Honda Company’s Failed People Management

Creating comfortable and satisfying workplace conditions in which employees will develop loyalty toward a company is always a challenge. However, once the dialogue between managers and employees becomes reciprocal, the issue can be addressed at multiple levels, thus creating favorable conditions for a company’s development.

Unfortunately, in the case of Honda’s people management situation in India, a massive failure was observed due to the unwillingness of the company’s managers to address the grievances of staff members until these complaints had reached the breaking point. By improving the feedback system and enhancing communication channels between Honda and its workers, as well as showing their appreciation and respect for its employees, the company could have improved its performance in the Indian business setting.

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Key Factors Leading to Breakdown in Industrial Relations

The catastrophic situation at Honda in India can be attributed to numerous factors, yet the title of the most disastrous one should be attributed to an inferior HR approach combined with even worse communication within the organization. As the case study indicates, managers at Honda evidently had a flawed system of power status, causing managers to have very little respect for staff members and their needs (Saini, 2006).

The dismissal of an employee for leaving for a bathroom break after he could no longer hold his urge is the most glaring example of the company’s complete disregard for the needs of its employees. Moreover, the described incident indicates that managers at the Indian subdivision of Honda have little to no respect for their employees by putting them in such a humiliating position. The system of beliefs is another constituent of the industrial relationships that have contributed to the downfall of the company in India.

Finally, the misplaced values and attitudes of works within the organization can be blamed for the disastrous situation observed in the Indian setting. Due to the lack of focus on the needs of employees and the disregard of their demand for security and dignity, the organization suffered impressive losses. While the dignity issue is the most glaring and outrageous, the problem with the lack of safety has created much more profound, long-term complications within the context of the Indian corporate setting (Saini, 2006).

By denying staff members the right to participate in a union, Honda has contributed to the drop in safety levels within the organizational environment. The described phenomenon, in turn, has entailed a reduction in the ranks of loyalty toward the firm among staff members. Thus, the industrial relationships have been disrupted beyond repair.

Manager Factors Contributing to Breakdown

When considering the factors that doomed the Indian division of Honda to failure, one should address the tension in relationships between employees and managers. According to the case details, the vice-president of Honda was infamous for his poor temper and propensity toward being very impolite with his staff. As a result, the levels of discontent piqued in the organization shortly after the vice-president started expressing his opinion in a manner that did not meet the standards of organizational relationships (Saini, 2006).

Another factor that has eroded the relationships between Honda and its employees is the problem in communication. While the fact that a vast number of staff members were disgruntled at the state of affairs within the organization was evident from the start, the absence of a clear and effective communication channel that could help Honda’s leaders to see the problem and address it led to the ultimate failure in managing the crisis.

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Cross-Cultural Issues Contributing to Breakdown

The culture clash is another factor that has mainly contributed to the development of the problem. Due to the differences in the cultural backgrounds of managers and employees, the needs of the latter were misunderstood and dismissed by the organization. The described problem does not negate the fact that Honda’s policies toward managing HR issues were quite reasonable and even worth following, such as the focus on the creation of benefits. However, the firm has ignored the culture-specific needs of its Indian employees, following the pattern that it has developed to access its usual markets.

The issue of trade unions is the cultural aspect that Honda should have taken into account when building its HRM strategy. According to Tomozawa, Chen, Furuya, and Nury (2018), the Indian labor economy has been developing an increasingly strong focus on the creation of labor unions as the emblem of employees’ rights and freedoms. Thus, by denying its staff members the result of a labor union, Honda negated their fundamental rights in the context of the Indian culture. The conflict could have been easily avoided by researching the Indian labor market and culture, yet Honda refused to do so, which led to its ultimate failure in the Indian setting.

HR Strategies to Improve Industrial Relations

Although the current situation at the Brazilian subdivision of Honda seems deplorable, it can be mended with several necessary steps taken to meet the needs and requirements of its employees. The improvement of manager-employee relationships by introducing changes to the corporate values and culture is presently the top priority for Honda since it will allow the organization to create a more friendly and welcoming setting (Kumar & Babu, 2015).

Moreover, managers at Honda have to introduce a proper communication channel simultaneously. As the case study shows, the current one is nearly nonexistent, with the plight of staff members being barely heard and their rights and needs being dismissed on a regular basis. For the same reason, changes to the corporate HRM policies and particularly the treatment of its staff will need to be revisited. Rules and standards based on respect for employees’ dignity and rights have to become the platform based on which the HR assets of the organization are managed.

Furthermore, the tenets of the ERG theory or a similar approach toward evaluating the levels of staff’s motivation and addressing their needs should be included in the corporate setting. Managers at Honda will need to focus on the analysis of the needs of staff members by evaluating the cultural differences between the employees and the managers that represent the organization (Asroh & Abdullah, 2017).

For example, the issue of trade unions needs to be discussed in detail with staff members. No matter whether the discussion will result in the firm yielding to the demands of the employees or continuing its corporate policy, it is crucial that a mutual understanding is achieved. In addition, the goal of making the corporate environment more welcoming for staff members can be accomplished by providing the target audience with the opportunity to grow professionally and develop new skills. Training courses that allow acquiring new competencies are to be incorporated into the set of HR approaches used at Honda.


Shaping its HRM approach toward a more people-oriented model and creating a positive setting in which employees’ needs are heard and taken into consideration would have allowed preventing the disaster that occurred at Honda in the Indian market. The case under analysis is a clear example of why the reciprocal dialogue between a company and its employees and the creation of a comfortable workplace setting is paramount for a firm’s success in the designated market. Although Honda has admittedly witnessed quite a defeat in its HRM approach in India, the organization can address the situation by changing its HRM framework toward an ERG-driven approach or the one based on the integration of similar needs analysis.

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Asroh, M. F. M., & Abdullah, C. Z. (2017). Motivational driven and learning culture for organization performance. International Journal of Academic Research in Business and Social Sciences, 7(12), 523-530.

Kumar, K. P., & Babu, S. S. (2015). Social engagement synergy of unionized employees with enterprise objectives: an emerging paradigm in industrial relations. IUP Journal of Management Research, 14(2), 52.

Saini, D. S. (2006). People management fiasco in Honda Motorcycles and Scooters India Ltd. Hong Kong, China: Asia Case Research Centre, University of Hong Kong.

Tomozawa, K., Chen, L., Furuya, T., & Nury, I. (2018). Industrial labor market and workers’ economic life in the national capital region of Delhi: Comparative study on the automobile and light industries. Journal of Urban and Regional Studies on Contemporary India, 5(1), 1-16.

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