___________

Submitted to:- Efforts By:-

Dr. B.K. Jha Vinod Kumar-MBA-4563/08

Amit Kumar-MBA-4564/08

Diksha Mehtani-MBA-4565/08

Kumar Shashi Ranjan-MBA-4566/08

Shivani Bhambri-MBA-4567/08

ACKNOWLEDGEMENT

Our report would be incomplete without thanking a few people.

First of all, we are highly obliged to all the people who have helped us formulate this assignment.

We would like to express our gratitude towards our teacher, Dr. B.K. Jha without whose constant
support, supervision and suggestions, this assignment would have not been possible.

We would also like to sincerely thank all our colleagues who made it very comfortable for us to work
with them and provide us with a great deal of knowledge.

We would also like to extend a word of thanks to all the respondents for their cooperation.

Inspite of our best efforts, some errors might have crept in. We shall be grateful to all if the same is
brought to our notice. We hope that we live up to the expectations of everyone.

Thanking You
 Vinod Kumar-MBA-4563/08

Amit Kumar-MBA-4564/08

Diksha Mehtani-MBA-4565/08

Kumar Shashi Ranjan-MBA-4566/08

Shivani Bhambri-MBA-4567/08

COMPANY PROFILE

The Hero Honda story began with a simple vision – the vision of a mobile and an empowered India, powered by
Hero Honda. This vision was driven by Hero Honda’s commitment to customer, quality and excellence, and
while doing so, maintains the highest standards of ethics and societal responsibilities. Twenty five years and 25
million two wheelers later, Hero Honda is closer to fulfilling this dream. This vision is the driving force behind
everything that we do at Hero Honda. We understood that the fastest way to turn that dream into a reality is by
remaining focused on that vision.

There were many unknowns but we kept faith, and today, Hero Honda has been the largest two wheeler
company in the world for eight consecutive years. Our growth has kept compounding. The company crossed the
ten million unit milestone over a 19-year span. In the new millennium, Hero Honda has scaled this to 15 million
units in just five years! In fact, during the year in review, Hero Honda sold more two wheelers than the second,
third and fourth placed Two-wheeler Company put together. With Hero Honda, the domestic two wheeler
market was able to show positive growth during the year in review. Without Hero Honda, the domestic market
would have actually shrunk.

Over the course of two and a half decades, and three successive joint venture agreements later, both partners
have fine-tuned and perfected their roles as joint venture partners. What the two partners did was something
quite basic. They simply stuck to their respective strengths. As one of the world's technology leaders in the
automotive sector, Honda has been able to consistently provide technical know-how, design specifications and
R&D innovations. This has led to the development of world class, value - for- money motorcycles and scooters
for the Indian market. On its part, the Hero Group has taken on the singular and onerous responsibility of
creating world-class manufacturing facilities with robust processes, building the supply chain, setting up an
extensive distribution networks and providing insights into the mind of the Indian customer. Since both partners
continue to focus on their respective strengths, they have been able to complement each other. In the process,
Hero Honda is recognized today as one of the most successful joint ventures in the world. It is therefore no
surprise that there are more Hero Honda bikes on this country's roads than the total population of some
European countries put together!

The company's meteoric growth in the two-wheeler market in India stems from an intrinsic ability to reach out
and come closer to its customers, with every passing year. Hero Honda's bikes are sold and serviced through a
network of over 3500 customer touch points, comprising a mix of dealers, service centres and stockists located
across rural and urban India. Hero Honda has built two world-class manufacturing facilities at Dharuhera and
Gurgaon in Haryana, and its third and most sophisticated plant at Haridwar has just completed a full
year of operations. It is difficult to imagine that all this has happened in the span of just
two and a half decades!

The best is yet to come. During the year in review, Hero Honda powered its way in a market that, for all
practical purposes, was feeling the full effects of the economic slowdown in India. With an economic recovery
now clearly on the cards, Hero Honda is all set to ride into another summit. As Brijmohan Lall Munjal, the
Chairman, Hero Honda Motors succinctly puts it, "We pioneered India's two wheeler industry, we've steered it
through difficult times; now it is our responsibility to set the pace again”.

Few key points about Hero Honda:

• Incorporated in January 1984

• World’s largest motorcycle manufacturer
• Two manufacturing plant in Haryana
• Record sales of 2.6 million bike in 2004
• Actively involved in road safety.

HERO HONDA'S MISSION

Hero Honda’s mission is to strive for synergy between technology, systems and human resources, to produce
products and services that meet the quality, performance and price aspirations of its customers. At the same
time maintain the highest standards of ethics and social responsibilities.
This mission is what drives Hero Honda to new heights in excellence and helps the organization forge a unique
and mutually beneficial relationship with all its stake holders.

HERO HONDA'S MANDATE

Hero Honda is a world leader because of its excellent manpower, proven management, extensive dealer
network, efficient supply chain and world-class products with cutting edge technology from Honda Motor
Company, Japan. The teamwork and commitment are manifested in the highest level of customer satisfaction,
and this goes a long way towards reinforcing its leadership status.

KEY POLICIES FOLLWED BY HERO HONDA

AN ENVIRONMENTALLY AND SOCIALLY, AWARE COMPANY

At Hero Honda, our goal is not only to sell you a bike, but also to help you every step of the way in making
your world a better place to live in. Besides its will to provide a high-quality service to all of its customers,
Hero Honda takes a stand as a socially responsible enterprise respectful of its environment and respectful of the
important issues.
Hero Honda has been strongly committed not only to environmental conservation programmers but also
expresses the increasingly inseparable balance between the economic concerns and the environmental and
social issues faced by a business. A business must not grow at the expense of mankind and man's future but
rather must serve mankind.

"We must do something for the community from whose land we generate our wealth."
A famous quote from our Worthy Chairman Mr.Brijmohan Lall Munjal

Environment Policy

We at Hero Honda are committed to demonstrate excellence in our environmental performance on a

continual basis, as an intrinsic element of our corporate philosophy.
To achieve this we commit ourselves to:

• Integrate environmental attributes and cleaner production in all our business processes and practices
with specific consideration to substitution of hazardous chemicals, where viable and strengthen the
greening of supply chain.
• Continue product innovations to improve environmental compatibility.
• Comply with all applicable environmental legislation and also controlling our environmental discharges
through the principles of "alara" (as low as reasonably achievable).
• Institutionalize resource conservation, in particular, in the areas of oil, water, electrical energy, paints
and chemicals.
• Enhance environmental awareness of our employees and dealers / vendors, while promoting their
involvement in ensuring sound environmental management.

 Example of ethical practice: Among the two and three wheelers, both selected models of Hero Honda
(Splendor and CD 100) are the most eco friendly two wheelers. They have scored above average in vehicle
and engine design and are one of the very few four-stroke two wheeler fitted with any kind of pollution
control equipment.

Quality Policy

Excellence in quality is the core value of Hero Honda's philosophy.

We are committed at all levels to achieve high quality in whatever we do, particularly in our products and
services which will meet and exceed customer's growing aspirations through:

• Innovation in products processes and services.

• Continuous improvement in our total quality management systems.
• Teamwork and responsibility.

 Example of ethical practice: On the comparative performance undertaken for two-stroke and four-
stroke two wheelers, the outcome clearly established that four stroke two-wheelers are better that two stroke
two-wheelers with respect to both emission and fuel efficiency. The carbon monoxide (CO) and
hydrocarbons and nitrogen oxides (HC+NOx) emitted by two-stroke two-wheelers (with catalytic converter)
are 23 per cent and 38 per cent, respectively higher than their equivalent four-stroke two-wheelers without
catalytic converter.

Safety Policy

Hero Honda is committed to safety and health of its employees and other persons who may be
affected by its operations. We believe that the safe work practices lead to better business
performance, motivated workforce and higher productivity.

We shall create a safety culture in the organization by:

• Integrating safety and health matters in all our activities.

• Ensuring compliance with all applicable legislative requirements.
• Empowering employees to ensure safety in their respective work places.
• Promoting safety and health awareness amongst employees, suppliers and contractors.
• Continuous improvements in safety performance through precautions besides participation
and training of employees.

 Example of ethics followed: The performance and safety of your bike not only depends on
the world class design and workmanship assured by Hero Honda but also on the parts being used in
the assembly line. Even the finest components manufactured need replacement from time to time.
And to ensure the continued impeccable performance of your vehicle, the spare parts should also be
made and replaced as good as the components fitted by Hero Honda.
 To ensure this, we manufacture and procure the replacement parts according to the specifications
and standards set by us and Honda Motor Co. As a responsible Hero Honda bike owner, we
recommend that for your safety, long life and high performance of your bike, use only Hero Honda
genuine parts.

HERO HONDA FOLLOWS 3E’s IN FORM OF ETHICS

As a socially responsible company we urge you to join us in making this world a safer, healthier and more
environment friendly place.

At Hero Honda we like to promote the three E’s.

Engineering – which is the right technology, specifically designed for Indian customer requirements, and road
conditions? It is exemplified in the 4-stroke Hero Honda engines that give you amazing reliability and fuel-
efficiency, year after year. We have always manufactures 4-stroke engines, ever since inception in 1985.

Environment – which is about ensuring that the high technology 4-stroke Hero Honda motorcycles continue to
meet the most stringent pollution control norms at every level – as they have since the very beginning?

Education – which is about promoting comfortable and safe driving, through a wide dealer network and service
centers; as well as in educating people on road safety, in association with the traffic police and the transport
department. Do remember that you and your family are not only riders, but pedestrian as well.

It is as part of the Hero Honda family that ‘We Care’ to drive home the message of Road Safety and a Healthy
Environment.
Our Hero Honda, the environment and you. It is a three-way relationship that you should nurture, to reap the
benefits for years to come. A well tuned bike keeps the environment healthy. Good riding practices will keep
you healthy. Taking good care of your bike will always keep your bike healthy.

Here are simple steps to a healthy bike, healthy environment, and a healthy you.

• Health and Environment

• Safety
• Facts and Information
• Social Responsibility

We are certain that you too will take pride in being a true Hero Honda Good Rider.

CODE OF CONDUCT FOR DIRECTORS AND SENIOR MANAGEMENT

1. INTRODUCTION

This Code of Conduct has been adopted by the Board of Directors of Hero Honda Motors Limited for its
members and the senior executive’s one level below, the Directors, including all functional heads
(hereinafter referred to as "Specified employee").

There are certain clauses of the Code, which are meant for Directors only such as attending meetings of the
Board and Committee thereof. The Specified employees need to ignore such clauses.

The principal duty of the Board of Directors, along with management, is to ensure that the Company is well
managed in the interests of its shareholders. The Board of Directors plays the central role in the Company's
governance. It is the Company's decision-making authority on all matters except those reserved to
shareholders or delegated to the management. The Board of Directors is not expected to assume an active
role in the day-to-day management of the Company.

II. GUIDELINES FOR CONDUCT

Each director and Specified Employees seek to use due care in the performance of his/her duties, be loyal to the
Company, act in good faith and in a manner such Director and Specified employee reasonably believes to be not
opposed to the best interests of the Company. A Director and Specified employee should seek to also:
 • Make reasonable efforts to attend Board and committee meetings.
• Dedicate time and attention to the Company.
• Comply with all applicable laws, regulations, confidentiality obligations and corporate policies of the
Company.
• Be independent in judgment and actions and to take all reasonable steps to be satisfied as to the
soundness of all decisions taken by the Board of Directors.

III. CORPORATE BUSINESS OPPORTUNITIES

In carrying out their duties and responsibilities, Directors and Specified employees should avoid:

• Appropriating corporate business opportunities for themselves that are discovered through the use of
Company property or information or their position as Directors and Specified employees.
• Using Company property or information, or their position as Director and Specified employees, for
personal gain.
• Competing with the Company.

A corporate business opportunity is an opportunity:

 1. Which is in the Company’s line of business or proposed expansion or diversification?
2. Which the Company is financially able to undertake.
3. Which may be of interest to the Company?

A Director and Specified employee, who learns of such a corporate business opportunity and who wishes to
avail of it should disclose such opportunity to the Company's Board of Directors. If the Board of Directors
determines that the Company does not have an actual or expected interest in such opportunity, then, and only
then, may the Director and Specified employee avail of it, provided that the Director and Specified employee
has not wrongfully utilized the Company's resources in order to acquire such opportunity.

 Example of ethical practice: Hero Honda commences production at its new manufacturing plant in
Haridwar. Hero Honda and its ancillaries have already generated direct employment opportunities for
over 2,000 people in the state. Along with employment, emphasis has also been laid on training and
learning. The plant has set up a Gurukul within the complex, which serves not only as a learning centre
for all employees who join the plant, but also for their continuous development and up gradation of
skills.

IV. CONFLICTS OF INTEREST

• Each Director and Specified employee should Endeavour to avoid having his or her private interests
interfere with:
i) The interests of the Company or
ii) ii) His or her ability to perform his or her duties and responsibilities objectively and
effectively.
• They should avoid receiving, or permitting members of their immediate family to receive, improper
personal benefits from the company, including loans from or guarantees of obligations by the Company,
except as may be provided in their employment contract.
 • They should make a full disclosure to the entire Board of any transaction or relationship that such a
Director and Specified employee reasonably expects could give rise to an actual conflict of interest with
the Company and seek the Board's authorization to pursue such transactions or relationships.

V. COMPANY PROPERTY

In carrying out their duties and responsibilities, Directors and Specified employees should Endeavour to ensure
that management is causing the Company's assets, proprietary information and resources to be used by the
Company and its employees only for legitimate business purposes of the Company.

VI. CONFIDENTIAL INFORMATION

Director and Specified employees should maintain the confidentiality of information entrusted to them in
carrying out their duties and responsibilities, except where disclosure is approved by the Company or legally
mandated or if such information is in the public domain.

The Company's confidential and proprietary information shall not be inappropriately disclosed or used for the
personal gain or advantage of any Director and Specified employees or anyone other than the Company. These
obligations apply not only during a Director's and Specified employee's term, but thereafter as well.

VII. FAIR DEALING

In carrying out their duties and responsibilities, Director and Specified employees should Endeavour to deal
fairly, and should promote fair dealing by the Company, its employees and agents, with customers, suppliers
and employees.

Director and Specified employees should not seek to take unfair advantage of the Company through
manipulation, concealment, abuse of privileged information, misrepresentation of material facts or any other
unfair dealing.
VIII. COMPLIANCE WITH LAWS AND REGULATIONS

In carrying out their duties and responsibilities, Directors and Specified employees should comply, and
Endeavour to ensure that the management is causing the Company to comply, with applicable laws, rules and
regulations. In addition, if any Director and Specified employee becomes aware of any information that he or
she believes constitutes evidence of a material violation of any securities or other laws, rules or regulations
applicable to the Company or the operation of its business, by the Company, any employee or another Director
and Specified employee, then such Director and Specified employee should bring such information to the
attention of the Chairman of the Audit Committee.

IX. INSIDER TRADING

Director and Specified employees should observe all applicable laws and regulations including the Company
policies and Codes as applicable to them with respect to the purchase and sale of the Company's securities. It is
the responsibility of each Director and Specified employee to become familiar with and understand these laws,
regulations, policies and codes and should seek further explanations and advice concerning their interpretation,
if required.

Any waiver of or amendments to the Company's policies or Codes may be made only by the Company's Board
of Directors and will be disclosed promptly as required by applicable laws and regulations including the rules of
any exchange on which the Company's securities are listed or traded.

Director and Specified employees should direct questions regarding the application or interpretation of these
guidelines to the Company Secretary/Compliance Officer.

CORPORATE SOCIAL RESPONSIBILITY (CSR)

STAKEHOLDER TIES AT THE GRASSROOTS

Hero Honda Motors takes considerable pride in its stakeholder relationships, especially ones developed at the
grassroots. The Company believes it has managed to bring an economically and socially backward region in
Dharuhera, Haryana, into the national economic mainstream.
An Integrated Rural Development Centre has been set up on 40 acres of land along the Delhi-Jaipur Highway.
The Centre-complete with wide approach roads, clean water, and education facilities for both adults and
children-now nurtures a vibrant, educated and healthy community.

The Foundation has adopted various villages located within vicinity of the Hero Honda factory at Dharuhera for
integrated rural development. This includes:

• Installation of deep bore hand pumps to provide clean drinking water.

• Constructing metalled roads and connecting these villages to the National Highway (NH -8).
• Renovating primary school buildings and providing hygienic water and toilet facilities.
• Ensuring a proper drainage system at each of these villages to prevent water-logging.
• Promoting non-conventional sources of energy by providing a 50 per cent subsidy on biogas plants.

Other key projects taken up by the Foundation include:

Raman Munjal Vidya Mandir

The Raman Munjal Vidya Mandir began with three classes (up to class II) and 55 students from nearby areas.
It has now grown into a modern Senior Secondary, CBSE affiliated co-educational school with over 1200
students and 61 teachers. The school has a spacious playground, an ultra-modern laboratory, a well-equipped
audio visual room, an activity room, a well-stocked library and a computer centre.

Raman Munjal Memorial Hospital

Multi-specialty hospital equipped with the latest diagnostic and surgical technology. The Raman Munjal
Memorial Hospital provides healthcare to the rural population in and around Dharuhera, and also caters to
accident and trauma victims driving along the Delhi-Jaipur highway.

Raman Munjal Sports Complex

The Raman Munjal Sports Complex has basketball courts, volleyball courts, and hockey and football grounds
are used by the local villagers. In the near future, sports academies are planned for volley ball and basket ball, in
collaboration with National Sports Authority of India.
Vocational Training Centre

In order to help local rural people, especially women, Hero Honda has set up a Vocational Training Centre. So
far 26 batches comprising of nearly 625 women have been trained in tailoring, embroidery and knitting. The
Company has helped women trained at this centre to set up a production unit to stitch uniforms for Hero Honda
employees. Interestingly, most of the women are now self-employed.

Adult Literacy Mission

This Scheme was launched on 21st September, 1999, covering the nearby villages of Malpura, Kapriwas and
Sidhrawali. The project started with a modest enrolment of 36 adults. Hero Honda is now in the process of
imparting Adult Literacy Capsules to another 100 adults by getting village heads and other prominent villagers
to motivate illiterate adults.

Marriages of underprivileged girls

Marriages are organized from time to time, particularly for girls from backward classes, by the Foundation by
providing financial help and other support to the families.

Rural Health Care

Besides setting up a modern hospital, the Foundation also regularly provides doorstep health care services to the
local community. Free health care and medical camps are now a regular feature in the Hero Group's community
outreach program.

 As a part of ‘Hero Honda We Care’, the company’s Corporate Social Responsibility (CSR) program,
the company has lined up several initiatives that promise to bring about significant improvements in the lives
of people residing in Haridwar and neighboring areas. This is reflective of the sustainability mantra that Hero
Honda has always believed in and followed wherever it does business.

A group company will be setting up a Technology Park, two Industrial Parks and a shopping mall within the
plant complex over the next two years. Housing issues will be addressed with the construction of two residential
complexes. Accessibility of quality healthcare and education are other priority areas, and accordingly the
company plans to set up 200-bed hospital and a school within the plant complex. All this envisions creation of
an industrial cluster in Uttarakhand which will multiply generation of wealth and prosperity in the region.
 UNIQUE PROGRAMME OF ROAD SAFETY

As a caring company, Hero Honda has taken up the initiative to inculcate a sense of road safety and good riding
habits to its customers and public at large.

Safety Riding Initiatives

PHASE I:

• Safety Launch in Oct’99from India Gate, New Delhi

 • Invitation to all State Police Chiefs

• All State Traffic Police Participation And Training During Launch

• Safety Launch in all Metros In India with Traffic Police

PHASE II: Hero Honda’s Unique ‘S4’ Safety Concept In India

• S4 Concept (Sales, Service, Spares, Safety)–First time in the automobile Industry

• Safety education to customers at Hero Honda Dealerships -An integral part of
Motorcycle Delivery Process at 4S Dealerships
• Safety Corner At Showroom
• Safety Education Material
• good rider booklets
• Safety leaflets
• Safety Education Video For Customers

PHASE III:
Hero Honda wishes to set-up an exclusive 2-wheeler Safety Riding Training School at Delhi in
association with the Transport department, Govt. of NCT, Delhi

UNETHICAL BEHAVIOUR PRACTISED BY HERO HONDA

These are some direct complaints launched by the customers of Hero Honda
 I want to complaint about the Hero Honda Showroom (Nikhi Motors), which is located in karnataka,
Bangalore. I booked HH glamour with disc brakes on December 12, 2006. The next day, that is
December 13, 2006, a representative of this showroom gave me a call and told me that the stock has
arrived and I should come and pay the down payment, so I dropped to the showroom and inquired about
the vehicle. They told the amount to be paid and took the cash. After receiving the cash, they are
informing me that they do not have HH glamour with disk brake so asked me to go with the drum
brakes. I told them that I want only HH glamour with disc brakes, so they told me to wait for two more
days. I waited and waited for at least two weeks. After two weeks, when I reached the showroom, they
are informing me that there is some problem with the HH glamour bike (disc brake), so the company is
not willing to send the consignment of HH glamour disc brake from Dehli, so go with drum brakes. I
told them I don't want the bike so refund the amount, but they were not ready to refund the amount and
started pursuing me to go with drum brakes. Is this the way that a company handles a customer.

 I have purchase a Hero Honda CD -Deluxe bike in mid of the Dec. 2006 from Auto Needs, Gurgaon.
From the very first day, it gave me 49-50KM/lt mileage. At the time of purchase a representative of the
showroom told me that it gives 80 KM/lt mileage. Further, it gives very poor performance at the time of
using 3rd or 4th gear. The gear shift is very hard while we are changing the gear. The Handle of this
bike is also very week. Overall, I am totally dissatisfied with this bike.

 I have buy Super Splendar Motor Cycle from Surya Motors Abohar through Nagpal Motors Malout.
After Three services from Nagpal Motors Malout it is giving per Liter average of 35-40 k.m. I do
complain regarding this to Nagpal Motors Malout but all in vain.

 I purchased i hero honda pleasure few month ago and and i am facing self start problem from the first
day. They also replaced battery and charged it several times but i am not getting the solution and lot of
time get wasted in this things to go there and get checked every time.
 I have purchased one bike model Ambition-135 (Silver color) on 20th Feb'2005 from Brij Bi-Wheelers
Mathura. The bike is working perfectly all right and run about 7200 km till date. The only problem is
now in its looks. At the time of purchase, it had got some plastic lamination on sides beside the seat and
in the front near head light. It is not possible to remove the stickers and the bike is looking really dirty. I
have gone to your service center for washing and servicing, but the problem is not solved. I love my
bike really much and many of my friends got inspired from me and purchased ambition or other hero
honda bikes, as i am very much influenced from your services and works. Please try to solve my
problem to remove the plastic cover from the bike, so that my faith in hero honda always remain as it is
today.

I contacted dealer in Mathura (Mr. S.K.Pradhan-9897003866) he told me that the problem cannot be
solved. I mailed you earlier through your site but nobody responded back. Kindly help me to solve this
problem, so that the faith can be maintained in Hero Honda.

 I want to complaint about the Hero Honda Showroom Morani Motors Jaipur Rajasthan. After servicing
from Morani motors When I went to take bike, he told me that you are not using your bike from last one
month because of that battery current wire is break and we are not responsible for that you go to some
other shop. He is not accepting his fault and when I told him that you have to inform me earlier then he
said we only inform you after full servicing.His behavior is not good towards us.

Before giving bike to Morani Motors there is no such type of any problem in bike. It already run
7000km without any such problem.

 I want to complaint about Hero Honda Ambition Bike. I have purchased Hero Honda Ambition in
October-2002. After 15 days, i faced lots of technical problems with my bike that i am not able to
explain in this mail thread. During 2 years of journey with Ambition in my life, the frustration I faced
was unbelievable as after every two weeks, my bike was at service point to sort out technical problems. I
thought that HeroHonda launched that product without any performance testing and then they played
with customers bikes to resolve technical defects. This is a very bad experience from Hero Honda.
 Finally i sold my bike in July 2006 at the price of 23000. Oh God.. What is depreciation cost in 4 years
of Hero Honda product??.

 I bought a Hero Honda Passion Plus Motorcycle in August 2004 at Ravi Motors, Tumkur.
Since then I have been tortured by your after sales service.
I gave my bike for service at Max Motors, Rajkumar Road. These people are devils agents. When I gave
my bike for service, everything was perfect. I gave it only as per the milage plan that every 2-3000 Kms,
it has to be serviced.
But when I got my bike back from service, i went for a test drive and found that the chain was making a
lot of noise. I went back to service centre and after 30 minutes, one guy came and told Chain Sprocket is
broken and I have to pay 650 if I want it repaired. I told him when i gave the bike for service it was
perfect. He then called his manager and he started shouting at me. He said that they do only those repairs
that I mention in job card. I told him that before service chain sprocket was perfect and now after the
service the chain sprocket is broken. The manager shouted that they only do minor adjustments and its
not their fault and asked me to take my bike and leave.
Though I was tempted to escalate the issue, it was at 11.45 in the morning and I had left all my other
work and was waiting there.
Can you kindly inform me what gave Hero Honda, the inspiration to provide such pathetic service? Did
I ever refuse to pay for the service? Did I ever demand my bike to be returned in minutes? All I wanted
was the faulty parts to be rectified and the bike to serviced to good condition so that my drive will be
smooth.
But Hero Honda only wants to retain their Worlds No1 slot (I doubt that) and they do not care how the
customers and their bikes are treated once Hero Honda gets money.

This can be resolved by following the ethical practices. Cheating on the customers is unethical on part of
the company. They must practice what they preach.

THE ‘INFAMOUS’ CASE

• Subsidiary of Honda: 3000 employees: Plant set up in 1999

• Aim: Produce product of highest quality at reasonable price
• Honda philosophy of 3 joys: Buying/selling/manufacturing
 • Alleged indifferent & authoritarian Indian middle mgt.
—Alleged assault by Japanese Manager

• Failed to meet WM expectation: Diwali gift/leave/Lack of respect

• Worker’s attempt to unionize: Mgt.’s resistance and action:
• Violence on 25 July—Media coverage—State Govt. involvement
• Loss due to strike/Go-slow/ Lockout: approx 28MM USD

Key Issues and Problems:

1. Mgmt.’s approach to practicing a non-union model made them blind to reality DID NOT LISTEN
TO WORKERS
2. Workers viewed Mgmt activity as coercive and repressive
3. Incompetent people mgt. by Indian Middle managers—Indifference
4. Indian mgmt. blocking direct access to top company executive
5. The 3 joys of HONDA were used as a means of control
6. Issues in cross-cultural management
7. Japanese didn't understand issues in managing Indian people
8. Failure of mgt. to realize importance of Diwali in Indian IR
9. Tokenism of conciliation in resolving collective issues
10. Complacency on the part of Indian mgrs. about labour power
Police beating HONDA workers on 25th July, 2005
Workers meet Sonia Gandhi against alleged high handedness of Honda
management and the police

Key causes of the HONDA’s Difficulty

 1. Management taking Workers for granted:
• Power of the former leadership not taken into account – he was well liked Mr. Singh had been well liked
• No safety valve for Workers or way to address Grievances
• Overlooking the importance of Diwali to Indians – giving only a small gift (Rs. 600 given)
• Worker facilities not provided - request dismissed
• Strict system of granting leave: Sermons given
• Idiosyncratic VP (Mfg.): A hard task master with 14 ft stick
—Kicked a WM who was 2 minutes late after tea

• Too many memos issued: Fear of managerial authority

• WM perceived partiality in posting by managers: Divide & Rule also
• Big difference between Hero-Honda & HMSI salaries: WM living together
• Negative policies of the mgt. regarding union-formation made workers more determined - created
fertile ground for the flare up
• High-handedness of the police, “fighting fire with fire”

2. Ill prepared HR/IR team not able to tell the emperor he had no clothes

—Poor HR Advocate Role

—HR/IR chief as an assistant mgr—He reported to Mfg. Head

3. Small Number of HR/IR Team:

--Only 10-12 out of 3000 people

4. No internalization of HR procedures & Practices:

—No procedure for charge sheet

—Japanese thought people never revolt because they are “gentle and not aggressive”
5. No alignment of Business & HR/IR Strategy

6. Low salary compared to Hero-Honda (same region)

7. Contract Workers removed every 6 months: Anguish constant training

Lessons in People management from the HONDA case

1. Leadership matters
2. Competent HR department is key
3. Well crafted and communicated Mission and Vision
4. Maintain channels of communication
5. HR Strategy must align with and support business
6. Listen to Employee concerns and issues for Organizational Justice
7. Use HR Interventions (BOTH HARD AND SOFT) as tools for success
(welfare plans, empowerment, reward and recognition, etc.)

8. Keep cross-cultural issues in view

9. Establish a sense of urgency
10. Recruit and Retain Talent - right person In right job at the right time
11. Be clear about performance and results – let them drive success
12. Create short term wins (reward and recognition)

SUGGESTIONS TO MAINTAIN ETHICS

I. CUSTOMER SATISFACTION

Market-oriented industries like Hero Honda, Tata etc. live and die with the satisfaction of their customers and
thus view customer satisfaction as their life line. Thus extensive efforts are made to gauge customer
expectations and reactions to services in a continuous effort to improve, build and expand market share. If their
customers are unhappy, industries know they are unlikely to survive. If their customers are happy, the use of
their products and services and the likelihood of greater profits increase.

Organizations can take one or more of the following steps to have customer satisfaction as it has become an
ever more central part of organizational culture:

1. A 100 percent customer satisfaction mission: Organizations committed to customer satisfaction revise their
focus and mission to emphasize customer satisfaction and commit to analyzing organizational practice and
service delivery against the new mission statement.

2. Staff training, empowerment, and rewards: To improve staff’s attitudes and skills, high-performing
organizations provide training and retraining, establish employee incentives, and reward staff for achieving
customer service standards. They empower staff with the flexibility and authority to resolve customer
complaints and make on-the-spot decisions related to customer satisfaction.

3. Customer feedback and accountability: Customer feedback allows providers to ascertain directly from
customers whether intended changes and improvements are being experienced by families receiving service.
Ongoing feedback mechanisms are essential to review service improvements nd make sure that customer
service strategies adopted by the agency are actually achieving desired impact on families as well as meeting
customers’ expectations.

4. Incentives and consequences: Although performance incentives are important in all customer-focused
organizations, they are especially important in public and nonprofi t agencies where the profi t motive is
absent. Some rewards and incentives might include awards for managers, divisions or units, and individual
frontline staff; funds for a division to augment their customer satisfaction approaches; and recognition of
improvements made through public announcements and other published materials for the public. For example,
participating agencies will agree to have regularly published performance reports—shared internally and
perhaps competitively across divisions and—submitted to political leaders, parent organizations and funders
who care about quality service.

5. Customer-oriented culture: Creating and instilling a “culture” of customer service is the hallmark of a
successful organization in a market-driven approach. This culture includes both management and frontline
employees and involves a host of management and organizational processes such as staff selection and
training, teaming and other structures, customer satisfaction measurement, and accountability feedback loops.

II. ENVIRONMENT CARE

1.Adopt environment management systems (EMS): Almost half of the automobile sector has adopted
environment management systems (EMS) standards. However ISO 14001 adopted by automobile companies is
not the actual reflection of their environment management as these have just assembly plants. Most of their
processes are outsourced and the major pollution happens at vendor's site and during product use and disposal.
Thus, ISO 14001 only takes care of very small percent of pollution generated by the companies. Thus,
automobile sector must adopt an environment management system, which reflects the environmental aspects of
automobile business and not to use the existing system, which is production centric.

2. Government on its part should come out with economic instruments as its major tool to regulate automobile
companies. Pollution control body too needs a complete rethinking of its regulatory approach to this sector.
Wastewater characteristics, solid/hazardous waste management, paint sludge incineration, dioxin and furans are
some major aspects of automobile pollution during manufacturing process-regulations for which are either weak
or non-existent. Downstream pollution checks and supply chain management are also some issues where
regulatory bodies will have to do some soul searching.

3. Study based on analysis of three diesel-fuelled mass transport vehicles and two CNG fuelled mass transport
vehicles clearly showed that CNG fuelled vehicles are far better in terms of tail pipe emissions than the diesel
fuelled mass transport vehicles. CNG-fuelled vehicles have as much as five times lower particulates and overall
73 per cent lower emissions than their diesel counterparts. So CNG fuelled vechicles must be initiated.

Some other findings related to production process:

1) The entire sector uses paints that contain heavy metals and are based on solvents. No company uses water
based paints.
2) The regulatory standards for wastewater characteristic applicable to the automobile sector are lax as well as
irrational

Green IT Initiatives that we have taken

 New and Energy Efficient Datacenter with Power Management Features

 Virtualization and Server Consolidation

 TFTs in place of CRTs

 Reduction of Printers

 Video Conferencing / Collaboration Tools – to reduce travel

 Buying of Energy certified equipment – replacing old inefficient equipment

As next step, working on:

 Recycling & Disposal Policies

 Paper less Office

 Energy Audit

III. EMPLOYEE WELFARE

It is the responsibility of the management to ensure that employee welfare initiatives should not be put on the
back burner in the name of cutting costs. Being prudent in spending is the key here, with constant
communication to ward off adverse rumors and protect employee sentiments.

 To earn employee goodwill and loyalty, particularly at a time when the rate of attrition is at all time low.
“Team spirits and collaboration should be encouraged among employees. Initiatives like celebrating
success/achievements in small ways go a long way in raising the confidence and morale of the team.
 Re-skilling/cross-functional training of employees to keep them engaged.
 Counseling on managing their personal financial matters better-a necessity during the tough times.
 Celebration of success and achievements to boost employee morale, even if the celebrations are in small
scale.
 Felicitating the best performers—To reward the best performers in forms of accolades or prize
Money

 The Human Resource Department of the firm should constantly be in touch with the employees and
should keep a constant check on employee satisfaction viz. surveys. It should be more transparent in its
working (while doing the surveys).

 Also, the Human Resource Department should take a feedback from employees while they are leaving
the organization as to what they liked and what they disliked in the organization. Efforts should be made
to reduce the chances of biasness while giving the feedback.

 The Human Resource Department should work more on grievance redressal. For this, there should be
good communication existing between the top-level , middle-level and lower-level management.

 One of the important factors in the success of the organization is that the work environment must be
congenial enough to motivate workers to give whole-hearted co- operation. So, the work environment
should try to be improved constantly.
 Suggestion system can be a strong employee motivation method because in this the employees are given
the opportunity to say something, thereby increasing their sense of belonging in the organization
thereby, keeping them happy in the organization.

 The salary structure of the employees should be revised timely as per the performances so as to keep
them satisfied and constantly motivated for better performances.