Two Decades of Industrial Disputation at an Indian Auto Plant: Lean Production versus Local Cultural Values

Abstract

This case study finds that disrespect by international expatriate managers towards local employees triggered long-term industrial unrest in the Indian subsidiary of the global car maker Toyota. Whilst innovative production models and their tools provide economic advantage to the company, the interaction of the application of the lean production model within the context of host country institutions often creates workplace disputation and unrest due to unilateralism and managerial hegemonies that overrides local customs and norms. The power of multinational enterprises to override or ignore institutional resistance and to inflict disrespect towards the local workforce can result in worker resistance, a lack of trust, and ongoing industrial unrest. This case study demonstrates how a lack of respect of local customs and workers grievances had long-lasting consequences in terms of the subsequent conflict and a poor industrial relations climate at the production plant in India.

Introduction

Cultural differences across employees and between company subsidiaries involving misunderstanding, misrepresentation, and communications breakdown are an acknowledged source of business disruption and failure, especially in an international context (Association of Psychological Science 2014). In this paper, cultural differences were manifested through employee perceptions of disrespect by company managers resulting in two decades of ongoing industrial action at one auto plant in India. This paper demonstrates the importance of disrespect as an impediment in the transplantation of lean production using a case study of a Toyota plant in Bengaluru (Bangalore), India. Honneth’s (1992) sociological theory of disrespect is used to develop the contribution of institutional theory towards understanding ongoing industrial conflict within a multinational enterprise (MNE) subsidiary (DiMaggio and Powell 1983; Kostova and Roth 2002; Rowley et al 2016). We demonstrate how institutional disrespect was embodied in the transplanting of the lean production system ignoring the cultural context in which the model was applied. We identify and analyse the subsequent industrial disputation and discuss the challenges the company faced in implementing a lean production system at the subsidiary. Jürgens and Krzywdzinski (2016) note that the employment standards implemented by Toyota were based on the overall productive model exported by the company and not influenced by the national (host country) employment standards and cultural systems.

The lean production model received widespread support and was propagated as the ‘machine that changed the world’ (Womack et al 1990). Lean production is grounded on the premises of ‘waste elimination’, as it believes ‘anything that does not add value is a waste’. A combination of innovative lean tools such as Muda, Kanban, Quality Circle (QC), Total Quality Management (TQM), and Jumbiki not only mesmerised many academics and practitioners alike, but it also made earlier production models such as Fordism and the Volvo-way obsolete. These accolades emboldened the company and its managers to conveniently ignore and override institutional resistances from host countries, inflicting disrespect through its dealing of host country political, social, and cultural institutions, as many of these institutional practices were interpreted as ‘waste’ by lean advocates within the company (Mathew 2020; Mathew and Burgess 2018; Mathew and Jones 2012, 2013).

The unrest at Toyota India erupted during its establishment years (1990s) and has continued intermittently until 2020–2021. We identify disrespect as a key factor that was registered deep in the workers’ psyche. We argue the importance and understanding of host country institutional factors in line with the studies conducted by Uysal (2009) and Brewster et al. (2008) on human resource management (HRM) and host country industrial relations, as key to the effective transplantation of production models from headquarters to foreign subsidiaries.

This paper proceeds from earlier studies about the industrial unrest at the case subsidiary (Mathew and Jones 2012, 2013) – from the first data collection period (2008–2012). The latest primary data collection (2015–2019) was prompted by media reports concerning ongoing industrial disruption at the plant through to 2021. Early research highlighted the ongoing conflict around the lean production system, which spread to community protest, and resulted in Toyota making concessions to the workforce to settle the dispute (Mathew and Jones 2012, 2013). However, despite an apparent cessation of industrial disputation, this was short lived, and once again the plant was embroiled in strikes and lockouts in 2021. Our findings suggest a systemic problem of disrespect which continues unabated at Toyota Kirloskar Motor (TKM), and in which disrespect is central to two decades of ongoing industrial unrest.

This paper highlights the importance of institutional theory in framing the challenges in the transplant of lean production practices to foreign subsidiaries and then follows a discussion of disrespect and why it is central to explaining an ongoing industrial dispute at a subsidiary plant of a multinational automaker. The context and methods of the research are set out followed by a discussion of the findings. The findings identify the significance of disrespect as a barrier to the international transfer of production systems across subsidiaries. The discussion highlights the case for disrespect as a key concept in institutional theory. This then is followed by our conclusion to the research and a discussion of the research limitations and potential future research.

Institutional theory and the transfer of production systems within MNEs

Jackson et al. (2014) identified internal and external (institutional) contexts as decisive factors in determining the effectiveness of HRM practices. The institutional factors such as political, social, and cultural conditions are viewed in terms of how these are respected or disrupted by the actors (Lewis et al 2019). Researchers have identified the conflict between organisational capabilities and local institutions in MNE operations, especially in terms of establishing global production, HRM, and global supply chains (Ghoshal and Bartlett 1988). Though institutional theory has been identified as key to HRM research (Arthur et al 2017), the focus was towards exploring the ways and means to break the ‘iron cage of institutional norms and collective beliefs’ and override them with professional legitimacy judgements (Bitektine and Haack 2015, 4), thereby avoiding and downgrading, and ultimately disrespecting local institutions. Moreover, the focus on a profit-oriented organisational legitimacy discourse using strategically crafted tools conveniently sidelined the human side of isomorphism (Thornton et al 2012). Thornton et al.’s (2012) human behaviour model embeds the ‘human side’ in the social, cultural, and political structure of the context within which individuals are domiciled. The human side of isomorphism could be viewed as engagement with the cognitive institutional factors (such as (culture) to derive positive understanding of social existence of individuals within a group (Scott 1995). Hence, we argue for theorising the concept of ‘institutional disrespect’ as an impediment to the smooth transfer of production systems and practices to host countries.

The sidelining of the human side of isomorphism is guided by the argument that people can be (re)moulded (away from their culture) to align with common (organisational) aspirations (Swidler 1986). In a similar vein, DiMaggio (1997) identifies culture as ‘cognitive’ as they are just stored without verifying the truth – hence open to amendments and mouldings. These arguments cross with the human side of institutional logics which argues that socio-cultural values cannot be traded with the material side which insists on markets and competitions (Friedland and Alford 1991). The institutional logic perspective was defined by Friedland and Alford (1991) as the central to individual and group motivation, in an organisational context.

Whilst the human side of institutional logics is derived from the recognition of individual and group values, the concept of isomorphism entails homogenisation (DiMaggio and Powell 1983) in response to market demands, and MNEs exerting pressure on convergence to ‘superior’ organisational discourse (Pudelko and Harzing 2007), coercively overriding the former, leading to disrespect. However, there is insufficient attempt to explore the sociological concept of disrespect as a human factor in analysing institutional theories.

Scott (2013) claims that the three key elements of social structure, regulative, normative, and cultural-cognitive, provide foundational stability and meaning to social behaviour. However, there is a variation in terms of the effectiveness of each of these elements (Braga et al 2019). For example, the power of the regulatory institutional pressures on MNEs, defined as coercive isomorphism (Bjorkman et al 2007; DiMaggio and Powell 1983), is found to be overridden by the bargaining power of corporations (Brewster et al 2008). As Braga et al. (2019) indicate, MNEs often misuse the weak regulatory mechanisms of host countries. In such situations, unilateral process control mechanisms (Brenner and Ambos 2013) could dictate employee behaviour and production processes, inflicting disrespect to the host country workforce.

Whilst the cultural-cognitive element is mimetic in nature and works upon shared values and beliefs, with benefits of inter-firm and intra-firm learning (Martinez-Jurado and Moyano-Fuentes 2014) as culturally supported and recognisable (Braga et al 2019), institutional dissimilarities (between the home country and the host country) could be myopic, resulting in one-way mimicking, from headquarters to subsidiaries. This again results in disrespect of the host institutions.

Disruptions in the transfer of MNE practices due to socio-cultural conflicts, as evident from the challenges in lean transplantation to China (Hofer et al 2011) and India (Mathew and Taylor 2018), point to the need for the expansion of institutional theory incorporating the concepts of respect and disrespect. Barnes (2018) points out that the Indian auto industry appears to have embraced a ‘low road’ approach to industrial relations with reduced job security, protection from arbitrary dismissal, regular hours, social security, protection from collective bargaining rights, and freedom of association. Institutional theory helps to understand the interactions among the stakeholders (DiMaggio and Powell 1983). This in turn applies to the headquarter–subsidiary relationship and points to the demands of host country responsiveness (Scott 1995). Since Honneth’s theory identifies disrespect in individual and social interactions, with external factors that denigrates individual and social identity, we believe that institutional factors, especially socio-cultural, are fundamental to the respect of both individuals and their society. Therefore, we attempt to add a new dimension to institutional theory by arguing that disrespect of host country institutions would slow down or even terminate integration of home country and host country dynamics as evident from this case study.

There is an emerging body of research focusing on micro-institutional factors to bring forth the power of organisation-specific innovative systems and processes to fight local institutional resistance to changes (Schilke 2018). MNEs often have the power to override institutional resistance, especially in transplanting innovative production models and processes (Smith and Meiksins 1995). The power of institutional factors could be visible in the degree of restraint they exercise against MNE standardisation attempts (Festing et al 2007). In the case of India, whilst there exists considerable influence of social and cultural institutions on HRM practices (Braga et al 2019; Sinha 2014), there is insufficient literature addressing the impact of disrespect on these institutions. Socio-cultural institutions are a source of potential resistance to MNE standardisation attempts (James and Jones 2014; Sinha 2014). In such situations, assuming homogenous institutional conditions that mimic those of the MNE home country can work as a liability for MNEs.

In this study, we argue that the transplant of lean production ignoring local institutional conditions would lead to clash between the home and host country institutional factors, especially culture. Mathew (2020) identified a range of cultural factors such as power distance, paternalism, religion, and caste as dominant factors posing challenges to lean production transplantation into the Indian context. Abrahamsson and Isaksson’s (2012) research on the cultural challenges in implementing lean in a Nordic context suggests that individual country institutions pose a challenge to the implementation of lean in its absolute form. Brewster et al. (2008) highlight the underpinning of culture in individual interactions and hence key to effective transfer of MNE HRM practices into subsidiaries. In Scott’s (2013, 46) words, ‘the meanings embedded in systems are emotional as well as substantive’, and organisations are constructed based on rationalised cultural rules. There are cases where MNEs take longer to realise the power and influence of local institutions before switching to an adaptive mode. For instance, Mathew and Jones (2013) identify how prolonged industrial relations conflicts forced MNEs to switch to HRM readjustments to accommodate the local institutional demands.

Disrespect and its role in the workplace

Honneth (1992, 188) defined disrespect as the ‘totality of experiences of recognition on which a person depends for the safeguarding of his integrity’. He further emphasises the definition of disrespect as the ‘invulnerability and integrity of human beings to depend on approval being forthcoming from others’ (1992, 189). Rawls (1971) claimed that every individual has a right to be treated with respect as a means of fostering self-regard. Greenberg (1994, 289) highlighted ‘interpersonal sensitivity’ and ‘social sensitivity’ as key factors in the perception of respect. Honneth (1992) proceeds to identify three forms of disrespect, individual, social, and denigration of certain forms of living and explains that disrespect operates at an individual level as physical violations that destroys the positive understanding of the self, restricting positive contributions to organisational processes such as teamwork and knowledge sharing.

The social form of disrespect in Honneth’s (1992) view eventuates from the exclusion of individuals from participation in a social process and deprives them of expecting fair treatment. From an HRM perspective, this entails unilateral enforcement of a standardised system or process ignoring the socio-cultural institutions of the host workforce (Leeuwen 2008). The third form is the denial of the culture of a group (Honneth 1992), such as their belief system, societal values, and cultural norms. In line with the social identity theory which defines people’s self-perception based on their societal status, a breach of an individual’s self-esteem, linked to his/her social group, results in uncertainty to the acquired values, attitudes, and behaviours (Porck et al 2019).

According to Honneth (1992, 190), disrespect affects individual dignity and self-confidence and inflicts ‘psychological injury’. Siegel (1999) terms this as a mental dysfunction, resulting in negative emotional responses and leading to psychological withdrawal and disengagement. Moreover, this may also force the affected to resort to various physical, cognitive, and emotional defence mechanisms (Kahn 1990). Reproducing the ideas of disrespect, we incorporate individual and social disrespect into our argument for an expanded study of institutional theory, from a socio-cultural perspective. In doing so, we highlight disrespect as a thematic concern in the study of institutional theory and its application to understanding workplace conflicts. Specifically, where there is cultural distance between MNEs and their subsidiaries, the potential for misunderstanding, insensitivity, and indifference to cultural norms becomes a source of resentment and eventual industrial conflict when MNEs attempt to impose production and workforce management systems on the subsidiary workforce. For Honneth, distorted and absent recognition is a barrier to overcome. The distortions in identity are the trigger for conflict and struggle. The struggle for recognition is based on the need for self-esteem and experiences of disrespect. In this context, disrespect is about identity and recognition of identity through action and experience. Over the duration of the industrial conflict at the plant, workers were seeking to retain their identity and to have this identity recognised and respected. The failure to receive this recognition resulted in resistance and acts of disobedience towards the imposed lean production system at the plant. It is by the way of the morally motivated struggles of social groups – their collective attempt to establish institutionally and culturally, expanded forms of recognition – that the normatively directional change of societies proceeds (Honneth 1995).

The context: TKM

TKM was established in the latter half of 1990s as a joint venture operation of Toyota Motor Corporation (TMC) with the Kirloskar group of companies, in Bangalore, capital of the southern State, Karnataka. The location advantages for the State of Karnataka included its reputation for fewer trade unions that were moderate and supported industrial harmony (Ramaswamy 1988), which TMC should have found as favourable, as they always pursued a philosophy of unitarist culture.

Though the first product Toyota Qualis (a utility van) was an instant hit, the local media criticised it as a disrespect to the Indian customers as it was a model phased out elsewhere in other developing countries. When the subsidiary was established, there were complaints about favouritism as the workers from Maharashtra (home State of Kirloskars) were favoured in employment which fostered local resentment against the plant, as the latter had historical animosity with the former. This issue remained active within the plant and affected the solidarity of the workers, for which the management was blamed for using it as an instrument to divide the workers (Mathew and Burgess 2018).

The Kirloskar group was selectively chosen by the MNE for its political connections and influence in the local industry. Within the first few months of production itself, industrial unrest against lean practices started emerging. A 3-day strike ensued the sacking of two workers after a wage dispute where the management ignored the union in the negotiations. Within 6 months, by early 2002, another strike was declared by the union against the management’s action of terminating workers who refused compulsory overtime work. This strike continued for 52 days until the Government intervened and banned the strike. Suspensions and disciplinary actions continued in the following years and by 2005 it reached a tipping point when workers voted for another strike demanding settlement of wage disputes and reinstalment of suspended workers. Again, a strike was declared in 2006, and the management locked the workers out of the premises. The strike spread to local communities supporting the workers at protest marches in Bangalore. The workers felt a high sense of job insecurity as they were hired under the guise of trainee associates for a period of 3 years. Toyota had a policy of not recognising external trade unions to represent its workers, even though India has a long history of trade union representation in the workplace. The company instead followed a policy of only recognising an enterprise level union with members nominated by the management.

Recruitment of workers as trainees, apprentices, and casual workers for an extended period continues to be a burning issue in the automobile industry in India, particularly with foreign subsidiaries. For instance, referring to the infamous Maruti-Suzuki conflict (India’s largest automobile company), it was reported that 75% of the workforce were contract labourers, trainees, or apprentices (Centre Europe – Tiers Monde (CETIM) 2013). Likewise, there was unrest related to the treatment of trainees, apprentices, and casual workers reported from Renault-Nissan India (www.economictimes.com 2014) and Volkswagen India (Jürgens and Krzywdzinski 2016).

The issue of disrespect re-emerged after the 2006 strike, with complaints about managers disrespecting workers, their values, and culture. As many of the lean practices conflicted with local tradition and culture, workers felt agitated being either criticised or forced to abandon them (Mathew and Jones 2012). The management-initiated enterprise level union, the ‘Team Member Association’ (TMA) was restricted to issues of worker’s health and safety, uniforms and workwear, canteen issues, and communication between managers and workers. The key functions such as collective bargaining and negotiations were not included in the role of TMA. Ever since, the industrial unrest at the subsidiary has proceeded unabated, often leading to months of lockout, with issues thought to have been resolved a decade ago re-emerging and continuing into 2021. The pace, rigidity, discipline, and intensity of the workflow prompted the workers to adopt a hostile attitude towards lean production systems which was propagated as the reason for rigidity and intensity. In pursuit of professional affiliation (subsidiary and headquarters), the expatriate and local managers ignored or sidelined institutional factors, from the establishment of the plant. Moreover, there was huge pressure to capture the market from another Japanese automaker, Maruti-Suzuki, which dominated the Indian auto industry. The first unrest in the plant was a result of rigid working conditions, strict lean-based discipline, and hostility towards Indian institutions such as political, social, and cultural. The ensuing course of this unrest was never resolved except for some aesthetic adjustments. Our longitudinal research delves into the fundamentals of the frequently erupting unrest and brings forth the struggles of the local institutions against lean production practices.

Methodology

This study follows a case study approach as qualitative methodology enables a better sense of the data to understand the dynamics of human interaction (Miles and Huberman 1994). Weick (2007) argues that qualitative research helps in theory building by way of providing in-depth descriptions of real phenomena. Qualitative research is claimed suitable to ‘opening the black box of organisational processes, the how, who and why of individual and collective organised action as it unfolds over time in context’ (Doz 2011, 583).

Bjorkman et al. (2007) point to the greater scope of institutional theory in terms of understanding a range of international HRM issues. This justifies the attempt to understand the influence of the sociological theory of disrespect by Honneth to explain the ongoing industrial action. Cheng’s (2007) argument that qualitative data are essential to uncover the inherent cultural nuances at play, especially when the study is within a regional context. Doz (2011) also suggests that qualitative research helps exercise intellectual curiosity to discover the importance and connection of a particular theoretical perspective to a phenomenon. As evident from our data collection process, this curiosity prompted us to interview the participants more than once. The emergence of themes from our research thus establishes a key link between the theory of disrespect and institutional theory.

The key incidents that drove this research were the persistent industrial unrest at TKM. A case study approach helps to understand the ‘context and dynamic interactions’ (Marshall and Rossman 2016, 19). As the workplace unrest is linked to individual and social interactions in this case, we subscribe to Silverman’s (2000, 8) view that qualitative research enjoys ‘a preference for naturally occurring data, through observations and open interviews’.

Data collection comprised of onsite interviews with employees and managers complemented by offsite interviews with union officials and journalists. The interviews were supported by documentary information, especially media reports covering the industrial dispute. The multiple informants and the use of documentary information provided depth to the information gathered. The research process has been ongoing reflecting the sporadic and unexpected industrial action, whether it be strikes, protests, or lockouts. The data reported here were collected in two stages. The first phase was 2008–2012, and the second was a follow-up from 2015 to 2020. Rather than a single event at a single point in time, the research represents a longitudinal overview of an ongoing and evolving process of disputation and resolution.

A total of 35 interviews were conducted during the first major part of the data collection between 2008 and 2012 in India. The data collection was extended through several field trips to India, covering other stakeholders to understand the reason behind the ongoing unrest that extended beyond the plant and into the community. The samples represent a cross section of stakeholders consisting of a senior executive, middle and senior managers, shop floor workers, journalists, internal and external trade union officials, as well as former employees. The interviews, lasted between 30 and 120 min, were open ended, were focussed on the disputes, their cases, resolution, and ongoing industrial issues at the plant, and were recorded and transcribed.

The secondary data collected from online resources using search words such as industrial unrest and TKM helped to create a running history of the plant and the industrial unrest as well as to validate the previously emerged themes, based on which we went for further data collection. As Rheinhardt et al. (2018, 527) claim, the role of others in the research process helps to collect more data received from their ‘critical inputs….and interpretative credibility’.

The second half of the data was collected between the years 2015 and 2019, during the visits to Bengaluru (Bangalore). Interviews were undertaken in the years 2015, 2017 and again in 2019, in December and January. These interviews were conducted outside the plant to ensure confidentiality and avoid intimidation of respondents. Six shop floor workers were interviewed twice, and two external union officials were interviewed once during the two trips undertaken. A total of 14 interviews were conducted. These interviews took place in informal settings and were not tape recorded as the interviewees agreed to participate only if the interviews were not recorded. However, notes were taken during the discussions and were analysed on the same day of the interviews. The field notes from the observations, from the first phase of data collection, were also analysed with primary and secondary data, which helped in the triangular validation of conceptual ordering and themes (James and Jones 2014).

The second set of secondary data collection was triggered by media reports of yet another industrial conflict at the plant, again leading to lockout. Accordingly, newspaper reports were followed on a near daily basis which then prompted the second set of primary data collection. We discovered that the industrial unrest at the subsidiary had become chronic as there was major unrest at the plant with long-term lockdowns which were continuing at the beginning of 2021. In this study, over 50 local media references to the disputes at the plant were sourced to inform the analysis.

The findings here involve interpretation of the multiple data sources through time, with a focus on the importance and dimensions of disrespect towards sustaining the industrial disputation.

Findings

Industrial unrest 2008–2012

Research conducted in the first stage (2008–2012) pointed to cross-cultural misunderstandings between the Japanese managers and Indian workers as the primary reason for the industrial unrest (Mathew and Jones 2012, 2013). In response, the company decided to replace Japanese managers with Indian managers and developed socially responsible community initiatives by supporting education and welfare activities. An institute was opened to train youth in the lean production system. As a goodwill gesture, the external national union, which was never accepted by the company, decided to withdraw their demand to be recognised. In return, all employees were allowed to work with the enterprise level union.

There was some degree of relaxation in the rigid controls operating at the plant, including incorporating the demands of the workers to discontinue compulsory overtime and relaxed ‘takt time’ (the time required to complete the production of a car). The workers were permitted to play carroms during their breaks, a time that earlier was insisted by management to be used for QC meetings. They were also allowed to hang the pictures of their gods on the shop floor and allowed to pray on the shop floor, both activities were previously prohibited. The union officials were allocated meeting rooms and allowed to freely move around within the plant.

As a result of these changes, workers felt less oppressed by the management and believed that the company was addressing their grievances. However, the industrial unrest again resurfaced with the repetition of the same degree of hostility between management and workers, eventually leading to another lockout in 2014 as the workers intensified their agitation.

Further interviews uncovered incidents which suggested that the soft approach to the lean production system and employees was discontinued and that the Indian managers, who replaced the Japanese managers, were seen to be systematically re-implementing the regimental style of the lean production system. The enterprise union submitted a charter of demand to management, which could be broadly categorised into three: (1) wage revision; (2) better working condition; and (3) better welfare facilities. The claim for wage increase was eventually lowered by more than 50% and was brought down to INR 4000 per month (USD 65). The starting pay for an employee was INR 16,000 per month which was equivalent to USD 265 approximately. The wage negotiation initially resulted in the company offering an increase of INR 3050 (USD 50) per month, but the union rejected the offer. The unions justified their position by demanding that the company offers the same wage increase that it implemented in the previous financial year. However, the company rejected the claim. The union submitted a notice for a token strike, a month before the unilateral lockout announced by management. The lockout, as the union claims, was unannounced and came as a shock for the employees.

The findings from earlier data confirm that the company often resorted to unannounced lockouts with workers not being allowed to enter inside the gates of the plant. The workers resorted to Satyagraha, the Indian style of protest (Mathew and Jones 2012), in a makeshift tent outside the plant. The company was alleged by the union to be using strike breakers and the local police to end the strike.

The company once again branded the union activists and supporters as perpetrating violence and unrest within the plant and alleged that these employees were a safety concern to the plant, and a risk to managers and the contract workers. Only contract workers who were employed as substitutes to the striking employees were allowed to enter the plant. The workers felt disrespected at the way they were treated: Whilst many of the key demands were unmet, the workers were forced to return to work at the insistence of the government which mediated the industrial unrest. Citing the increasing role of State intervention (between 1990s and 2000s) to settle industrial disputes, Shyam-Sundar (2004) suggests that employers impose calculated work stoppages to coerce an outcome from their employees that precipitates state intervention and a favourable settlement on behalf of employers. This accords with Barnes’ (2018) suggestion that class conflict in India is tied to its institutional environment where companies employ the tactic of lockouts (as evident in the case of TKM) to avoid collective bargaining with unions. In the case of TKM, the company was emboldened and justified in its actions by the support that it received from the government.

Evidence from 2018 to 2020

The findings from the data collected between 2015 and 2021 found that disrespect was endemic in employee relations at TKM. The latest data collected from secondary sources suggest an unending saga of industrial unrest with incidents of disrespect and labour unrest frequenting in a cause-consequence cycle of strikes and lockouts. The retaliation tactics continued as employees were suspended every time they dissented. The cultural misunderstandings earlier reported (Mathew and Jones 2012, 2013) continued as evident from the latest secondary data.

The employees’ union complained that harassment at the workplace was continuing, this time in the pretext of responding to the COVID 19 pandemic. The State’s opposition leader alleged that many companies were using the shield of new labour laws passed during the COVID-19 crisis, to increase work hours (www.TheIndianExpress.com 2021). The latest industrial unrest at the plant which began on 10 November 2020 was over the company order reducing the takt time together with the suspension of a union member (TheIndianExpress.com 2021). A union official highlighted the increase in workload pressure on employees further demoralising the workers as the takt time was reduced from 3 min to 2.5 min. As the strike continued, 66 workers were suspended for various reasons which the union claimed were illegal and based on flimsy grounds (www.livemint.com 2021).

The employees further expressed their concern at the company’s disrespect of labour law which requires an official warning be issued before suspending any employees (www.arabnews.com 2021). The www.TimesNowNew (2020) reported that over 3,500 workers continued the strike over the alleged workplace harassment by the company. The Economic Times (2020) quoted the State Labour Minister as saying: ‘If the government allows the strike to continue, it will create an impression in the minds of investors that Karnataka is not a safe State for their investments’. It was further reported that the State government was pro-investors in all ways and was against labour unrest and grievances (The Economic Times 2020).

Discussion

This study contributes to the understanding of institutional theory from a sociological perspective. Honneth’s (1992) theory of ‘disrespect’ was applied to illuminate our findings which identifies individual, group, and social disrespects in the interaction between the MNE and host country institutions. We categorise disrespect into corporate and functional level and arrange the three forms of disrespect (Honneth 1992) under these to contribute further to the development of institutional theory. The key arguments developed are as follows:

1. 1. Disrespect affects individuals, groups, and societies.

2. 2. Disrespect is a key theme in the study of institutional theory.

3. 3. Disrespect perpetuates worker unrest affecting industrial harmony.

4. 4. Successful global production systems are not transferrable to all subsidiaries unless local institutions are considered and respected.

Critical literature on lean production condemns it as ‘inhuman’ (Stewart et al 2006); ‘mean’ and ‘management by stress’ (Parker and Slaughter 1994); ‘dehumanising and exploitative’, and ‘ignoring dignity of workers’ (Babson 1995; Parker and Slaughter 1994; Stewart et al 2006). Mathew and Jones (2012) list ethnographic research on lean pointing to the realities for workers within lean environments across major automobile manufacturers. Analysis of lean practices encompasses that a worker has to discard their old ‘baggage’ and get proselytised to lean philosophy and dedicated to diligently meet the demands of the lean system (Mathew and Jones 2013). This then entails renouncing the culture, social beliefs, and other institutional factors embedded in the psyche of the host country workforce. Moreover, forceful conversions from a rooted value system to a new system (lean philosophy in this case) lead to the subjects feeling disrespected.

The initial enthusiasm of the workers was based on getting the opportunity to work in a world class system and a Japanese company. However, when the core tools of lean production such as kaizen, just-in-time, standardised work, and 5s (sort, straighten, shine, standardise, and sustain, and muda) were strictly implemented combined with accelerated takt time, workers started feeling the pace and rigidity of work unbearable (Mathew and Jones 2012). The then Deputy Managing Director of the company was quoted as saying that productivity had to improve, we want to do more work in lesser time (Murali 2000). The inexperienced workforce struggled physically and mentally with keeping pace with the lean production system. The pace, discipline, and intensity within the lean production system were unfamiliar to the Indian institutional context. The workers were traditionally accustomed to voluntarily committing to a long stretch of work hours, but the idea of being pinned to a single task without relief and more importantly disconnected from everything else including social interactions while working was an unaccustomed event in the Indian workplace context. The imposed work practices resulted in workers being disconnected and alienated at work from their local institutional context as the demands of lean imposed a strict demarcation between work, family, social, cultural, and religious beliefs.

The lean production system was perceived as a closed community of practice which did not allow external independent trade unions, whereas India has a long history of external trade union involvement in the workplace. Nowak (2019) argues that the non-recognition of independent trade unions, especially by Japanese companies, has become a source of conflict in India, but this again is a tactical move by the companies to suppress or deviate the attention of unions from issues inside the plant, such as the shop floor. In a similar vein, Duvisac (2019) points out the lack of protection in the Indian industrial relations framework for freedom of association citing examples from MNE auto subsidiaries harassing, dismissing, and undertaking other punitive measures to suppress the voice of the employees. The rigidity of lean was reflected through the behaviour of Japanese supervisors who were seen as being impatient and often aggressive towards workers. As part of the lean production practices, shop floor workers were forced to perform menial jobs such as cleaning the machines and mopping the floor.

Chalta hai (it goes, it is ok, it will do, anything will do) is a phrase in the Indian context that represents an easy-going approach. One interviewee described chalta hai as an antithesis to the idea of perfection and quality. Whilst the tool of lean production is intolerant of imperfection, one interviewee suggested that the Indian workers were grounded on the culture of things are acceptable as long as the heavens don’t come down. This laid- back and relaxed attitude to work clearly contradicted the demands of lean production practices.

QC is another key tool used in the lean production practice. Employees are expected to catch up in teams during their break times to discuss work processes and explore options for kaizen (continuous improvement). This offended the Indian workers who preferred to have the break times for socialisation. Moreover, the Indian workers did not want to think of work when they were outside their workstation, but only family and social activities. Even more important is the ‘all things will come out right in the end’ approach (Tully 1991) and leaving the debates open without a firm conclusion, an approach to the Hindu religion’s intellectual tolerance (Sen 2005). Hence, QCs were not considered as relevant to the work process and the workers termed it as ‘colonisation of private space’ by the company.

Lean production demands strict commitment to a standardised, disciplined, systematic, planned, and process-driven approach. However, this contradicted the Indian concept of jugaad (somehow get it done, explore alternative means or look for short-cuts to get things done), a historical mindset evolved within a context of scarce resources, necessity, personal survival, more often applied when things fail to work (Chadha 2009). From the perspective of TKM, the social ecosystem of the workforce comprised young men recruited from villages, who were invariably imbued to the concept of jugaad. For the lean professional practitioners, this again was an antithesis to quality, reliability, longevity, and robustness. Bose and Pratap (2012, 59) highlight the plight of Maruti-Suzuki (another Indo-Japanese joint venture) in stronger terms by quoting a company secretary (of a Tier 1 supplier plant of Suzuki) as

one who is gladiator type of slave labour personified ready to die for the living of his unethical bosses as capital personified, who does not talk to fellow workers, who does not see anything other than what he is told to see, who does not hear anything other than what the bosses say to him and who does not do anything on the shopfloor other than what he is told to do.

The performance appraisal system within the lean paradigm was used as a tool to control and to discipline workers. Das and George (2006) reported that the appraisal system employed attendance, teamwork, attitude, quality, cost reduction, behaviour, and adaptability as measurement criteria. A four-point scale, poor, average, good, and very good, was used to mark the performance of the employees. Only two of these seven criteria were objectively measured (attendance and quality) the other five relied on subjective interpretation on the part of the supervisor. As a result, the appraisal could be easily manipulated by the supervisor and to develop a hierarchy amongst workers who are essentially of the same status.

In line with this, the formation of teams and team leaders conflicted with the local cultural and social institutions. For instance, the local workers opposed the team leaders who hailed from the neighbouring State with who the domiciles had historical enmity. Team memberships were more forced upon the workers and the cohort comprised of people from different social and cultural background which the domicile workers found offensive and uncomfortable to work together. This affected the QCs as well as they did not want to socialise with the ‘others’. Apart from this, when a junior member was elevated to the status of team leader, it contradicted the social system of ‘respect to age more important than qualification’. Thus, an unacceptable hierarchy was created alongside an imposed approach towards team formation.

As reported in our earlier findings, disrespect was ubiquitous both in its corporate and functional levels affecting individuals (workers), groups (such as unions), and the local community (Mathew and Burgess 2018). Verbal and physical abuses violated individual workers of the subsidiary; the refusal to accept trade unions and banning them from the plant considerably affected the respect of age old and entrenched (in the Indian industrial process) institution; and ignoring the sacred values and bringing even the political system to its command through appeasement and threats by the company created a general feeling of discomfort among the wider society, as evident from our data. This validates Braga et al.’s (2019) argument that organisational specific codes of conduct and behaviours can override institutional resistance, especially in a weak (host country) context.

This case study frames the concept of disrespect as a direct consequence of ongoing disregard of host country institutions. The evidence indicates strong resistance from the workers, local community, and the local trade unions against the implementation of lean discourse in the Indian subsidiary. The analysis of data brings forth the reason behind this strong resistance as disrespect to the socio-cultural institutions of the host country. Though the MNE attempted to manage and control institutional resistance, the near two decades long industrial unrest supports the argument that institutional resistance poses difficulties for MNEs to change the mindset of employees at the subsidiaries (Som 2006).

The intensity of resistance could also be attributed to the fact that Indian workers were evolving from a traditional welfare-oriented and collectivist workplace towards an efficiency and individual oriented production system (Budhwar and Khatri 2001). ‘Respect’, as an expected care, is an unwritten code implicit in Indian social interactions. The nearest western concept could be the ‘psychological contract’, defined as ‘belief in what the employer is obliged to provide’ (Robinson et al 1994, 246). This is evident from the case study of Mercedes-Benz in India, where the leader–member exchange on the shop floor was fundamentally paternalistic at its core (see Becker-Ritterspach 2009). Therefore, it could be argued that concepts of paternalism and psychological contract align with the employee expectation of respect as a perceived obligation of employers, which when violated led to resistance.

Summary

Our findings suggest that disrespect delays or even blocks attempt to regain institutional legitimacy, as it affects the fundamental existence of socio-cultural institutions perpetuating employee unrest. The recurring unrest at TKM supports this claim. This research contributes to the neo-institutional theory (Powell and DiMaggio 2012) by claiming that disrespect is vital in the sociological view of institutions. In line with Honneth’s (1992) third form of disrespect, complete denial to the forms of living, our findings show how managerial dominance and unilateralism conflicted with the host country institutions – the unrest recurring from time to time. This paper identifies a series of actions leading to disrespect of Indian institutions at TKM, as evident from the data analysis. It also evidences how unilateral approaches affect the socio-cultural institutions inflicting disrespect. The series of incidents reported contradicts the lean philosophy of ‘mutual trust and respect’. The findings suggest disrespect as a key theme in the study of institutional theory. As evident throughout the past two decades, the rigid attitude of Japanese managers led to major unrest across the individual, group, and society axes. This rigidity was transferred to the Indian managers and supervisors who though aware of the local culture are bound by the lean system demands. Though the production processes were adjusted with amendments to lean practices for a short period of time, the essential rigidity of ‘lean’ remained subtle for a short period of time, just to re-emerge with its inherent severity in the plant, now through the local managers and supervisors. The conflict between the lean system and local institutional factors is continuing, with industrial unrest an ongoing challenge at the subsidiary. One of the key factors that we discovered was that the company failed to understand the institutional overlap in the Indian context, where the politico-legal institution is married to the socio-cultural institution. Disrespect sent ripple effects across these institutions resulting in unrest. The ongoing unrest suggests that MNEs must conform to the context by way of ‘acceptable and appropriate behaviours’ (Braga et al 2019, 16).

We followed a case study approach in this paper which limits generalisation of our findings. Moreover, this case being confined to the Indian context may not be possible to replicate elsewhere. Another shortcoming of this case study is that it was conducted in only one part of India. India is an extremely diverse country in terms of language, culture, caste, religion, and value systems. This provides opportunity for future researchers to expand the sample base to have a wider and broader understanding of the concept of disrespect within the institutional ecosystem.