Final Hero Honda

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- ___________ Submitted to:- Efforts By:- Dr. B.K. Jha Vinod Kumar-MBA-4563/08 Amit Kumar-MBA-4564/08

Transcript of Final Hero Honda

___________

Submitted to:-

Efforts By:-

Dr. B.K. Jha

Vinod Kumar-MBA-4563/08 Amit Kumar-MBA-4564/08 Diksha Mehtani-MBA-4565/08 Kumar Shashi Ranjan-MBA-4566/08 Shivani Bhambri-MBA-4567/08

ACKNOWLEDGEMENT

Our report would be incomplete without thanking a few people.

First of all, we are highly obliged to all the people who have helped us formulate this assignment.

We would like to express our gratitude towards our teacher, Dr. B.K. Jha without whose constant support, supervision and suggestions, this assignment would have not been possible.

We would also like to sincerely thank all our colleagues who made it very comfortable for us to work with them and provide us with a great deal of knowledge.

We would also like to extend a word of thanks to all the respondents for their cooperation.

Inspite of our best efforts, some errors might have crept in. We shall be grateful to all if the same is brought to our notice. We hope that we live up to the expectations of everyone.

Thanking You

Vinod Kumar-MBA-4563/08 Amit Kumar-MBA-4564/08 Diksha Mehtani-MBA-4565/08 Kumar Shashi Ranjan-MBA-4566/08 Shivani Bhambri-MBA-4567/08

COMPANY PROFILEThe Hero Honda story began with a simple vision the vision of a mobile and an empowered India, powered by Hero Honda. This vision was driven by Hero Hondas commitment to customer, quality and excellence, and while doing so, maintains the highest standards of ethics and societal responsibilities. Twenty five years and 25 million two wheelers later, Hero Honda is closer to fulfilling this dream. This vision is the driving force behind everything that we do at Hero Honda. We understood that the fastest way to turn that dream into a reality is by remaining focused on that vision. There were many unknowns but we kept faith, and today, Hero Honda has been the largest two wheeler company in the world for eight consecutive years. Our growth has kept compounding. The company crossed the ten million unit milestone over a 19-year span. In the new millennium, Hero Honda has scaled this to 15 million units in just five years! In fact, during the year in review, Hero Honda sold more two wheelers than the second, third and fourth placed Two-wheeler Company put together. With Hero Honda, the domestic two wheeler market was able to show positive growth during the year in review. Without Hero Honda, the domestic market would have actually shrunk. Over the course of two and a half decades, and three successive joint venture agreements later, both partners have fine-tuned and perfected their roles as joint venture partners. What the two partners did was something quite basic. They simply stuck to their respective strengths. As one of the world's technology leaders in the automotive sector, Honda has been able to consistently provide technical know-how, design specifications and R&D innovations. This has led to the development of world class, value - for- money motorcycles and scooters for the Indian market. On its part, the Hero Group has taken on the singular and onerous responsibility of creating world-class manufacturing facilities with robust processes, building the supply chain, setting up an extensive distribution networks and providing insights into the mind of the Indian customer. Since both partners continue to focus on their respective strengths, they have been able to complement each other. In the process,

Hero Honda is recognized today as one of the most successful joint ventures in the world. It is therefore no surprise that there are more Hero Honda bikes on this country's roads than the total population of some European countries put together! The company's meteoric growth in the two-wheeler market in India stems from an intrinsic ability to reach out and come closer to its customers, with every passing year. Hero Honda's bikes are sold and serviced through a network of over 3500 customer touch points, comprising a mix of dealers, service centres and stockists located across rural and urban India. Hero Honda has built two world-class manufacturing facilities at Dharuhera and Gurgaon in Haryana, and its third and most sophisticated plant at Haridwar has just completed a full year of operations. It is difficult to imagine that all this has happened in the span of just two and a half decades! The best is yet to come. During the year in review, Hero Honda powered its way in a market that, for all practical purposes, was feeling the full effects of the economic slowdown in India. With an economic recovery now clearly on the cards, Hero Honda is all set to ride into another summit. As Brijmohan Lall Munjal, the Chairman, Hero Honda Motors succinctly puts it, "We pioneered India's two wheeler industry, we've steered it through difficult times; now it is our responsibility to set the pace again.

Few key points about Hero Honda: Incorporated in January 1984 Worlds largest motorcycle manufacturer Two manufacturing plant in Haryana Record sales of 2.6 million bike in 2004 Actively involved in road safety.

HERO HONDA'S MISSION

Hero Hondas mission is to strive for synergy between technology, systems and human resources, to produce products and services that meet the quality, performance and price aspirations of its customers. At the same time maintain the highest standards of ethics and social responsibilities.

This mission is what drives Hero Honda to new heights in excellence and helps the organization forge a unique and mutually beneficial relationship with all its stake holders.

HERO HONDA'S MANDATEHero Honda is a world leader because of its excellent manpower, proven management, extensive dealer network, efficient supply chain and world-class products with cutting edge technology from Honda Motor Company, Japan. The teamwork and commitment are manifested in the highest level of customer satisfaction, and this goes a long way towards reinforcing its leadership status.

KEY POLICIES FOLLWED BY HERO HONDAAN ENVIRONMENTALLY AND SOCIALLY, AWARE COMPANYAt Hero Honda, our goal is not only to sell you a bike, but also to help you every step of the way in making your world a better place to live in. Besides its will to provide a high-quality service to all of its customers, Hero Honda takes a stand as a socially responsible enterprise respectful of its environment and respectful of the important issues. Hero Honda has been strongly committed not only to environmental conservation programmers but also expresses the increasingly inseparable balance between the economic concerns and the environmental and social issues faced by a business. A business must not grow at the expense of mankind and man's future but rather must serve mankind. "We must do something for the community from whose land we generate our wealth." A famous quote from our Worthy Chairman Mr.Brijmohan Lall Munjal

Environment PolicyWe at Hero Honda are committed to demonstrate excellence in our environmental performance on a continual basis, as an intrinsic element of our corporate philosophy.

To achieve this we commit ourselves to:

Integrate environmental attributes and cleaner production in all our business processes and practices with specific consideration to substitution of hazardous chemicals, where viable and strengthen the greening of supply chain.

Continue product innovations to improve environmental compatibility. Comply with all applicable environmental legislation and also controlling our environmental discharges through the principles of "alara" (as low as reasonably achievable). Institutionalize resource conservation, in particular, in the areas of oil, water, electrical energy, paints and chemicals. Enhance environmental awareness of our employees and dealers / vendors, while promoting their involvement in ensuring sound environmental management.

Example of ethical practice: Among the two and three wheelers, both selected models of Hero Honda

(Splendor and CD 100) are the most eco friendly two wheelers. They have scored above average in vehicle and engine design and are one of the very few four-stroke two wheeler fitted with any kind of pollution control equipment.

Quality PolicyExcellence in quality is the core value of Hero Honda's philosophy. We are committed at all levels to achieve high quality in whatever we do, particularly in our products and services which will meet and exceed customer's growing aspirations through:

Innovation in products processes and services. Continuous improvement in our total quality management systems. Teamwork and responsibility.

Example of ethical practice: On the comparative performance undertaken for two-stroke and four-

stroke two wheelers, the outcome clearly established that four stroke two-wheelers are better that two stroke two-wheelers with respect to both emission and fuel efficiency. The carbon monoxide (CO) and hydrocarbons and nitrogen oxides (HC+NOx) emitted by two-stroke two-wheelers (with catalytic converter)

are 23 per cent and 38 per cent, respectively higher than their equivalent four-stroke two-wheelers without catalytic converter.

Safety PolicyHero Honda is committed to safety and health of its employees and other persons who may be affected by its operations. We believe that the safe work practices lead to better business performance, motivated workforce and higher productivity. We shall create a safety culture in the organization by:

Integrating safety and health matters in all our activities. Ensuring compliance with all applicable legislative requirements. Empowering employees to ensure safety in their respective work places. Promoting safety and health awareness amongst employees, suppliers and contractors. Continuous improvements in safety performance through precautions besides participation

and training of employees.

Example of ethics followed: The performance and safety of your bike not only depends on

the world class design and workmanship assured by Hero Honda but also on the parts being used in the assembly line. Even the finest components manufactured need replacement from time to time. And to ensure the continued impeccable performance of your vehicle, the spare parts should also be made and replaced as good as the components fitted by Hero Honda.

To ensure this, we manufacture and procure the replacement parts according to the specifications and standards set by us and Honda Motor Co. As a responsible Hero Honda bike owner, we recommend that for your safety, long life and high performance of your bike, use only Hero Honda genuine parts.

HERO HONDA FOLLOWS 3Es IN FORM OF ETHICSAs a socially responsible company we urge you to join us in making this world a safer, healthier and more environment friendly place. At Hero Honda we like to promote the three Es.

Engineering which is the right technology, specifically designed for Indian customer requirements, and road conditions? It is exemplified in the 4-stroke Hero Honda engines that give you amazing reliability and fuelefficiency, year after year. We have always manufactures 4-stroke engines, ever since inception in 1985. Environment which is about ensuring that the high technology 4-stroke Hero Honda motorcycles continue to meet the most stringent pollution control norms at every level as they have since the very beginning? Education which is about promoting comfortable and safe driving, through a wide dealer network and service centers; as well as in educating people on road safety, in association with the traffic police and the transport department. Do remember that you and your family are not only riders, but pedestrian as well. It is as part of the Hero Honda family that We Care to drive home the message of Road Safety and a Healthy Environment.

Our Hero Honda, the environment and you. It is a three-way relationship that you should nurture, to reap the benefits for years to come. A well tuned bike keeps the environment healthy. Good riding practices will keep you healthy. Taking good care of your bike will always keep your bike healthy.

Here are simple steps to a healthy bike, healthy environment, and a healthy you.

Health and Environment Safety Facts and Information Social Responsibility

We are certain that you too will take pride in being a true Hero Honda Good Rider.

CODE OF CONDUCT FOR DIRECTORS AND SENIOR MANAGEMENT1. INTRODUCTION This Code of Conduct has been adopted by the Board of Directors of Hero Honda Motors Limited for its members and the senior executives one level below, the Directors, including all functional heads (hereinafter referred to as "Specified employee"). There are certain clauses of the Code, which are meant for Directors only such as attending meetings of the Board and Committee thereof. The Specified employees need to ignore such clauses.

The principal duty of the Board of Directors, along with management, is to ensure that the Company is well managed in the interests of its shareholders. The Board of Directors plays the central role in the Company's governance. It is the Company's decision-making authority on all matters except those reserved to shareholders or delegated to the management. The Board of Directors is not expected to assume an active role in the day-to-day management of the Company. II. GUIDELINES FOR CONDUCT Each director and Specified Employees seek to use due care in the performance of his/her duties, be loyal to the Company, act in good faith and in a manner such Director and Specified employee reasonably believes to be not opposed to the best interests of the Company. A Director and Specified employee should seek to also:

Make reasonable efforts to attend Board and committee meetings. Dedicate time and attention to the Company. Comply with all applicable laws, regulations, confidentiality obligations and corporate policies of the Company. Be independent in judgment and actions and to take all reasonable steps to be satisfied as to the soundness of all decisions taken by the Board of Directors.

III. CORPORATE BUSINESS OPPORTUNITIES In carrying out their duties and responsibilities, Directors and Specified employees should avoid:

Appropriating corporate business opportunities for themselves that are discovered through the use of Company property or information or their position as Directors and Specified employees. Using Company property or information, or their position as Director and Specified employees, for personal gain. Competing with the Company.

A corporate business opportunity is an opportunity:

1. Which is in the Companys line of business or proposed expansion or diversification? 2. Which the Company is financially able to undertake. 3. Which may be of interest to the Company?

A Director and Specified employee, who learns of such a corporate business opportunity and who wishes to avail of it should disclose such opportunity to the Company's Board of Directors. If the Board of Directors determines that the Company does not have an actual or expected interest in such opportunity, then, and only then, may the Director and Specified employee avail of it, provided that the Director and Specified employee has not wrongfully utilized the Company's resources in order to acquire such opportunity.

Example of ethical practice: Hero Honda commences production at its new manufacturing plant in

Haridwar. Hero Honda and its ancillaries have already generated direct employment opportunities for over 2,000 people in the state. Along with employment, emphasis has also been laid on training and learning. The plant has set up a Gurukul within the complex, which serves not only as a learning centre for all employees who join the plant, but also for their continuous development and up gradation of skills.

IV. CONFLICTS OF INTEREST

Each Director and Specified employee should Endeavour to avoid having his or her private interests interfere with: i) ii) The interests of the Company or ii) His or her ability to perform his or her duties and responsibilities objectively and effectively.

They should avoid receiving, or permitting members of their immediate family to receive, improper personal benefits from the company, including loans from or guarantees of obligations by the Company, except as may be provided in their employment contract.

They should make a full disclosure to the entire Board of any transaction or relationship that such a Director and Specified employee reasonably expects could give rise to an actual conflict of interest with the Company and seek the Board's authorization to pursue such transactions or relationships.

V. COMPANY PROPERTY In carrying out their duties and responsibilities, Directors and Specified employees should Endeavour to ensure that management is causing the Company's assets, proprietary information and resources to be used by the Company and its employees only for legitimate business purposes of the Company.

VI. CONFIDENTIAL INFORMATION Director and Specified employees should maintain the confidentiality of information entrusted to them in carrying out their duties and responsibilities, except where disclosure is approved by the Company or legally mandated or if such information is in the public domain.

The Company's confidential and proprietary information shall not be inappropriately disclosed or used for the personal gain or advantage of any Director and Specified employees or anyone other than the Company. These obligations apply not only during a Director's and Specified employee's term, but thereafter as well.

VII. FAIR DEALING In carrying out their duties and responsibilities, Director and Specified employees should Endeavour to deal fairly, and should promote fair dealing by the Company, its employees and agents, with customers, suppliers and employees. Director and Specified employees should not seek to take unfair advantage of the Company through manipulation, concealment, abuse of privileged information, misrepresentation of material facts or any other unfair dealing.

VIII. COMPLIANCE WITH LAWS AND REGULATIONS In carrying out their duties and responsibilities, Directors and Specified employees should comply, and Endeavour to ensure that the management is causing the Company to comply, with applicable laws, rules and regulations. In addition, if any Director and Specified employee becomes aware of any information that he or she believes constitutes evidence of a material violation of any securities or other laws, rules or regulations applicable to the Company or the operation of its business, by the Company, any employee or another Director and Specified employee, then such Director and Specified employee should bring such information to the attention of the Chairman of the Audit Committee. IX. INSIDER TRADING Director and Specified employees should observe all applicable laws and regulations including the Company policies and Codes as applicable to them with respect to the purchase and sale of the Company's securities. It is the responsibility of each Director and Specified employee to become familiar with and understand these laws, regulations, policies and codes and should seek further explanations and advice concerning their interpretation, if required. Any waiver of or amendments to the Company's policies or Codes may be made only by the Company's Board of Directors and will be disclosed promptly as required by applicable laws and regulations including the rules of any exchange on which the Company's securities are listed or traded.

Director and Specified employees should direct questions regarding the application or interpretation of these guidelines to the Company Secretary/Compliance Officer.

CORPORATE SOCIAL RESPONSIBILITY (CSR)STAKEHOLDER TIES AT THE GRASSROOTS Hero Honda Motors takes considerable pride in its stakeholder relationships, especially ones developed at the grassroots. The Company believes it has managed to bring an economically and socially backward region in Dharuhera, Haryana, into the national economic mainstream.

An Integrated Rural Development Centre has been set up on 40 acres of land along the Delhi-Jaipur Highway. The Centre-complete with wide approach roads, clean water, and education facilities for both adults and children-now nurtures a vibrant, educated and healthy community. The Foundation has adopted various villages located within vicinity of the Hero Honda factory at Dharuhera for integrated rural development. This includes:

Installation of deep bore hand pumps to provide clean drinking water. Constructing metalled roads and connecting these villages to the National Highway (NH -8). Renovating primary school buildings and providing hygienic water and toilet facilities. Ensuring a proper drainage system at each of these villages to prevent water-logging. Promoting non-conventional sources of energy by providing a 50 per cent subsidy on biogas plants.

Other key projects taken up by the Foundation include: Raman Munjal Vidya Mandir The Raman Munjal Vidya Mandir began with three classes (up to class II) and 55 students from nearby areas. It has now grown into a modern Senior Secondary, CBSE affiliated co-educational school with over 1200 students and 61 teachers. The school has a spacious playground, an ultra-modern laboratory, a well-equipped audio visual room, an activity room, a well-stocked library and a computer centre. Raman Munjal Memorial Hospital Multi-specialty hospital equipped with the latest diagnostic and surgical technology. The Raman Munjal Memorial Hospital provides healthcare to the rural population in and around Dharuhera, and also caters to accident and trauma victims driving along the Delhi-Jaipur highway. Raman Munjal Sports Complex The Raman Munjal Sports Complex has basketball courts, volleyball courts, and hockey and football grounds are used by the local villagers. In the near future, sports academies are planned for volley ball and basket ball, in collaboration with National Sports Authority of India.

Vocational Training Centre In order to help local rural people, especially women, Hero Honda has set up a Vocational Training Centre. So far 26 batches comprising of nearly 625 women have been trained in tailoring, embroidery and knitting. The Company has helped women trained at this centre to set up a production unit to stitch uniforms for Hero Honda employees. Interestingly, most of the women are now self-employed. Adult Literacy Mission This Scheme was launched on 21st September, 1999, covering the nearby villages of Malpura, Kapriwas and Sidhrawali. The project started with a modest enrolment of 36 adults. Hero Honda is now in the process of imparting Adult Literacy Capsules to another 100 adults by getting village heads and other prominent villagers to motivate illiterate adults. Marriages of underprivileged girls Marriages are organized from time to time, particularly for girls from backward classes, by the Foundation by providing financial help and other support to the families. Rural Health Care Besides setting up a modern hospital, the Foundation also regularly provides doorstep health care services to the local community. Free health care and medical camps are now a regular feature in the Hero Group's community outreach program.

As a part of Hero Honda We Care, the companys Corporate Social Responsibility (CSR) program,

the company has lined up several initiatives that promise to bring about significant improvements in the lives of people residing in Haridwar and neighboring areas. This is reflective of the sustainability mantra that Hero Honda has always believed in and followed wherever it does business.

A group company will be setting up a Technology Park, two Industrial Parks and a shopping mall within the plant complex over the next two years. Housing issues will be addressed with the construction of two residential complexes. Accessibility of quality healthcare and education are other priority areas, and accordingly the company plans to set up 200-bed hospital and a school within the plant complex. All this envisions creation of an industrial cluster in Uttarakhand which will multiply generation of wealth and prosperity in the region.

UNIQUE PROGRAMME OF ROAD SAFETYAs a caring company, Hero Honda has taken up the initiative to inculcate a sense of road safety and good riding habits to its customers and public at large. Safety Riding Initiatives PHASE I: Safety Launch in Oct99from India Gate, New Delhi

Invitation to all State Police Chiefs All State Traffic Police Participation And Training During Launch Safety Launch in all Metros In India with Traffic Police

PHASE II: Hero Hondas Unique S4 Safety Concept In India S4 Concept (Sales, Service, Spares, Safety)First time in the automobile Industry Safety education to customers at Hero Honda Dealerships -An integral part of Safety Corner At Showroom Safety Education Material good rider booklets Safety leaflets Safety Education Video For Customers

Motorcycle Delivery Process at 4S Dealerships

PHASE III: Hero Honda wishes to set-up an exclusive 2-wheeler Safety Riding Training School at Delhi in association with the Transport department, Govt. of NCT, Delhi

UNETHICAL BEHAVIOUR PRACTISED BY HERO HONDA

These are some direct complaints launched by the customers of Hero Honda

I want to complaint about the Hero Honda Showroom (Nikhi Motors), which is located in karnataka, Bangalore. I booked HH glamour with disc brakes on December 12, 2006. The next day, that is December 13, 2006, a representative of this showroom gave me a call and told me that the stock has arrived and I should come and pay the down payment, so I dropped to the showroom and inquired about the vehicle. They told the amount to be paid and took the cash. After receiving the cash, they are informing me that they do not have HH glamour with disk brake so asked me to go with the drum brakes. I told them that I want only HH glamour with disc brakes, so they told me to wait for two more days. I waited and waited for at least two weeks. After two weeks, when I reached the showroom, they are informing me that there is some problem with the HH glamour bike (disc brake), so the company is not willing to send the consignment of HH glamour disc brake from Dehli, so go with drum brakes. I told them I don't want the bike so refund the amount, but they were not ready to refund the amount and started pursuing me to go with drum brakes. Is this the way that a company handles a customer.

I have purchase a Hero Honda CD -Deluxe bike in mid of the Dec. 2006 from Auto Needs, Gurgaon. From the very first day, it gave me 49-50KM/lt mileage. At the time of purchase a representative of the showroom told me that it gives 80 KM/lt mileage. Further, it gives very poor performance at the time of using 3rd or 4th gear. The gear shift is very hard while we are changing the gear. The Handle of this bike is also very week. Overall, I am totally dissatisfied with this bike.

I have buy Super Splendar Motor Cycle from Surya Motors Abohar through Nagpal Motors Malout. After Three services from Nagpal Motors Malout it is giving per Liter average of 35-40 k.m. I do complain regarding this to Nagpal Motors Malout but all in vain.

I purchased i hero honda pleasure few month ago and and i am facing self start problem from the first day. They also replaced battery and charged it several times but i am not getting the solution and lot of time get wasted in this things to go there and get checked every time.

I have purchased one bike model Ambition-135 (Silver color) on 20th Feb'2005 from Brij Bi-Wheelers Mathura. The bike is working perfectly all right and run about 7200 km till date. The only problem is now in its looks. At the time of purchase, it had got some plastic lamination on sides beside the seat and in the front near head light. It is not possible to remove the stickers and the bike is looking really dirty. I have gone to your service center for washing and servicing, but the problem is not solved. I love my bike really much and many of my friends got inspired from me and purchased ambition or other hero honda bikes, as i am very much influenced from your services and works. Please try to solve my problem to remove the plastic cover from the bike, so that my faith in hero honda always remain as it is today. I contacted dealer in Mathura (Mr. S.K.Pradhan-9897003866) he told me that the problem cannot be solved. I mailed you earlier through your site but nobody responded back. Kindly help me to solve this problem, so that the faith can be maintained in Hero Honda.

I want to complaint about the Hero Honda Showroom Morani Motors Jaipur Rajasthan. After servicing from Morani motors When I went to take bike, he told me that you are not using your bike from last one month because of that battery current wire is break and we are not responsible for that you go to some other shop. He is not accepting his fault and when I told him that you have to inform me earlier then he said we only inform you after full servicing.His behavior is not good towards us. Before giving bike to Morani Motors there is no such type of any problem in bike. It already run 7000km without any such problem.

I want to complaint about Hero Honda Ambition Bike. I have purchased Hero Honda Ambition in October-2002. After 15 days, i faced lots of technical problems with my bike that i am not able to explain in this mail thread. During 2 years of journey with Ambition in my life, the frustration I faced was unbelievable as after every two weeks, my bike was at service point to sort out technical problems. I thought that HeroHonda launched that product without any performance testing and then they played with customers bikes to resolve technical defects. This is a very bad experience from Hero Honda.

Finally i sold my bike in July 2006 at the price of 23000. Oh God.. What is depreciation cost in 4 years of Hero Honda product??.

I bought a Hero Honda Passion Plus Motorcycle in August 2004 at Ravi Motors, Tumkur.

Since then I have been tortured by your after sales service. I gave my bike for service at Max Motors, Rajkumar Road. These people are devils agents. When I gave my bike for service, everything was perfect. I gave it only as per the milage plan that every 2-3000 Kms, it has to be serviced. But when I got my bike back from service, i went for a test drive and found that the chain was making a lot of noise. I went back to service centre and after 30 minutes, one guy came and told Chain Sprocket is broken and I have to pay 650 if I want it repaired. I told him when i gave the bike for service it was perfect. He then called his manager and he started shouting at me. He said that they do only those repairs that I mention in job card. I told him that before service chain sprocket was perfect and now after the service the chain sprocket is broken. The manager shouted that they only do minor adjustments and its not their fault and asked me to take my bike and leave. Though I was tempted to escalate the issue, it was at 11.45 in the morning and I had left all my other work and was waiting there. Can you kindly inform me what gave Hero Honda, the inspiration to provide such pathetic service? Did I ever refuse to pay for the service? Did I ever demand my bike to be returned in minutes? All I wanted was the faulty parts to be rectified and the bike to serviced to good condition so that my drive will be smooth. But Hero Honda only wants to retain their Worlds No1 slot (I doubt that) and they do not care how the customers and their bikes are treated once Hero Honda gets money.

This can be resolved by following the ethical practices. Cheating on the customers is unethical on part of the company. They must practice what they preach.

THE INFAMOUS CASE

Subsidiary of Honda: 3000 employees: Plant set up in 1999 Aim: Produce product of highest quality at reasonable price Honda philosophy of 3 joys: Buying/selling/manufacturing

Alleged indifferent & authoritarian Indian middle mgt.

Alleged assault by Japanese Manager

Failed to meet WM expectation: Diwali gift/leave/Lack of respect Workers attempt to unionize: Mgt.s resistance and action: Violence on 25 JulyMedia coverageState Govt. involvement Loss due to strike/Go-slow/ Lockout: approx 28MM USD

Key Issues and Problems:

1. Mgmt.s approach to practicing a non-union model made them blind to reality DID NOT LISTEN

TO WORKERS2. Workers viewed Mgmt activity as coercive and repressive 3. Incompetent people mgt. by Indian Middle managersIndifference 4. Indian mgmt. blocking direct access to top company executive 5. The 3 joys of HONDA were used as a means of control 6. Issues in cross-cultural management 7. Japanese didn't understand issues in managing Indian people 8. Failure of mgt. to realize importance of Diwali in Indian IR 9. Tokenism of conciliation in resolving collective issues 10. Complacency on the part of Indian mgrs. about labour power

Police beating HONDA workers on 25th July, 2005

Workers meet Sonia Gandhi against alleged high handedness of Honda management and the police

Key causes of the HONDAs Difficulty

1. Management taking Workers for granted:

Power of the former leadership not taken into account he was well liked Mr. Singh had been well liked No safety valve for Workers or way to address Grievances Overlooking the importance of Diwali to Indians giving only a small gift (Rs. 600 given) Worker facilities not provided - request dismissed Strict system of granting leave: Sermons given Idiosyncratic VP (Mfg.): A hard task master with 14 ft stick

Kicked a WM who was 2 minutes late after tea

Too many memos issued: Fear of managerial authority WM perceived partiality in posting by managers: Divide & Rule also Big difference between Hero-Honda & HMSI salaries: WM living together Negative policies of the mgt. regarding union-formation made workers more determined - created fertile ground for the flare up High-handedness of the police, fighting fire with fire

2. Ill prepared HR/IR team not able to tell the emperor he had no clothes Poor HR Advocate Role HR/IR chief as an assistant mgrHe reported to Mfg. Head

3. Small Number of HR/IR Team: --Only 10-12 out of 3000 people

4. No internalization of HR procedures & Practices: No procedure for charge sheet Japanese thought people never revolt because they are gentle and not aggressive

5. No alignment of Business & HR/IR Strategy

6. Low salary compared to Hero-Honda (same region)

7. Contract Workers removed every 6 months: Anguish constant training

Lessons in People management from the HONDA case

1. Leadership matters 2. Competent HR department is key 3. Well crafted and communicated Mission and Vision 4. Maintain channels of communication 5. HR Strategy must align with and support business 6. Listen to Employee concerns and issues for Organizational Justice 7. Use HR Interventions (BOTH HARD AND SOFT) as tools for success (welfare plans, empowerment, reward and recognition, etc.) 8. Keep cross-cultural issues in view 9. Establish a sense of urgency 10. Recruit and Retain Talent - right person In right job at the right time 11. Be clear about performance and results let them drive success 12. Create short term wins (reward and recognition)

SUGGESTIONS TO MAINTAIN ETHICS

I. CUSTOMER SATISFACTION

Market-oriented industries like Hero Honda, Tata etc. live and die with the satisfaction of their customers and thus view customer satisfaction as their life line. Thus extensive efforts are made to gauge customer expectations and reactions to services in a continuous effort to improve, build and expand market share. If their customers are unhappy, industries know they are unlikely to survive. If their customers are happy, the use of their products and services and the likelihood of greater profits increase. Organizations can take one or more of the following steps to have customer satisfaction as it has become an ever more central part of organizational culture: 1. A 100 percent customer satisfaction mission: Organizations committed to customer satisfaction revise their focus and mission to emphasize customer satisfaction and commit to analyzing organizational practice and service delivery against the new mission statement. 2. Staff training, empowerment, and rewards: To improve staffs attitudes and skills, high-performing organizations provide training and retraining, establish employee incentives, and reward staff for achieving customer service standards. They empower staff with the exibility and authority to resolve customer complaints and make on-the-spot decisions related to customer satisfaction. 3. Customer feedback and accountability: Customer feedback allows providers to ascertain directly from customers whether intended changes and improvements are being experienced by families receiving service. Ongoing feedback mechanisms are essential to review service improvements nd make sure that customer service strategies adopted by the agency are actually achieving desired impact on families as well as meeting customers expectations.

4. Incentives and consequences: Although performance incentives are important in all customer-focused organizations, they are especially important in public and nonpro t agencies where the pro t motive is

absent. Some rewards and incentives might include awards for managers, divisions or units, and individual frontline staff; funds for a division to augment their customer satisfaction approaches; and recognition of improvements made through public announcements and other published materials for the public. For example, participating agencies will agree to have regularly published performance reportsshared internally and perhaps competitively across divisions andsubmitted to political leaders, parent organizations and funders who care about quality service. 5. Customer-oriented culture: Creating and instilling a culture of customer service is the hallmark of a successful organization in a market-driven approach. This culture includes both management and frontline employees and involves a host of management and organizational processes such as staff selection and training, teaming and other structures, customer satisfaction measurement, and accountability feedback loops.

II. ENVIRONMENT CARE

1.Adopt environment management systems (EMS): Almost half of the automobile sector has adopted environment management systems (EMS) standards. However ISO 14001 adopted by automobile companies is not the actual reflection of their environment management as these have just assembly plants. Most of their processes are outsourced and the major pollution happens at vendor's site and during product use and disposal. Thus, ISO 14001 only takes care of very small percent of pollution generated by the companies. Thus, automobile sector must adopt an environment management system, which reflects the environmental aspects of automobile business and not to use the existing system, which is production centric.

2. Government on its part should come out with economic instruments as its major tool to regulate automobile companies. Pollution control body too needs a complete rethinking of its regulatory approach to this sector. Wastewater characteristics, solid/hazardous waste management, paint sludge incineration, dioxin and furans are some major aspects of automobile pollution during manufacturing process-regulations for which are either weak or non-existent. Downstream pollution checks and supply chain management are also some issues where regulatory bodies will have to do some soul searching.

3. Study based on analysis of three diesel-fuelled mass transport vehicles and two CNG fuelled mass transport vehicles clearly showed that CNG fuelled vehicles are far better in terms of tail pipe emissions than the diesel fuelled mass transport vehicles. CNG-fuelled vehicles have as much as five times lower particulates and overall 73 per cent lower emissions than their diesel counterparts. So CNG fuelled vechicles must be initiated.

Some other findings related to production process: 1) The entire sector uses paints that contain heavy metals and are based on solvents. No company uses water

based irrational

paints.

2) The regulatory standards for wastewater characteristic applicable to the automobile sector are lax as well as

Green IT Initiatives that we have taken New and Energy Efficient Datacenter with Power Management Features Virtualization and Server Consolidation TFTs in place of CRTs Reduction of Printers Video Conferencing / Collaboration Tools to reduce travel Buying of Energy certified equipment replacing old inefficient equipment

As next step, working on: Recycling & Disposal Policies Paper less Office Energy Audit

III. EMPLOYEE WELFARE

It is the responsibility of the management to ensure that employee welfare initiatives should not be put on the back burner in the name of cutting costs. Being prudent in spending is the key here, with constant communication to ward off adverse rumors and protect employee sentiments. To earn employee goodwill and loyalty, particularly at a time when the rate of attrition is at all time low.

Team spirits and collaboration should be encouraged among employees. Initiatives like celebrating success/achievements in small ways go a long way in raising the confidence and morale of the team. Re-skilling/cross-functional training of employees to keep them engaged. Counseling on managing their personal financial matters better-a necessity during the tough times. Celebration of success and achievements to boost employee morale, even if the celebrations are in small

scale. Felicitating the best performersTo reward the best performers in forms of accolades or prize

Money The Human Resource Department of the firm should constantly be in touch with the employees and should keep a constant check on employee satisfaction viz. surveys. It should be more transparent in its working (while doing the surveys). Also, the Human Resource Department should take a feedback from employees while they are leaving the organization as to what they liked and what they disliked in the organization. Efforts should be made to reduce the chances of biasness while giving the feedback. The Human Resource Department should work more on grievance redressal. For this, there should be good communication existing between the top-level , middle-level and lower-level management. One of the important factors in the success of the organization is that the work environment must be congenial enough to motivate workers to give whole-hearted co- operation. So, the work environment should try to be improved constantly. Suggestion system can be a strong employee motivation method because in this the employees are given the opportunity to say something, thereby increasing their sense of belonging in the organization thereby, keeping them happy in the organization. The salary structure of the employees should be revised timely as per the performances so as to keep them satisfied and constantly motivated for better performances.