The company headquarters is in Gurgaon and Haryana.

The company has produced a wide range of cars with various models. It has offered 14 brands over 150 variants. Also the company has produced 5 million vehicles. The vehicles are widely sold in India and several other countries where the orders are placed. The company exports more than 50,000 cars per year. Maruti 800 were launched in 1983 and were in the market till 2004. Hence in the Indian market, the term" Maruti" is commonly used to refer to this compact car model.

R.C.Bhargava was the initial managing director of the company. Till today, he is regarded as the instrument for the success of the company and currently holds the position of chairperson in Maruti Suzuki. However from 2007, Mr. Shinzi Nakanishi has been appointed as the managing director as well as CEO of the company.

Maruti operates at almost all the categories and therefore had different competitors at different segments. Also Maruti Suzuki limited has captured overall share of 46% in the Indian car market. But after 18 years from its launching, Maruti faced a depleting market share and reduced profits. This was due to its internal turmoil and the changes in the external environment. After this fall the company redesigned their strategies and learned a lot from their parent company Suzuki. This organizational learning was moderately successful. And after this, the company also increased focus on vendor management.

Maruti Suzuki has introduced the new technology called the superior 16*4 Hypertech engines across the entire Maruti Suzuki range. Due to this, the owner gets the ideal combination of power and performance from his car. The other innovation has been the introduction of Electronic Power Steering (EPS) in selective models. This has been resulted in better and greater maneuverability. In other words, our cars have become even more pleasurable to drive. At one stop shop, Maruti Suzuki is set to provide a single-window solution for all the car related needs.


To provide a wide range of modern, high quality fuel efficient vehicles in both domestic and export markets, in order to satisfy the needs of various customers.


To be an international competitive company in terms of products and services.

And to retain the leadership in India and should aspire to be among the global players.


Adapting themselves to quick environmental changes.

Contributing to the value and satisfaction to the customer.

Aligning all our employees, suppliers and dealers to face competition.

Maximise the value of shareholder's.

Being a responsible citizen in the corporate world.

Human Resource Management in Maruti Suzuki India

Human Resource Management is a process of managing human resource to improve the efficiency of the individual as well the organization as a whole. "Planning, organizing, directing & controlling of the procurement, development, compensation, integration, maintenance & separation of human resource to the end that individual, organizational & social objectives are accomplished." Edwin Flippo.

Like every company, human resource management plays an important role in Maruti Suzuki India limited. Maruti Suzuki is clearly an "employer of choice '' for automotives engineers & young managers across India. The vision of Human Resource Management is to " Lead & Facilitate continuous change towards organization excellence; create a learning & vibrant organization with high sense of pride amongst its members." Human Resource pays special attention on strategic business plan to achieve its business objective & vision. It identifies the employees that need training & accordingly plans the technical & behavior training. There are meetings held for all levels periodically to overcome the communication gap between the various managerial levels. To ensure the interest of the employee, the human resource management provides job rotation so that their job does not sound monotonous. It also empowers the employees with authorities, job enrichment & systematic career planning.

Human Resource Management in Maruti Suzuki India Limited follows the Japanese Management philosophy of team spirit. They have common uniform, common canteen, morning meetings, morning exercises, easy & speedy communication & decision making where there are no managerial levels.

Recruitment & Selection plays an important role in Human Resource Management of every company. Recruitment can be internal as well as external. Internal recruitment includes job posting, skills inventory & referrals whereas External recruitment includes recruitment through advertisement, through school & college campus & with the help of various private & public employment agencies. Human Resource Department of Maruti Suzuki India Limited uses a mixture of various recruitment techniques. It uses job posting method, reference from employees, advertisement for job vacancies. It also appoints various private & public employment agencies for appointing the employees. Maruti Suzuki India Limited recruits fresh individuals from business schools & colleges by conducting the interviews in the campus & provides them the opportunity to work & earn.

After the Manesar plant violation on July 18 ,2012 which led to breakdown of the plant, Maruti Suzuki has authorized its managers & supervisors to recruit new employees as a part of their new human resource policy for building confidence between management & workers for restarting the operations at Manesar plant .Currently the company is having 9100 employees. However the company had 3300 workers at Manesar plant , where 1528 were permanent & the remaining were on contractual basis from which the company has terminated 500 workers .

Although the company has applied various different techniques & methods to achieve success in HR, but still there are certain problems such as Cultural Diversity, Security issues after the Manesar plant violence and de-motivation of staff.

2. Situation Analysis and Recommendations

2.1 Industrial Relations

2.1.1 Situation Analysis

In this era of globalization and stiff competition to raise productivity to a higher level it is necessary to eliminate strike or lock outs by providing reasonable wages, living conditions and benefits. The above can be achieved by developing mutual understanding between all sections of industry i.e. top management, manager and laborers to safeguard the interest of both laborers and management.

Since its inception in 1983, Maruti Udyog limited then and now Maruti Suzuki had faced few hurdles in the form of labor strike in 2000 where employees went on an indefinite strike to demand increase in wages, incentives among other things. Maruti was privatized in 2002 with Suzuki being major shareholder and since then industrial relations in the company has been handled pretty poorly which resulted in multiple strikes during this period of ten years. All hell broke loose on July 18th when the General Manager of Maruti Suzuki was burnt alive and the plant damaged by the agitated laborers.

This resulted in the lockout of the production plant for more than a month, though some refer this problem as a riot issue but the root of the problem is still poor industrial or labor relations.

Number of past issues exist among workers and management which is a sought of bottleneck for the growth of company, the issues includes-

In a country with massive unemployment, permanent employment in leading car manufacturing industry is desirable for many but Maruti employs a large number of contract labourers who doesn't enjoy same benefits as permanent employees and are anti against management for the very same reason or in their words injustice.

Also there was a conflict once regarding the authenticity of Manesar Plant Trade Union between trade union and management when management declined to treat the association as registered association

The traditional approach of management being followed which is more of responsive in nature as compared to proactive for example increasing wages after strike i.e. loss in production which could have been avoided if management had negotiated and paid attention to the matter at an early stage.

Issues like contract worker getting very less salary as compared to permanent employees have been a source of displeasure among the labourers

2.1.2 Recommendations for Industrial Relations

The main objective of Industrial Relations is to form a cordial relationship between management and workforce through mutual understanding between them and also to develop peaceful environment essential for increasing the productivity of workers and in turn productivity of the plant.

Good Industrial Relations is not just good for management but for workforce as well as cordial relations mean that labors are well paid and satisfied working in the company which might motivate them to work more efficiently. Hence to enforce better industrial relations in the company it is important to emphasize on following factors-

Participation of workers in management-Using work committees, joint consultations and other methods encouraging the involvement of workers in the management of the industrial unit. The productivity and effectiveness will increase by the improved communications between workers and management

Adhere to agreements -The management should abide by the clause mentioned in the agreement and implement it. The agreement should not be just enforced in letter only but in spirit also .Both parties i.e. trade union and management should hold their end of deals and follow the agreement to the niche. This creates an environment of understanding and trust which is fruitful and productive for both workforce and management.

Role of Government: The government plays an active role in maintaining industrial peace. It should strengthen labor laws and intervene when the two parties in this case trade union and management can't resolve their issue. Government is also responsible for registering unions and it should be seen that there is no second trade union in same industrial unit but a law should be passed making mandatory recognition of a trade union in each industrial unit.

From reactive to proactive- Management should adopt more strategic approach of handling human resource and instead of being reactive in nature i.e. when strike will occur then raise wages should be proactive i.e. take action beforehand. Also a performance incentive system can be introduced to reshape their organization behavior.

2.2 Workplace Diversity


"Diversity is defined as the human qualities that are different from our own and those of groups to which we belong; but that are manifested in other individuals and groups. Spectrum of diversity includes but is not limited to: age, ethnicity, gender, physical abilities / qualities, race, sexual orientation, educational background, geographic location, income, marital status, military experience, parental status, religious beliefs, work experience, and job classification."

Diversity, in the concept of workplace means creating a workplace that respects and includes differences, recognizing the unique skills and contribution of the individual can make that maximizes the potential of all employees. Also diversity focuses on broader set of qualities than race and gender. Diversity also highlights the long term goal of an organization that the workforce should generally reflect the population of the organization it serves an all its dimensions.

2.2.1 Situation Analysis

Since globalization is the overwhelming trend now days, firms have more approach towards the workplace diversity to expand their hands on global basis. This globalization requires more interaction among people from different cultures, of different beliefs, and backgrounds. People no longer live and work in a solitary marketplace, but are now a part world's economy with rivalry coming from nearly every region of work. For this reason, organizations need diversity to become more creative and open to change. But on other hand workplace diversity has become an important issue for management today.

Recently Maruti Suzuki also experienced a disturbance in the harmony of the plant at Manesar due to incompetent management regarding workers. It resulted in violence at the plant injuring many workers and death of HR executive. Violence sparked due to a fight between a supervisor and a worker belonging to scheduled caste with termination of the worker without investigating and sparing the supervisor. All kind of reasons were attributed by management and media for the violence beginning with naxalites involvement, political interference, more international involvement, etc. Due to the improper channel of management there has been many case before which lead to the instability of the company. In 2011, 3 strikes were carried out by the workers of Maruti Suzuki for the fulfillment of their demands. After the Japanese takeover of Maruti Suzuki Limited the higher management posts are allotted to Japanese nationals as in such they were not quick in decision making which led to previous strikes.

Hiring people from all sections of the society brings diversity for business but Maruti Suzuki Limited practices diversity in wrong ways. Even though it hires people from all sections of the society the demarcation lines can be seen. People here belonging to lower social strata of society and upper rural group are hired at worker level, wherein managerial level is occupied by urban elite from New Delhi. This kind of misplaced diversity has failed in promoting understanding between managers and workers. It is important to note that organizational fabric cannot be strengthened without knowing the socio-cultural undercurrents among individuals and groups.

2.2.2 Recommendations for Workplace Diversity

Here the insight of the previous incidents in Maruti Suzuki makes it difficult to implement the recommendations and adapt the outcome of Diversity Management. Some of the recommendations which will bring positive perspectives on core business issues and opportunities are as follows.

Include one and Everyone -Irrespective of power, position and post each and every employee of the organizations should be considered equivalent in the shadows of Diversity. In case of Maruti Suzuki beyond the race and gender the diversity should emphasize on the unique talents, experience and knowledge skills which add up to the customer services, quality product development, sales and other core business issues.

Equal Employment Opportunities-The Diversity management focuses on hiring and promoting representatives from certain groups of people who have been denied entrance and opportunities in the workplace. In Maruti Suzuki the major employee on worker levels are on contractual basis. Hence either the contractual employees should be reduced or they should be made permanent employees.

Seek Commitment from All Levels of the Organization-Human Resources department of Maruti Suzuki should encourage commitment from their top management before beginning a diversity recommendation. Apart from the financial contribution leaders should be the role models. Involvement of representatives of different hierarchy level of organization should be involved in planning, implementation and evaluation of diversity efforts. Also managers should be clear about the diversity initiatives which they will implement. As a fact the diversity initiatives communicates the roles and responsibilities of leaders and also helps the leaders in achieving the diverse workforce and customer base.

Education and Training on Diversity- Along with the trainings for leadership and employee relations, diversity training should also be included. Leadership training should include learning to create environment that promote bonding between employees, prevent discrimination and harassment. Similarly, employee programs should focus developing skills to enhance quality work relations and customer service with a wide range of people. Training also needs to focus on skills rather than just awareness and should include experiential exercises that are involving, relevant, practical and enjoyable.

Use Resources- As in whole; there are several internal and external resources that may help management in understanding the influence of diversity on business objectives. These resources serve as information bases, sounding boards and architects to help companies determine their own diversity initiative's strategies, direction and goals.

2.3 Motivation

Motivation derived from the word 'motive' means needs, wants or desires drives within the individual. Motivation is a process by which people are encouraged to achieve their goals which vary from person to person. Herzberg through his Two Factor Theory (content theory" of motivation") found that the factors causing job satisfaction (and presumably motivation) were different from that causing job dissatisfaction. He called the satisfiers motivators and the dis satisfier's hygiene factors.


Source: Researcher

Basically there are two distinct human needs

Physiological Needs are needs that can be satisfied with money e.g. to purchase food, shelter

The Psychological Need is needs that money can't buy like learning and growing in a particular field.

If we have a nice car, it's of no use if it doesn't have the power of a great engine behind it. We can call our Employees as our engines to organization and without employees it is difficult to operate functions smoothly and effectively same in the case of car. Employee motivation is directly depend upon business profits. The more motivated employees are the better result they yield.

2.3.1 Situation Analysis



Payment Issue-If payment of Upper management is increasing and workers payment is at the same position this will widen the gap. Same case is happening with Maruti Suzuki. Permanent workers at Manesar plant were earning Rs.17, 000-Rs.18, 000p.m and contract laborers were earning Rs.7000 a month, despite doing the same work. . Low wages and mismanagement in the organization was responsible for building up the anger among the Manesar Plant workers.

Security Reasons-Few months back the conflict began in the Maruti Suzuki. Workers Union stood up for a worker who has been suspended by a company executive. That official was attacked by workers and they injured him badly. No Safety was given by higher management to any executive. It is very difficult to work under such situation, Police has arrested a number of workers of the Manesar plant under the charges of murder and attempted murder, because of this lower management level was demotivated. There should be some rules and regulations in the plant. it is located on the outskirts of Delhi, is expected to follow an unannounced code of discipline, which was not so in the case of Manesar plant.

Stress Level-In present era operating manufacturing unit requires lots of patience, manpower& financial stability. Costs and wages have increased and sales are poor & volatile. Every company is doing research to find out ways to bring down costs and improve productivity. At Maruti's Manesar factory, 40% workers are on contract basis and their salary is half of the regular workers. All this has been converted tremendous pressure to improve production and profits at all levels.

Change of management: -Two major changes happened in Maruti Suzuki since 2007. Shinzo Nakanishi, the current MD of Maruti Suzuki, took over the reins from Jagdish Khattar. RC Bhargava, who was a director, was made chairman. There was internal conflict between Maruti and Suzuki, because for the both companies Indian Market is important. it has an Indian chairman Mr. Bhargava who is 78 years old. It does have many senior Indian executives who have been 'lifers' at Maruti, but the Japanese voice counts and often tends to dominate crucial decisions. Culture factor is the main issue among them.

2.3.2 Recommendations to increase Motivation:

1. Positive Reinforcement-Positive reinforcement is basically applause or rewarding an individual on his achievement. Organization can use positive reinforcement theory to motivate employees for their performances. When behavior of one employee goes in positive way, other employees will follow him undoubtedly. It helps in increasing production and profit. For example If 'X' employee complete his task within given time frame and his work is appreciated by management in front of their co-workers. This is going to be positive reinforcement for all the workers, because it not only motivate 'X' employee but it also motivates people around him who desires to receive praise from management. Appropriate reinforcement policy should be adopted by the management of Maruti Suzuki.

2. Recreational Activities-Work and business training mainly focused on rules, theory & structure it develops only left side of brain. Whereas motivation, confidence, empathy, soft skills which are more needed in today's competitive world is tend to use right side of the brain. Using games & outdoor activities such as rappelling, rock climbing etc. it basically creates new opportunities for them to achieve something, experience winning & personal development. The role playing games is very effective for motivational and visualization technique. This is the very effective and simple way to motivate the workers.

3. Motivational Workshops-These kinds of workshops combine training, self-development, motivational talk & planning. Main motive of these workshops is to increase participation & involvement of workers. It also helps to improve communication between two departments & also helps to break down barriers between upper management and lower management. Maruti Suzuki should take motivational workshops for their employees to understand their problems and to make good use of their manpower.

Problems Maruti Suzuki India might face in implementing aforementioned recommendations

The recommendations for industrial relations can only be successful via effective communication which in case of Maruti Suzuki Limited is a major issue, complete and correct information is rarely passed from upper to lower management and hence lower management draw its own conclusion which leads to misunderstanding between the two parties.

The recommendations like one and everyone, equal employment opportunities and seeking commitment cannot be implemented up to its full extent. As a developing country India still has the demarcation in caste, post, social status etc. which makes it more difficult for implementing these solutions.

Providing incentives to employees who contribute more will increase the cost of Maruti Suzuki Limited, also according to Maslow Hierarchy of Needs every individual has different needs hence having same incentive plan for everyone will not give drastic change in productivity of the workers.


Maruti Suzuki still holds the titles of being the largest car manufacturing industry and the market leader in automobile industry but in past few years its market share has dropped significantly due to various reasons of which some are human related such as-

Industrial Relations- relationship between labours and management

Workplace Diversity- discrimination on caste and status

Motivation- security issues and stress due to constant changes

After taking in depth knowledge and doing thorough research about the industry, we analyzed the aforementioned Human Resources issues and suggested few recommendations to overcome the above mentioned issues and to ensure bright and sunny future for Maruti Suzuki Limited.

Industrial Relations- the first and most critical issue for Maruti Suzuki Limited is the relationship that exists between the labour and management is not so cordial as it should be which is evident from the fact that in the last decade there has been numerous number of strikes due to various reasons, sometimes due to management pride or labourers or due to either party not keeping his part of deal. Therefore for establishment of affable relationship between labours and management it is necessary that both labours and management should adhere to agreements also involve some workers in management and keep them posted about company's objectives might help keep peace at workplace. Apart from management and workers it is duty of government to play the role of mediator in case both parties are unable to solve their issues on their own.

Workplace Diversity- the second issue due to which the work environment of Maruti Suzuki is disturbed is workplace diversity. The main two problems seen in Maruti Suzuki India in regard to workplace diversity are Caste Demarcation and Cultural Diversity. As in last strike the issue started when the supervisor passed comment about labour's caste which leads to the plant being burnt down and closed for about a month. The issues can be resolved by treating each and every employee as equal on diversity background, training and education should be given, and equal job opportunities should be given to labourers and workers and to ensure commitment from all levels of hierarchy of Maruti Suzuki limited in initiatives taken to resolve the diversity issues.

Motivation- the last is a very common issue for many organizations' human resource management. Human Resource Management need to understand the various perks, benefits, goals and incentives that can be introduced in the corporate plans in order to satisfy the employees and motivate them to optimum extent. Security has turned into a major concern after July 2012 incident hence providing increase in salaries as well as benefits such as health insurance has become a necessity to retain the intellectual assets of the company.

The above mentioned issues and recommendations for these issues will hopefully help Human Resource Management of Maruti Suzuki Limited to achieve success and good performance from employees and also create a normal working environment helping Maruti to achieve many other feathers in their cap.