People management fiasco in HMSI
The case study involves HONDA MOTORCYCLES AND SCOOTERS IN INDIA LIMITED. The company (HMSI) was established on 20/10/1999, to produce high quality scooters and motorcycles in India. The company which was under, Japanese top management had a total workforce of about 3,000 employees. The company held a production capacity of 100,000 scooters per year with a target of boosting this capacity to 600,000 in the next five years.
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Immediately after the establishment of the company, the performance was extremely positive, and the results were promising. The TNS Dealer Automotive Satisfaction Study 2004, ranked HMSI as the leader in two wheel category, in India. HMSI also received other recognitions in other spheres. However, on 25/07/2005, the company suffered a significant setback unprecedented violence broke out between HMSI workers and police during a HMSI strike due to poor, working conditions.
The key purpose of this paper is to identify the key cultural management issues covered in the HMSI case study.
This case study analysis will examine the HMSI case. This paper begins with a comprehensive analysis of the case. The Hofstede’s model and culture noise concept are centrally used in identifying the key cultural management issues in the study. Apart from identifying the cultural management issue in the case study, approaches in solving these issues, will be explained, and solutions proposed.
The Hofstede’s module has five dimensions; Power/distance, individualism, masculinity, uncertainty/avoidance index and long term orientation. According to Hofstede, these five dimensions explain the difference in company culture. Cultural noise refers to obstacles restricting successful communication between people of different cultures (Deresky 2008, p. 12).
The first factor to consider in the case study is the HMSI organizational structure. The top management was Japanese, whom had employed Indians subordinate management to manage workforce required to run the day to day activities of the HMSI Company.
Cultural noise is identified in the case study whereby, the Indian management would not allow workers to communicate, to the Japanese top management to share their grievances. As a result, the Japanese top management knew little of the workers grievances. This interdiction of communication was a vital catalyst to the problem (Maude 2011, P. 392).
The PD module refers to the measure of acceptance of people on the social status quo in their region. The HMSI management failed to establish a low PD which supports teamwork. A low PD organization, ensure all staff are equal to promote teamwork in the organization.
This model is appropriate in India, while a high PD which involves; strong hierarchies, these organizations demand authority, respect and acknowledge of leaders power. This high PD model is commonly used in japan. The Japanese top management overlooked this factor and employed the high PD model. This was the main cause of friction between workers and management.
This factor is clearly displayed by the attitude of the vice president of manufacturing, who is a Japanese national. His actions included demining workers by disrespecting them and even assaulting them. This is confirmed in the case study where; the VP kicks a worker in the leg to show his disapproval to the worker for being late. This behavior contributed significantly to provoking the employees (Tian 2004, p. 19).
The LTO module refers to a society scales long stand in social values and traditional norms. This dimension was discovered in 1990, when Hofstede realized, the people in Asian countries, due to different backgrounds, acted differently to the people in western countries. In western countries, Low LTOS flourish.
This is because the culture in these regions considers everyone as an equal. Asia countries flourish in the High LTO settings this module require that, the young respect the old and everyone avoids actions that might humiliate another person. The management at HMSI despite the country being in Asia neglected the implementation of High LTO. This is illustrated by the harsh policies and treatment of management to staff.
This is confirmed by the VP causing man to Loose face by knocking his hat down because its not company uniform. The reaction of the workers on this action clearly confirms the fifth dimension of Hofstede’s module. The fact that, the worker felt insulted by the VP actions against him is a confirmation of lack of the modules application.
The reaction of the employees to the treatment by management and demining policies conveyed in the bathroom incident reconfirms this module. Overlooking these cultural factors by management was the main cause of the violence breakout as the workers retaliated (Mooij 2010, p.35)
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Although the company showed recognition of the Diwali festivals by giving each worker a Diwali gift, the company did not show real initiative in its intentions after the workers showed resentment of the gifts. Where Diwali is a Hindu festival that consists of them celebrating together with their families, by performing traditional activities together, the company did not show real initiative towards this effort.
Instead of discussing the problem with the workers, the company converted the gifts into coupons with which the workers could buy any gift they wanted. The lack of communication between the Indian management and the workers conveys cultural noise. Moreover, the action conveyed the organization’s showed a lack of respect for Hindu culture and tradition. Given that, the workers had already expressed that, they felt belittled by the gift.
In general, the Japanese top management had established policies that observe most of the Hofstede’s theory. In the Human resource policies, there contained; respect for individuals differences through respecting individual’s initiative, quality and trust. According to the company, respect to the individual translated into the independence of spirit and freedom, equality and mutual trust of the HMSI workers
The company claimed, its policies focused on developing each worker’s capacity to think reason and dream. The company policy expresses support of equality of employees this is shown where; the company issued similar uniforms and a common canteen for all. In fact, all employees of HMSI were called associates in the company.
These policies show that, the top management had observed, PD, High IDV, Low MAS and Low LTO module of the Hofsede’s theory. The question remains, if the Japanese top management had observed all these dimensions in the HMSI policy, why did we find none of them in the analysis of the case study? Also, why did the incident on 27/07/2005 happen?
According to the analysis of the case study, the conclusion is; Even though the top management had considered this module in the HMSI, the subordinate management disregarded them and failed to implement them. The HMSI workers culture and region scores a low UAI. This is shown by the workers care free business attitude and high emotional response to small actions.
The subordinate manager’s enforcement of rules and expectations, without regard to the people’s culture was the birth cause of the incident. The subordinate management also acted as the source of cultural noise between the workers and the Japanese top management. This was another major catalyst that led to the incident (Gary,L 2009, P. 189).
Deresky, H 2008, International management: managing across borders and culture, Pearson Prentice Hall, California.
Gary, L 2009, Executive Guide to Managing Disputes, Beard Books, Australia.
Maude, B 2011, Managing Cross-Cultural Communication: Principles and Practice, Palgrave Macmillan, UK.
Mooij, M 2010, Consumer Behavior and Culture: Consequences for Global Marketing and Advertising, SAGE, Netherlands.
Tian, Q 2004, Transcultural Study of Ethical Perceptions and Judgments Between Chinese and German Businessmen, Martin Meidenbauer Verlag, China.