Globalization And India – The Challenges Ahead For HR

Published by MBA Skool Team, Published on September 12, 2012

The Developing world is in a period of enormous flux as Globalization completes its work of sectioning-off a chunk of the population-the middle classes- from the bulk of the populace. Having taken advantage of newly created opportunities and having  risen out of the morass of poverty, the middle class now identifies itself with the ruling class above it- the industrialists and the politicians- rather than the one they have just succeeded in leaving behind.

As Arundhati Roy laments, the most dangerous secession of all in India is that of the middle classes into outer space- whether it is Anxiety of Influence or more simply, the snobbery of the parvenu, we have begun to look upon the majority of our countrymen- farmers, industrial workers, wage laborers and other blue-collar workers- as children of a lesser God.

Marxist theory tells us that this is exactly what Big Capitalism wants. It is under these conditions alone that it can push back the gains made by the Labour Movement, for it has always been the middle classes who have traditionally served as a check, intellectually and politically, against the exploitation of the masses. Class traitors-both intellectuals and activists from Marx and Engels to the doyens of the New Left- have always acted as the voice and the organizing force behind labour movements.

In India today, the situation is indeed parlous. The demands of a liberalized, market-oriented economy are taking their toll on more traditional forms of living and working. At the beginning of his second term, Manmohan Singh announced that his goal was to see a great wave of migration from India’s villages to her cities. This ill-conceived outlook is part of the problem. Taking away forest(tribal) land for mining and arable(farmers’) land for SEZs, highways and big dams forces the traditional inhabitants to migrate en-masse to the already teeming cities, exacerbating the dismal living and working conditions there.

This in turn produces a huge pool of desperately poor men and women, which in turn drives down wages and bargaining power for the workers in general. Corporations, like Maruti, take full advantage of this, keeping regular workers’ numbers down and slowly increasing the number of contract workers, who get only a fraction of the wages and benefits of regulars. Unionization, in any case, is limited to only about two percent of India’s workforce but corporations are seeking to slash even this dismally low figure.

What corporations must understand is that, in the long run, Unions are as important to the smooth functioning of a corporation as they are to worker welfare. The reason is that the two are inextricably interlinked- without unionization, management can do what it likes with the workers for a while but they end up pushing them so hard that it is only a matter of time before an explosion.

Unions act as safety valves, denying management certain savings in wage costs and labour flexibility in the short run but ensuring workers a minimum standard of living and, equally important, a sense of empowerment. I believe that it is the lack of fora for expressing their grievances that drives workers to desperation more than anything else. It is this alone which can explain the desperate, utterly pointless acts of violence that workers have indulged in on several occasions in the past few years. These are acts not of rational, calculating beings but those of the most dangerous of people-those with nothing left to lose driven to utter desperation.

The paucity of data means the jury is still out on the Maruti case but both the increasing frequency and brutality of these incidents in India cannot be ignored or dismissed as manifestations of workers’ insatiable greed. Management must introspect and recognize the root of the problem-the attempt to make false economies by focussing on cutting human costs instead of core production costs.

The question of how to tackle this problem now arises. Firstly, it is a mistake to view violent agitations as only a law and order issue- a few troublemakers instigating the rest. Workers are not blind sheep to follow suicidal provocations which lead to them being fired, hunted down ruthlessly by the police and jailed.

The opposite view is that the Manesar incident was part of a giant conspiracy, involving (as a top home ministry official has hilariously suggested) the Maoists!

Both these rationalizations tend to obfuscate the fact that the malaise of worker unrest is systemic, not incidental. No agent provocateurs, no grand conspiracies, but rather the boiling over of a pot with no other means of release.

The chairman of Maruti, RC Bhargava, has described the violence as a “class attack.” This is closer to the truth but not in the way he means it. True, the workers seem to have targeted the managers merely because they were managers- representatives of the class that they feel is exploiting them. What is lacking in the workers, however, is a sense of class unity in pursuit of a larger purpose. Workers in India are still extremely fragmented and hopelessly unorganized. Agitations are local and issue based; rarely ever have workers come together to protest against the system or the ‘ruling classes’.

The great English historian EP Thomson tells us in his magnum opus The Making of the English Working Class about how it was unceasing exploitation by industrialists in the early part of the nineteenth century that was responsible for the formation of class consciousness in Britain.

The single biggest mistake Indian industry can make is to follow this example. In the past, the only cement that could bind India together was opposition to foreign rule. Today, the only glue that can bind the millions of disconnected workers in India is a consciousness that there is no recourse from exploitation but in unity. It would be suicidal for corporate India to permit this.

No lessons have been learned even after the Manesar tragedy- SY Siddiqui, the COO, is now talking of using the incident to “increase labour market flexibility” and usher in “labour reforms”. Euphemisms for hire-and-fire rights, these demands, if fulfilled, will further exacerbate the already tense situation. In return, Mr Siddiqui promises to phase out contract labour, but he neglects to mention that this will only really happen when hiring contract workers ceases to be beneficial- ie when the rights of permanent workers are abridged to the extent that no difference remains between them and contract workers.

This ‘take all you can; give nothing back’ mentality with regard to the workers must be overcome. The bedrock of industrial growth is stability, which is impossible if the tension between management and labour is ratcheted up any further. Similarly, workers must be made to realize that violence will get them absolutely nowhere, and that murder cannot be condoned or justified, whatever the provocation.

So HR must perform a balancing act at the strategic, not at the plant level. HR must influence top management to look at the situation from a long-term perspective and resist the temptation to burnish the books only for the next few quarters by cutting labour costs. The interests of labour and industry must run parallel and this can only happen when both sides realize that the progress of each is to the good of the other as well.

This article has been authored by Pragya Sarathi and Pranav Primlani from XLRI.


Views expressed in the article are personal. The articles are for educational & academic purpose only, and have been uploaded by the MBA Skool Team.

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