MGT4162 Managing the Multinational Organisation Assessment Answer

Introduction

Toyota is a leading Japanese automobile sector producing about 10 million vehicles per year. It has joint venture with Kirloskar Group for its presence in India. The organisation is operating in various countries where human resource management approaches are different as compared to Japan. Indian market is diverse in term of culture and considerations and therefore, Toyota is continuously facing significant issues to implement an optimal human resource management practice. The presented report will focus on challenge such as employment relations and discuss the issue in details. There is also discussion of potential factors from internal and external environment that are causing the challenge. The report also summarises the recommended the organisation can consider as a solution to the challenge.

The HRM Challenge in Toyota in India: Employee Relations

The organisational success or failure is directly proportional to the efforts of employees and without them, it is challenging to meet the strategic outcomes (George, 2015). Employee relations in Toyota means to individual and collective relationship between employees and employer in workplace. It includes practical, contractual and physical and emotional dimensions of employee relations. Toyota has strong employee relations in several countries and it helps to achieve high productivity and performance (Liker and Ross, 2017). In Indian context where automobile market is at unrest, the organisation has recently experienced challenges in employee relations. For Toyota in India, employee relations are crucial to manage to achieve organisational performance while the current business market is being unrest for the organisation (Baber, 2018).

Toyota is well-known for its lean production and it leads the organisation to manage the resources by putting the organisational values and benefits ahead (Coetzee et al., 2016). In 2006, employee union in manufacturing plant near Bangalore in India went on strike and demanded the reinstate of dismissed and suspended employees and improve work conditions of the plant. The employees are suspended and dismissed because of their attacking behaviour on supervisors (Cite-hr, 2022). At other side, union claims that they are removed from workplace because of their active participation in trade union which the organisation wants to suppress. Later, the plant conditions are marked as ‘slave-like’ and inhuman and it has increased the dispute. This issue resulted in a financial loss of 700 million Indian rupees (Das, 2020).

In beginning of 2021, the similar challenge occurs again. The union was on strike because of the suspension of one workman. There are around 3500 employees in this plant but around 1600 employees came back to work after a few days by agreeing for good work environment and employment relations (Ghosh, 2021). The manager appealed all the workers to return on work in March, 2021 and ensures a respect for terms of mutual understanding and trust.

In the context of Toyota in India, mainly four sub-issues are identified and they are together representing the poor employee relations at workplace. First, there is concern of workplace conflicts. It is common to have disputes and disagreement between manager and employees but in certain cases, it results in ineffective communication (Zeller, 2020). The managers may not be able to please everyone at workplace but consistent disagreement can lower the morale of employees and situations become worse. In strikes, managers tried to send notices to employees to resume the work and for that, they imposed essential policies and approaches but it has reduced overall trust and bond with employees (Rani and Sen, 2018). Second, workplace bullying and harassment has resulted in increased absenteeism and negative brand reputation and reduced performance. In recent strike of 2021, the employee union protested against salary reduction and harassment by management (The Hindu, 2021).

Third, workplace environment is also a concern for employees as they have continuously reported in strikes and meetings that work environment is not safe for them and they need improved considerations such as medical leaves and safety measures (India Express, 2021). Forth major point of dispute was related to salary as the organisation is moving toward hybrid work culture where many employees are continuing their work from home, there is significant cut in salary with add-on of flexibilities.

Management at Toyota is good to discover and resolve the most of employee relations concerns but it also failed to address requirements of employee unions. Decreased employee relations is reflecting in employee’s trust, intentions to continue the work, jog satisfaction, extra-role and in-role performance and sense of obligation (Moonan, 2021). The ongoing concerns and their financial loss indicates that the organisation needs to improve employee relations because without that, it is even challenging to recruit and retain talents for operations.

The Internal and External Reasons for the Challenge

There are several internal and external factors that are resulting in poor employee relations. Human resource management needs to understand these factors so that the overall impact on execution of organisational goals can be minimized and barriers in operations and performance can be eliminated. Poor employee relations generate when there is significant mismatch between employer and employees for benefits and services.

Internal Reasons

Considering the historical strikes in Toyota, behaviour of managers and employees toward the work is a most toxic factor to lead poor employee relations. Employee unions complained several times in their responses that they are not satisfy with the behaviour and attitude of the managers. From respondents for the job, nearly one-forth of them resigned from the job at same time when they realised potential mismatch with their supervisors. Supervisors in several functional areas are failing to establish and manage a good relationship with employees (6q.io, 2022). An imbalance of task and people skills among managers is a major cause of disputes with employees and increases employee turnover.

Another major internal reason is decline of pay raise requests. In Toyota, employees were on strike several times and in each time, union has highlighted the concern of salary. The organisation has high inequalities in salary in various departments and it becomes the major point of disengagement. The organisation has previously enforced the employees to resume the work quickly to avoid loss of employment (George and Sinha, 2017). The issue of inequal salary raise observed as the organisation has lack of integration of employees in performance management. Issues in performance management reflects as inaccuracies in decisions.

In a recent case, the organisation apologised to employees and community because one of the employees suicided by mentioning overwork at workplace. In further investigation, it is identified that the organisation enforced some employees for overwork against higher compensation so that the production deadlines can be achieved (Live-Mint, 2022). The situation occurred because of the long absenteeism of the employees from workplace. It indicates that the organisation has lack of flexibilities for the employees. Employees in manufacturing site are not getting flexible schedule and it is impacting their personal and professional life (Nathan and Ahmed, 2018). Employees in some departments are constraint to their schedule and it creates stress and inflexibilities in their schedule.

Workplace bullying, unclear policies and unresolved disputes are other internal factors impacting the organisation to retain sustainable relationship with employees (Live-Mint, 2022). Employee unions have highlighted in strikes that the organisational environment is toxic and stressful due to some supervisors and there is poor monitoring and governance for such behaviours (India Express, 2021). It reflects in employee absenteeism, damage to organisational reputation and decrease in team morale. Similarly, unclear polices for employment terms and conditions, use of assets and services, and code of conduct ends up as a cause of dispute with employees (Shields et al., 2015).

External Reasons

There are several factors on that the organisation and employees may not have control. For instance, employee relations lead to end when employees find competing career opportunities. The employees may express low interest in operations and services when they have access to better paying jobs (Osborne and Hammoud, 2017). However, there are several causes including personal growth perspective that enable the employees to have one eye open for competitive job even when they are working as a part of the business. It happens when the employees are not convinced with their current position and business and in such cases, they easily get distraction from other endeavours (Brown et al., 2015). In a context of Toyota, it is identified that many employees are working in a hybrid-model so that they can come office and manage work from home also (Kochan et al., 2018). Employees may prefer to manage a side hustle or freelancing which makes it difficult for them to show their full-dedication to business.

Human emotions are another major factor lead an impact on employee relations. For instance, employees who are pulled emotionally for their family situations may have a distraction with their job. Similarly, the employees who are managing the health of ailing parents and dependent then it becomes difficult for them to invest their energy, time and efforts optimally at workplace (Eldor and Vigoda-Gadot, 2017). Immigrations are another emotional aspect that can impact the employees for their commitment to the job.

Technological changes are third major external reason that impact employee relations. For example, Toyota has improved customer services, production process and other business functions through integration of advanced technologies and it is substituting the human resources. Indirectly, there is cut in resources for the conventional jobs at workplace and they are being replaced with technically sound resources to support competitive advantages (Stone et al., 2015). It is required to do so that that the organisation can manage profitability and ensure performance in business functions.

Similarly, legal and economic policies externally impact the organisation for employee relations. A rapid change in legal policies can impact the organisational human resource management practices. Management at Toyota required to ensure that new recruitment and retention, rewarding schemes, performance management and training and employment contracts are integrating the regulations. Further, the economic situations impact the business and its relationship with employees (Stewart and Stanford, 2017). For instance, the organisation is facing high taxes on products in India and it enforces the organisation to increase product price and cut in cost for employees.

Solution to the Challenge

Japanese management approaches are known for their performance, reliability and consistency. However, each hosting country may have some differences and therefore, it is challenging to adopt the approaches as it is (Kochan et al., 2018). As a solution to the challenge, it is important to understand that the organisation has integration of four principles in practices. First, it can manage open communication at various levels in organisational structure. It enables the organisation to share opinions and feedbacks with employees and the management can listen their concerns before the concerns take the form of disputes and disagreements. Open communication is also required to gain the trust of the employees and establish a channel through which employer and employees can share their feedbacks. Second, recognition is required to express (Thunnissen, 2016). Manager can praise the employees for their contribution and efforts so that employees can feel profound. It can help the organisation to cultivate the environment of work-engagement and innovation.

Third, constant feedback is important in Toyota as it can help the employer and employees to understand the expectations from each other. It not only helps to develop understanding but also enables the resources to find the potential area of conflict so that prior decisions can be made. Forth, the organisation should invest in their employees. It means to provide them required services and supports so that they can learn, develop skills and contribute effectively. Asides of these, the organisational employee relations issue can be resolved to a higher degree using following solutions:

Improve Management

 the organisation has poor relationship with employees due to bad managers and supervisors. It is recommended to identify the employees who are causing the problems at beginning so that the problem domain can be minimized. Along to measure the performance of the employees and managers, it is important to review the behaviour, attitude and perception of the employees for the work and organisation (Shields et al., 2015). Leadership and management skills can be refreshed to ensure that individual is working in benefits of the organisation.

Performance Monitoring

 the organisation should widen the role of performance monitoring. It needs to ensure that performance monitoring is including multiple criteria so that individual’s contribution can be measured effectively. It enables the organisation to reward the employees for their achievement and creates a sense of being valued and responsibility for the outcome.

Flexibility

The managers and supervisors need to make sure that the employees have sufficient flexibility in their schedule. It means to have proper balance of work-life for all employees at various levels so that they can work on their personal and professional goals. It also motivates them for higher productivity and performance (Shields et al., 2015). The lack of balance of work-life factor can cause physical and mental health issues and results in feeling of burnout.

Clarity in Decisions

The organisational policies and procedures should be clear so that the potential issues that can weaken the employee relations can be mitigated. Policies should be clearly communicated to the resources so that they can understand what is being expected from them at workplace. Similarly, the management must be honest and transparent when addressing the issue of harassment and bulling. It means to make unbiased decisions when complaints are received for supervisors and others (Holland et al., 2017). Alternatively, the organisation can ensure that individual at workplace is aware with bullying and harassment related policies and code of conducts to make the workplace safer for all.

Conflict Mitigation 

It is not possible to solve all the conflicts immediately but leaving them unattained for a long-time means to invite misunderstanding and lead further explosion of the concerns. Therefore, the managers need to ensure that conflicts are resolved on priority and decisions are made by integrating employees (George, 2015). If a conflict is not resolvable completely, negotiation and change is required to reach a more acceptable solution.

Conclusion

Lean production and business process automations are major features that make Toyota ahead in automobile industry. The organisation has presence in multiple countries including India where workplace environment is completely different as compared to origin country Japan. Human resource management is not straight forward in Indian market because there is significant heterogeneity in culture and employees’ preferences for the work. Employee relations in Toyota are in questions considering the previous strikes and news. This report has concluded that the organisation needs to improve the human resource management, especially regarding employee relations so that it can retain the talents and avoid disruptions in business operations. The report has discussed that four-pillars to retain employee relations are important for Toyota. Improved in management practices can help to establish a sustainable relationship with employees. Toyota needs to improve the performance management approach while ensure that the employees have flexibility and alternatives to communicate their feedbacks to management regarding employment contracts and policies. It can help the organisation to mitigate the issues before they take a big form.

References

6q.io, 2022. 7 Toxic Factors That Damage Employee Relations. Retrieved from: https://inside.6q.io/damage-employee-relations. Accessed On: 27 March 2023.

Baber, H., 2018. Service quality perception of customers–A study of Toyota motors in India. Organizations and Markets in Emerging Economies , 9 (18), pp.311-323.

Brown, S., Gray, D., McHardy, J. and Taylor, K., 2015. Employee trust and workplace performance. Journal of economic behavior & organization , 116 , pp.361-378.

Cite-hr, 2022. Labour unrest at Toyota India. Retrieved from: https://www.citehr.com/25642-labour-unrest.html. Accessed On: 27 March 2023.

Coetzee, R., Van Dyk, L. and Van der Merwe, K., 2016. Lean implementation strategies: how are the Toyota Way principles addressed?. South African Journal of Industrial Engineering , 27 (3), pp.79-91.

Das, A., 2020. Toyota Kirloskar issues lock-out notice in Bidadi plant. Retrieved from: https://timesofindia.indiatimes.com/business/india-business/toyota-kirloskar-issues-lock-out-notice-in-bidadi-plant/articleshow/79174745.cms. Accessed On: 27 March 2023.

Eldor, L. and Vigoda-Gadot, E., 2017. The nature of employee engagement: Rethinking the employee–organization relationship. The International Journal of Human Resource Management , 28 (3), pp.526-552.

George, C., 2015. Retaining professional workers: what makes them stay?. Employee relations , 37 (1), pp.102-121.

George, C., 2015. Retaining professional workers: what makes them stay?. Employee relations , 37 (1), pp.102-121.

George, S. and Sinha, S., 2017. Labourscape and labour space in post-liberalised India: Critical reflections. In Redefined Labour Spaces (pp. 17-44). Routledge India.

Ghosh, M., 2021. Toyota Kirloskar’s worker's union ends strike after four months. Retrieved from: https://www.livemint.com/auto-news/toyota-kirloskar-s-worker-s-union-ends-strike-after-four-months-11614690274549.html. Accessed On: 27 March 2023.

Holland, P., Cooper, B. and Sheehan, C., 2017. Employee voice, supervisor support, and engagement: The mediating role of trust. Human Resource Management , 56 (6), pp.915-929.

India Express, 2021. Bengaluru: Toyota workers’ union calls off strike. Retrieved from: https://indianexpress.com/article/india/bengaluru-toyota-workers-union-calls-off-strike-7213128/. Accessed On: 27 March 2023.

Kochan, T.A., Lansbury, R.D. and MacDuffie, J.P. eds., 2018. After lean production: Evolving employment practices in the world auto industry . Cornell University Press.

Liker, J. and Ross, K., 2017. The Toyota way to service excellence. Lean transformation in service organizations. Yhdysvallat: McGraw-Hill Education .

Live-Mint, 2022. Toyota suicide case: Toyota apologizes for employee suicide after overwork, harassment. Retrieved from: https://www.livemint.com/companies/news/toyota-suicide-case-toyota-apologizes-for-employee-suicide-after-overwork-harassment-11643693271669.html. Accessed On: 27 March 2023.

Moonan, C., 2021. The transfer of Japanese human resource management in the Indian automotive industry (Doctoral dissertation, University of Leeds).

Nathan, D. and Ahmed, N., 2018. Technological change and employment: Creative destruction. The Indian Journal of Labour Economics , 61 , pp.281-298.

Osborne, S. and Hammoud, M.S., 2017. Effective employee engagement in the workplace. International Journal of Applied Management and Technology , 16 (1), p.4.

Rani, U. and Sen, R., 2018. Labour relations and inclusive growth in India: New forms of voice. In Industrial relations in emerging economies (pp. 27-68). Edward Elgar Publishing.

Shields, J., Brown, M., Kaine, S., Dolle-Samuel, C., North-Samardzic, A., McLean, P., Johns, R., O'Leary, P., Plimmer, G. and Robinson, J., 2015. Managing employee performance & reward: Concepts, practices, strategies . Cambridge University Press.

Shields, J., Brown, M., Kaine, S., Dolle-Samuel, C., North-Samardzic, A., McLean, P., Johns, R., O'Leary, P., Plimmer, G. and Robinson, J., 2015. Managing employee performance & reward: Concepts, practices, strategies . Cambridge University Press.

Stewart, A. and Stanford, J., 2017. Regulating work in the gig economy: What are the options?. The Economic and Labour Relations Review , 28 (3), pp.420-437.

Stone, D.L., Deadrick, D.L., Lukaszewski, K.M. and Johnson, R., 2015. The influence of technology on the future of human resource management. Human resource management review , 25 (2), pp.216-231.

The Hindu, 2021. Toyota Kirloskar Motor, strike, recall notice, workmen, . Toyota issues final recall notice to workers yet to return from strike. Retrieved from: https://www.thehindubusinessline.com/companies/toyota-kirloskar-motor-issues-final-recall-notice-to-a-section-of-workforce/article33710324.ece. Accessed On: 27 March 2023.

Thunnissen, M., 2016. Talent management: For what, how and how well? An empirical exploration of talent management in practice. Employee Relations .

Zeller, D., 2020. Global employee relations: Business strategies and objectives. Academia. ed.

You Might Also Like:-

Management Assignment Help

Why is Self Management Important?