DHR10
INDUSTRIAL RELATIONS AND LABOUR LAWS
Assignment – I
Assignment Code: 2014DHR10A1 Last Date of Submission: 15th May 2014
Maximum Marks: 100
Section – A (Each question is of 25 marks)
1. “Industrial relations in India are largely regulated, shaped and structured by the State.”
Comment.
2. “Multiplicity of trade unions has inhibited development of healthy industrial relations in
India.” Comment.
Section – B Case Study (50 Marks)
Laxmi International ltd
Raj Kumar Behera(Raju) has been working with Laxmi International ltd(A major textile Unit) as a chief
Engineer for the last 15 years. He is considered to be very competent in his job. Raju always greeted
people with a smiling face and never lost his temper on the shop floor. Workers had considerable
regards for him. In union circles Raju enjoyed a good reputation for his fairness. He had a unique style
of his own when it came to personnel matters. He advocated patience and restraint while dealing with
people. He would often say “gone are the days when one could deal with employees strictly. Now you
have to be flexible, considerate and fair”.
A young man of 25, Muthuswamy is a supervisor who is always keen on meeting production targets. He
took genuine interest in his job and handled all his assignments carefully. He is of the view that top
management and especially the HR manager more often than not, might fail to back up supervisors in
their efforts to bring about some discipline in the plant. He believed that complaints from supervisors
are ignored by management and as a result, workers get encouraged to indulge in disruptive activities,
adversely affecting production.
Narendra, a skilled worker, has recently been elected as the Joint Secretary of the Union. He holds
leftist political views, though he is not a member of any political party. He is ambitious and wants to
reach the top levels in union circles as quickly as possible.
On Monday, Raju has hardly entered his office when the supervisor Muthuswamy rushes in.
Muthuswamy: Sir, there is a great commotion in the section. No one is working. Even after repeated
requests, workers have not stopped the shouting and hooting. Sir, please come to the shop and see for
yourself the extent of indiscipline that has become rampant.
Raju:, Muthuswamy ,take you seat. Tell me the truth. I will come to the shop floor if you so desire. But
first tell me why are you so much upset?
Muthuswamy: Sir, you know, Narendra, the Joint Secretary of the union, was loitering around and not
attending to his machine. I called him and told him to go to his machine and start it.
Raju: Then what happened?
Muthuswamy: Narendra retorted quickly, “Do not shout at me. Your lung power does not work here.
Even your bosses cannot order me about like that. What are you, after all?” Many workers gathered
around and witnessed the scene.
Raju: OK. Now please go to your section, I will ask Narendra to come immediately.
Narendra: Sir, you wanted to see me? What is the purpose?
Raju: Please sit down. What would you have? Tea? or Coffee? (Presses the buzzer). Bring two cups of
tea. (After the tea has arrived) – Do you need more sugar? Narendra, tell me now why are you after
Muthuswamy? He is a sincere and hardworking young supervisor and you should cooperate with him.
Narendra: Sir, first listen to me and then decide. This Muthuswamy is a run amok. Kal ka chokra (Small
child), he thinks he is Hitler. This morning the security staff did not allow two workers of my section in.
Somehow I came to know. I left the section and went to see the security officer. With great difficulty I
managed to get the two workers punch their cards and join duty. On my return I saw Muthuswamy
fuming and fretting. In a derogatory tone he started shouting at me. When I could stand it no longer I
also raised my voice and told him to go and report against me.
Raju: Look! Narendra you are a responsible union official. You should not have created the scene. After
all, a supervisor has to ensure discipline. I am sorry you have set a bad example for other workers. How
do you want me to proceed? Muthuswamy is very sore at being insulted in the presence of so many
workers. I have to do something so that such incidents do not occur again.
Case Questions:
a) Who is at fault and why? Substantiate with necessary inputs.
b) Do you think unionized employees required a different kind of treatment on matters relating to
discipline?
c) What should Raju do now to check both Muthuswamy and Narendra from going to the street in
future?
d) Suggest measures to make union members adopt “from conflictive to collaborative approach “.
DHR10
INDUSTRIAL RELATIONS AND LABOUR LAWS
Assignment – II
Assignment Code: 2014DHR10A2 Last Date of Submission: 15th May 2014
Maximum Marks: 100
Section – A (Each question is of 25 marks)
1. Discuss the philosophy and rationale of workers’ participation in management. What
measures have been taken in India to make it successful?
2. Write short notes on any two of the following:
a) Industrial Disputes Act, 1947
b) Minimum Wages Act, 1948
c) Collective Bargaining – Problems & Issues
Section – B Case Study (50 Marks)
Anand Electronics
Anand Electronics is a 5 decade old Indian subsidiary of Anand Electronics International, and is a market
leader in most of the businesses it operates in India. In spite of heavy investments of international
quality in the industrial and marketing infrastructure, and in its employees and systems, enviable to all
its competitors, the Anand Electronics was heavily losing financially during the decade preceding 1990.
The organisation has forayed into many related businesses (entertainment electronics, industrial
electronics, defence electronics, medical electronics, related electronic components and
semiconductors, and mechanical parts, etc.) but the structure remained functional even at the
corporate level. The lowest level of inter‐functional coordination for each business remained at
Managing Director at Corporate Level. The organisation made a loss of Rs.10 crores for a turnover of
Rs.200 crores in the year 1990. Every business was losing, with no exception, in spite of market
leadership and even high market share in some businesses.
Initial Steps: Surgery
The first step was to restructure the business portfolio in order to ensure focus of the organisation.
Criteria used were:
i. Will Anand Electronics International continue in the specific business in the medium term, or is
it forming a JV with another organisation or selling off the business?
ii. What is the extent of investments made in India, especially in terms of people, industrial
infrastructure, and marketing, and will this investment make an exit barrier?
iii. Are there any potential businesses in Anand Electronics that can provide a significant
competitive advantage to Anand Electronics International?
Two business groups were sold off along with the employees and the assets, and one business group
where manpower was low was closed. The Voluntary Retirement Scheme has not been successful.
Readjustment of business portfolio resulted in breaking even in the year 1991, turnover remaining
around Rs.200 crores.
The second step was to restructure the organisation into three Divisions based on technology‐market
combinations, creating a Divisional Management Team, and supported by a corporate management
style that minimised corporate control, increased independence to the divisional management, and
forced a consensus approach among the team members for leading the division. By end of 1992, all
Divisions became profitable, and returned a 5% gross profit for Anand Electronics, but the turnover
remained at around Rs.200 crores.
The foundations for transforming this divisional organisation into business group oriented organisation
were also laid during this period. This intermediate divisional organisation was needed to facilitate
growth of new style leaders for the future.
Revitalisation Efforts
One cannot continue with surgery, the organisation needed revitalisation. In spite of becoming
profitable, Anand Electronics historically remained as a “local for local” business and was of no great
significance to Anand Electronics International, and therefore was a potential sell‐out candidate; sellout
when going was good! Anand Electronics decided to demonstrate to Global Electronics
International that it can add value to the International Operations.
The first step was to create a shared vision for all the senior management members of various
business/division groups and corporate groups. With the help of an international consultant group,
Anand Electronics’s senior management team members worked on areas like (a) economic value
addition goals, (b) financial growth and financial productivity goals, (c) market differentiation goals, (d)
identification of key business processes that needed to be addressed to support market differentiation
goals, and (e) identification of key resources (people skills, technical infrastructure, etc.) that needed to
be developed. The one over‐riding goal was to bring Anand Electronics a “key country status” within
Anand Electronics International by 1994.
Anand Electronics grew to Rs.400 crores by 1992 and to Rs.700 crores by 1993, and Anand Electronics
International declared “Key Country Status” to Global Electronics by 1994, and identified Software
(business as well as embedded software) as a new area to be introduced. By 1994 it even identified
Anand Electronics as “Asia Pacific Competence Centre” for certain business groups.
Reengineering Efforts
In order to make a market differentiation in India, and also to be a high quality organisation among the
Asia Pacific Global Electronics organisations, Anand Electronics embarked on two themes (1) Total
Quality Management, and (2) Business Process Reengineering.
While Total Quality Management was aimed at continuous improvement of operational processes at all
levels and at all locations, Business Process Reengineering was aimed at breakthrough results in
business process that have a strategic advantage.
Business Process Reengineering was considered an essential step before (1) rightsizing the organisation,
and (2) implementation of Information Systems.
The key performance measures for a successful Business Process Reengineering were (1) improved
customer satisfaction, (2) significant cost reduction in business processes, (3) significant throughput
time reduction, and (4) improved flexibility.
Some of the business processes that were common across various business groups were (1) customer
order fulfilment process, (2) logistics and supply chain management processes, (3) design and
development processes, (4) project management processes, (5) cash flow management processes, (6)
performance management processes, etc.
The consultants used what is called a “High Touch Low Tech” process of mapping a business process
involving all the operators of the process, suppliers to the process and customers to the process. These
were involved not only in constructing the real business process (which took only 2 days), but also in
identifying the areas (steps in the process) of concern and potential improvement suggestions (which
took more than one week).
An improvement‐cum‐implementation team for each business process identified reworked on the new
process, benchmarked best‐in‐practice processes across various industries when required, and drafted
an implementation programme. Implementation process took sometimes up to 6 months.
The resulting improvements are phenomenal: for example, time‐to‐market has reduced by 50%,
inventory levels came down to 1/6th, non‐value adding activities were identified and eliminated,
manpower became redundant to the extent of 40%, cash‐flow turned positive, assets got released
(which was later used to pay off voluntary separation schemes) and so on.
Since there was management attention and focus, the whole project was completed in about a year.
Today Anand Electronics is a competence center, and major supplier of products, for the Asia Pacific in a
number of groups, and has established itself a unique position to contribute to the Anand Electronics
International Operations. Turnover increased to Rs.1400 crores by 1995, and inspite of further hiving off
some of its major businesses – as part of its international policy – it is currently at Rs.2400 crores.
Challenges to the Industrial Relations Managers
While organisation has been growing in terms of turnover, readjustment of business portfolio,
restructuring of the organisation, quality management, and business process reengineering have
resulted in a surplus of 50% of the employees. Even sale of some of the business units has invited
resistance of Trade Unions. The Industrial Relations managers had to fight a number of legal battles to
overcome the resistance of the Trade Unions.
Case Questions:
a) What specific steps would you take to ensure a smooth reduction of the surplus employees?
b) What problems do you anticipate in selling off non‐core businesses, and how do you overcome
them?
c) How do you ensure that the interest in total quality management is continued while there is a
reduction in employees?
d) How do you rope in the line managers in maintaining the morale of the organisation?
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