dwo assignment sectionf grp10

8/8/2019 DWO Assignment SectionF Grp10

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Study of Change in HRPolicies at Maruti Suzuki

LtdBy

Rayagonda (pgp26332)

Gaurav Hans (pgp26342)

Neha Kumar (pgp26353)

Rohit D (Pgp26363)

Manjunath (pgp26373)

Vineet Singh (pgp26383)

Riku Sayuj (abm07023)


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1971 - A company called 'Maruti limited' was incorporated under Companies Act

1977 - Maruti limited' goes into liquidation.

1981 - The Indian Central government salvages Maruti limited and starts looking for an active

collaborator, Maruti Udyog Ltd was incorporated under the Indian Companies Act, 1956

1982 - License and Joint Venture Agreement(JVA) signed between Maruti Udyog Ltd. and SMC of

Japan

1983 - Maruti 800, a 796 cc hatchback, Indias first affordable car, is released in the market,

Production was started under the JVA commences.

1987 - Liberalization of the economy opens new opportunities but also brings more competition

1992 - Suzuki increases its stake in Maruti to 50 percent, making the company a 50-50 JV with the

Government of India the other stake holder, turning Maruti into a non-government organization

managed on the lines of Japanese management practices.

MARUTI SUZUKI LTD -TIME LINE OF EVENTS


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Ma

r ti i: li f ast arsPhase 1: 1983 SMC-24% Govt of India 76%

Market Dominance

Product Orientation

Trade Union Perspective

Phase 2: 1995 SMC - 50%, Govt of India 50%

Prod., M&S & Peoples Perspective

Emergence of Competition

Customer Orientation

Phase 3: 2007; SMC - 54.2%; Listed on Stock ExchangeIntense Competition

Emphasis of Engineering Capability

Market Orientation & Talent perspective


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Change in Mission

When Maruti commanded the largest market share, business focus was tosell what we

produce.

"Fuel efficient vehicle with latest technology".

"Leader in domestic market and be among global players in the

overseas market".

"Creating customer delight and shareholders wealth".

Focus on customer care has become a key element for Maruti.

Increased service perspective


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A Clash of Cultures...


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Common Problems

Work Culture

disconnect between parent company culture and the local context

Misunderstanding due to lack of sensitization of local social structure & cultural context

Compensation & Benefits

Relatively low annual salary increase compared to indian context

Job Security - People Orientation

Relocation, No Increase, Salary Cuts,

Managing multi cultural teams

Equal participation with ability of sensitive listening and inter personal relationships

Example - Young recruits from India & China

Classical Example of balanced mix ofIndian & Japanese culture & management styles:


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Manager Salaries - Manager salaries were increased but still not close to

that of private companies

Successor Planning - Indian PSUs give importance to qualification and

seniority for promotion. Japanese firms look for personal confidence and

trust.

Liberalization of Economy - Maruti had to cater to changing customer

demands and this promoted decentralization of authority.

Delay in decision making -Any decision taken by board had to be

approved by the ministry. Senior management had very less technical

expertise

Effective control of the company - SMC got control over day-to-day

management of the company

Changes in Organization


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Self sufficient - This change in policy meant that Maruti had to

send people to SMC for training every year

Surplus manpower- This was solved by voluntary retirement

scheme offering good amount of money.

New plants - They Pitched plants against each other to

compete on productivity and quality

Shop Floor changes Introduction Routing Process for new

recruits Attrition came down dramatically

Service centre mechanics - Customer service mechanics

were highly specialised. To increase parity and accounatbbility

the mechanics became genaralists.

Changes in Organization


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Organizational Chart


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Changes in Organizational Structure

The Company evolved a multi-tier management structure and the concept of paired

leadership model. At the same time, it was ensured that:

Control and implementation of Company's strategy is achieved effectively

Information regarding the Company's operations and financial performance are made

available adequately

Delegation of decision making with accountability is achieved

Benefits of new organization structure

Improved clarity & focus on key management issues

Harmonization leading to reduced compartmentalization

Improved coordination across functions

Improved speed in decision making


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The Marriage turns Sour - Problems & Rectification

Post 1999, the market structure changed drastically. Just before this change, Maruti

had wasted two crucial years due to managerial conflicts

After fall in market share they redesigned their strategies and through their parent

company Suzuki they learned a lot.

The organizational restructuring cost was relatively inexpensive as Maruti had its

strong Japanese practices to fall back upon.

The Suzuki culture has been a tremendous gain for Maruti for the last 25 years.

It was a judicious mix in the JV relationship. The typical capabilities were with Suzuki

Japan, not with Maruti. Similarly, facets of marketing, sales and HR were with the

locals.

Contributions from both the partners were used to the optimum levels


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To Sum up Let us Get back to The UK Giant and the

Owner of Moov


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Conclusions & Recommendations

Conclusions

HR issues should not be neglected while having any merger or acquisition

because Human resources are the real assets of any organization.

Keep track of the Human issues in all the 3 phases of the M&A, so that noissue remains unfocused

Employee communications, retention of key employees and cultural

integration are the most important activities in the HR area for successful

M&A integration

Recommendations

Companies should put their best people in charge while implementing M&A

HR department should be included in all decision making right from the

start to the end

Retaining your key personnel should be given priority


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dwo assignment sectionf grp10

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