Bata

Bata IR Problems
Company Profile
 Bata Limited is a multinational footwear and fashion
accessory manufacturer and retailer based in Ontario, Canada.
 The Company was originally incorporated as Bata Shoe Company Limited
on December 23, 1931 under Indian Companies Act, 1913 for the purpose
of manufacturing and marketing of all types of footwear, footwear
components, leather and products allied to the footwear trade.
 Subsequently, the Company changed its name to Bata Shoe Company
Private Limited on April 6, 1956 upon conversion into private company.
 The name was once again changed to the current name, i.e. Bata India
Limited, on April 23, 1973.
 The Company was promoted by Leader A.G., St.Moritz, Switzerland, a
member of the multinational Bata Shoe Organization (BSO) with a 100%
Equity Shareholding, and consequently, the Company too is a member of
the BSO.
 The BSO consists of independently run companies operating
in several countries across the world. Bata Limited, Toronto,
Canada acts as the headquarters of BSO
 A family-owned business, the company is organized into three
business units: Bata, Bata Industrials and AW Lab.
 The company has a retail presence of over 5,300 shops.
 The company operates in more than 70 countries.
 It has its production facilities in 18 countries.
Introduction
 Throughout its inception Bata had shown growth in profits, with the only
loss shown in 1995, but in2000 Bata again began its downward phase
which was mainly due to labour problems.
 Although Bata had plants in Faridabad, Bangalore, Patna, Hosur but most
of the output came from batanagar factory in west Bengal which was
plagued by influences of political parties which made negotiation with
trade union very difficult
 At the centre of all labour problems was the BMU or Bata Mazdoor union
in West Bengal. Bata has always faced labour problems in its major
factories in West Bengal and Bangalore. The company after making a huge
loss in 1995wanted to save itself by bringing in W.K Weston who was an
expert in turning around performance.
 Meetings between the management and union failed which led the factory
to be shut down for several months.
 A lockout also took place in Bangalore peenya factory in 2000 due to
disputes regarding expiry of wage agreement.
 Lifting of the lockout also did not solve any problems as employees
demanded that suspended colleagues be called back.
 In 2004 Bata began a huge downsizing activity in west Bengal which it
justified by stating that it was outsourcing its finished products from china.
Problem Statement
 Lack of communication: The Company was having 15,000 employees.
The management failed to make any meaningful communication with the
workers before making any decisions.
 Change in management: In 1995 BSO restructured the entire board and
sent in a team headed by Weston. Soon after he stepped in several changes
were made in the management. Indians, who held key positions in top
management, were replaced with expatriate Weston taking over as
managing director.
 Resistance from labour unions: Bata decided to sell its headquarter
building in Calcutta for Rs 195 million, in a bid to stem losses. Robin
Majumdar, president, co-ordination committee, Bata Trade Union,
criticized the move, saying: "Profits may return, but honor is difficult to
regain."
 Downsizing: The management team implemented a massive revamping
exercise in which more than 250 managers and their juniors were asked to
quit.
 Assault on Weston: In 1998, Weston was severely assaulted by four
workers at the company's factory at Batanagar, while he was attending a
business meet. The incident occurred after a member of BMU, Arup Dutta,
met Weston to discuss the issue of the suspended employees.
 Emergence of strikes: The employees involved in assaulting employees
accepted their dismissal letters but subsequently provoked other workers to
go in for a strike to protest the management's move.
 Employee’s demands: The employees demanded revocation of
suspension against 20 of their fellow employees
 Poor IR relations: The top management only shows the benefits of the
company and not the problems of workers
 Cultural issues: Expatriates do not know about Indian culture and
sensibilities of the Indian workers and hence the decision was not very
beneficial. Change in higher management authorities gave rise to cultural
issues.
 Lockout: In 2000 a lockout was declared at Bata's Peenya factory in
Bangalore, following a strike by its employee union.
Suggestions
 Proper communication: The Management failed to make any meaningful

communication with the workers before making any decisions. As it was
mentioned in the case that management changed different policies and
done many lockouts without even communicating and taking the advice
from the employees
 Indian management: as earlier the management was headed by Indian
and they knew well about the culture and sensibilities of the Indian
worker.
 Issue in retirement and downsizing policies: Revamping and downsizing
could have planned in a better way with a proper agenda so that it could
not have affected companies stake. Retirements should have been done
with proper planning.
 Resolving cultural issues: As it’s mentioned in the problems that
expatriates do not know about Indian culture and sensibilities of the Indian
workers.
 Lockouts: As the company decided to do cost cut by applying lockouts
but the employees felt dissatisfied by having this move. Company must
have avoided these lockouts and instead of outsourcing 23 million pairs
from other industries they might have manufactured it India that would
have lower down import cost and employees would not have felt
dissatisfied.
Case Application
 Strikes: Strike is a pivotal weapon used by trade unions and other labor
associations to get their demands accepted. In addition to this, after the
acceptance of dismissal letter employees are forcing other workers to go
on strikes which generally involves quitting of work by a group of workers
for the purpose of bringing the pressure on their employer so that their
demands get accepted.
 Dismissal: In this case, defenestration leads the company to the woes.
Dismissal is the act of removing or terminating the employment of an
employee which company did to there 3 workers.
 Lockout: According to the case, in February 1999, a lockout was declared
in Bata’s Faridabad unit. Mike Middleton Managing Director said that
closure of the unit would not affect company’s revenue as it was catering
to lower-end products.
 Downsizing: Downsizing is the permanent reduction of a company’s labor
force through the elimination of unproductive workers or divisions. In this
case, the management team implemented a massive refurbishing exercise
in which more than 250 managers and their juniors were asked to quit
because the Bata usually associated with economic downturns and failing
business.
Conclusion
In this case, management was trying to dominate their employees by imposing
their divergent policies but the worker uses the plethora of hindrance to create
in proper execution of work. Moving towards, the Bata took stringent action at
the drop of hat like Bipartite agreement to resolve labor concerns to
include 10% of 400 contract labors. Lastly, management requires to take care
of their employees but also employees acknowledge their employer and talk to
them at the time of urgency while going for strikes etc.

Bata

Uploaded by

Copyright:

Available Formats

Bata

Uploaded by

Document Information

Original Description:

Original Title

Copyright

Available Formats

Share this document

Share or Embed Document

Sharing Options

Did you find this document useful?

Is this content inappropriate?

Copyright:

Available Formats

Bata

Uploaded by

Copyright:

Available Formats

Bata IR Problems

 Proper communication: The Management failed to make any meaningful

You might also like

Pfad - The Proxy pFad of © 2024 Garber Painting. All rights reserved.