ByeongHo Hwang (Terry)
SP14 BUSMHR-4321: International Labor HR
Professor Tashlin Lakhani
February, 18, 2014

Case Memo : Honda in India (Saini 2006)
<Question 1-1>
Prior to March 2005, what was the overall business and HR strategy (or philosophy) at Honda Motorcycles and Scooters India (HMSI)?
To begin with, the human resource policies of HMSI were influenced by the philosophy of its parent company, HMCL. As a result, HMSI had adopted fundamental beliefs and values from HMCL. There were two core beliefs: “Respect for individual differences” and “Three Joys”. First of all, HMSL had thought that individual contribution would be one of main keys for the company’s success, so they especially considered the independence of spirit and freedom, equality, and respect for human beings. Moreover, HMSL had focused each individual’s capacity to think, to reason and to dream. Second, in alignment with the philosophy of its parent company, HMSL had also accomplished the concept, called Three Joys: the joy of buying, the joy of selling, and the joy of manufacturing. This idea was used to in order to help staff and workers become happy from their daily work.

<Question 1-2>
What HR policies and management practices were in place and were they consistent with the overall strategy?
HMSL had HR policies and management practices, such as performance appraisal system, works committee and employee welfare. First of all, the promotion opportunities for workers ranged from worker to sub-leader to assistant executive to executive. In addition, because of the Payment of Bonus Act, the company had institutionalized a policy of offering an incentive pay around the Diwali festival. Second, the company had constituted a works committee under IDA, such as canteen, transport, the health, and the sports committee. These committees were for the interest of different person. In last, the company offered uniforms, hospitalization reimbursement, transport facilities, sports club for all employees. In conclusion, all of these HR policies and management practices HMSL conducted actually show that the company respected for all individuals and tried to be fare in accordance with its overall strategy because the company’s HR strategy was mainly based on the independence of spirit and freedom, equality, and respect for human beings

<Question #2>
Identify the host country factors (e.g. culture, institutions) that management at HMSI faced.
How did management respond to these factors and were their responses effective? Before identifying the host country factors, I would like to describe several important characteristics of the home country factors; in this case, Japan. The research shows that Japan generally has a high score on power distance, masculinity, and uncertainty avoidance. India also shows high power distance similarly, but it has low masculinity and uncertainty avoidance in contrast. According to the case, it describes the vice-president of manufacturing, and workers were unhappy with his idiosyncratic attitude (Say anything to anybody at anytime). Moreover, workers wanted to be equally treated and work fairly; however, many managers showed partiality in matters related to job postings. Japanese top management even knew about this situation, but there was no response or solution. As I mentioned before, Japan has high masculinity which indicates that the society would be driven by competition, achievement, and success, with success being defined by the winner and best in the field. The fundamental issue is what motivates workers, wanting to be best (Japan culture) or liking what they do (India culture). For example, the case shows that if workers could not finish the certain amount of work, they had to stay and perform up to expectations. This example directly represents that the company actually focused more on daily achievement rather than workers or working environment. After several issues, the workers started collecting money for funding union activities. However, many of them were individually called into a manager’s room and exhorted to not to join the union. The management even hired some people in order to stop the workers from making the union. In last, they also did lobbying with the government to help prevent the union. All of their responses were not effective way to communicate with workers because they had ignored what workers in the host country want and cultures in India. Moreover, I have learned important characteristics of coordinated market and liberal market economy. Japan is more likely based on coordinated market economy while India is in the middle of both types. They are different, but the management in HMSL was almost conducted as the home country had done, which led to a lot of conflicts between the company and workers in India.

<Question #3>
What role did the state play in the dispute? Why do you think the state responded the way it did? I personally think that the state should have arbitrated the dispute and tried to satisfy both the company and workers in best ways rather than just giving conciliated settlements. What they had done was more supportive for the company and even offensive to the workers. In addition, the state justified the company’s practices, such as the right to transfer the workers to any other department and termination of employees while most of the workers’ demands were simply denied and not considered deeply. Despite the workers had made the union and developments, odd incidents still existed. For example, some of supervisors treated the workers authoritatively and in a provocative manner. I think that the state tried to settle down the conflicts just for that time, and all possible best agreements between the company and the workers were not suggested by the state. 왜 그렇게 반응했나?
<Question #4>
What should HMSI do now? What HR/labor policies and practices should they adopt? HMSL should communicate with the workers, not superficially, but conscientiously. The company had created the great pressure at work and strict regulations during the work. They sometimes failed to keep its promise of “Equality and Fairness”. Most importantly, they failed to realize the worker’s complaints about being respected and having dignity. In order to improve the relationship, HMSL must cooperate with the union, communicate with the workers, and adjust HR practices according to the local context. Also, the company should have regular feedback from the workers for a future development. In class, I have learned that MNCs need to fir their HR practices to their business strategies and their environments. The company should apply local adaption rather than strong standardization. The case of “Group 3” has showed that each airline company in different country had made different decision on company and employment strategies in the balance of the host and the home country.