Labor Unrest at Maruti Suzuki India Limited

**This case was a Finalist in the 2013 Dark Side Case Writing Competition, organized by the Critical Management Studies division of the Academy of Management (AOM).

Abstract:

This case is about the labor unrest that occurred at the Manesar plant of India's largest car manufacturer, Maruti Suzuki India Limited (MSIL), the Indian subsidiary of the Japanese automobile maker, Suzuki Motor Corporation (SMC). The Manesar plant witnessed three labor strikes in 2011 and a lockout in July 2012 after the brutal murder of a General Manager (HR) at the company. The three strikes resulted in a revenue loss of Rs.25 billion to MSIL. The case details the events leading up to the gory incident in July 2012 which left one manager dead and more than 100 injured.

The main points of contention between MSIL's management and its workers related to the formation of an independent union by the Manesar plant workers; contract workers being paid one-third the salaries as permanent workers despite both the groups performing similar tasks; and, the exacting rules at work such as half the salaries of workers being deducted if they were late to work by a few minutes. Though the primary responsibility for the July 2012 murder lay with the perpetrators, i.e. the workers, the case discusses the circumstances that led to the incident and questions whether it could have been averted. One of the thorny issues was the alleged buying out of the fledgling workers' union's leaders by the company. This case is meant for MBA students as part of the Industrial Relations curriculum. It can also be used in a Business Ethics curriculum.

Issues:

» Understand the issues and challenges confronting organizations faced with labor unrest (strike action, etc.), collective bargaining, and relations with the union and workers.
» Understand the dark side of contemporary capitalism and contemporary labor force.
» Understand the reasons that compel workers to form unions and analyze whether companies, through their policies, can eliminate the workers’ need to constitute unions.
» Discuss whether paying off unions helps the cause of the companies and workers in the long run.
» Analyze how companies can really be competitive in the long run through better labor relations instead of engaging in labor cost arbitrage.
» Assess the steps that companies’ managements can take to maintain harmonious industrial relations.

Contents:

Key Words:

Labor relations; Labor unrest; Strike; Lockouts; Organizing unions; Capitalism; Dark side; collective bargaining; Marxist theory; Moral Validity; Kant; Industrial relations strategy; Labor cost arbitrage; Wage Discrimination; Maruti-Suzuki

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