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September 3, 1997


Maruti faced problems introducing the Japanese management culture

R C Bhargava, former managing director of Maruti Udyog Limited, transformed the country's automobile industry and made Maruti cars ubiquitous on Indian roads. Having handed over charge on August 27 to become part-time chairman, he tells us the management secrets of Maruti's success:

When I joined Maruti Udyog in 1982, people were apprehensive about Maruti's success. The task assigned to us was to modernise automobiles, produce fuel efficient vehicles, and considerably push up the production of cars which had been stagnant.

Though it was a challenging task, the government support helped get Maruti off to a flying start. One of the things we decided when we finally zeroed in on Suzuki was that we would use Japanese experience and systems to get the quality and low-cost product into the market, because we thought it was the only way we could succeed.

Our success is firstly, I think, because we gave to the consumers in India a type of product which they really wanted and which they had not had for a long time. So in terms of customer needs, it fulfilled a real requirement.

The second thing we did was to make available a product with high quality and at prices quite affordable to the people who were buying the car. Over the years, we have continuously improved productivity. And we have ensured a high local content in the car, which has kept prices under control.

This productivity, quality, etc of Maruti is largely because of Japanese experience, Japanese systems, and their management culture. The whole purpose of Japanese management is to create conditions where every individual in the company feels he has to contribute something to it. He identifies himself with the company. He feels proud of belonging to the company.

Experience shows that if you can synergise the efforts of all members in the organisation and they work as a team, the result of that synergy is far better than the sum total of the individual's efforts. That's the team work concept. What we did in Maruti was to bring that about.

People feel proud to work for Maruti. They realise that it's Maruti's success that will ensure they move ahead in their careers. And that's what really happened.

Workers who started at Rs 300-400 a month are today earning as much as Rs 12,000-15,000. They clearly see the benefit of pushing the company ahead. The production incentives in Maruti are more than the salary. And unlike in other companies, it's not just the workers who get production incentives; our white-collar workers also share in the benefits of the production.

Our whole system of payments/incentives is based on what happens in terms of profits and productivity. And that's shared by the white-collar people. Therefore, the white-collar workers also have an interest in working as a team with the blue-collar workers. We really don't separate blue-collar and white-collar workers in that sense.

White-collar workers feel proud of working in Maruti Udyog because there is a scope for work. Here, you are not constrained; you are given responsibilities and have an opportunity to show individual initiative and drive. And there is the satisfaction that what you do produces results.

Above all, the Maruti tag provides a respectable identity to the white-collar workers. That itself is a source of satisfaction and pride for our managerial force.

The work environment for managers is as free and open as you can get. We do not have a rigid hierarchy nor do we have a very big pyramid. We have a very flat organisation. People have almost unlimited scope for making changes, giving ideas, suggestions under various schemes like suggestion scheme, quality circles, Kaizen, etc.

With this concept of participative management, there is tremendous scope for both white-collar and blue-collar workers to flourish and flower to their full potential.

Transparency is one of the ways of building a team. When everybody is in cabins, you don't know what is happening. It is so secretive. When everybody is out in the open, then everyone knows what the other is doing.

This open office culture introduced by Maruti also ensures easy accessibility and communication. Communication and participative management are the essential ingredients of Japanese management culture.

We try and communicate as much information as possible to everybody in the company through various forums. The 'open accessibility' culture has worked wonders in Maruti. The managers can walk up to my room and convey what they want to say.

Behind Maruti's success is another significant aspect of Japanese work culture -- parity among the employees. In Indian conditions, we initially did face problems introducing the Japanese management ethos in Maruti.

There was, especially among managers, a certain amount of reluctance and hesitation about wearing a uniform and eating in the same canteen, sitting in the open offices, and all that. It required the top management to spend time with these managers and convince them that this was the only way to do things.

It worked after some time. And as we went along, our managers realised that the concept not only produced results but also that it was not a bad thing to wear a uniform and eat in a common canteen with the workers.

Similarly, when we introduced the open office concept, initially there were some partitions. But gradually, those partitions were also removed and the office became a totally open hall. People got used to it and realised that it did not adversely affect them.

Like in any other organisation, the personal ambitions and career goals of engineers and managers, particularly middle-level managers, fit well in the Japanese scheme of things as practised in Maruti.

After all, in any organisation there is going to be a managing director, director, and general manager. And Maruti is no exception. Because when an individual joins a company, everybody wants to get to the top.

So, there is a personal ambition working. People who aspire to rise to higher posts get the opportunity to do so.

At Maruti, it is the managerial skill blended with the right technology that has paid dividends. We believe that managerial skill and technical proficiency are not mutually exclusive. You can have very good technology but if you don't have the right management systems, you will not be able to use the technology.

Equally, if you have good management, but don't have the right technology, you won't have the results either. So, you need to blend them in a way so to produce optimum results.

Some MNC automobile companies, particularly the Koreans, which have entered India have modelled their management culture on the lines of the Japanese to counter Maruti. Now we are striving to better our systems to meet this growing competition.

I am sure Maruti will continue to retain its leadership position in the booming car market.

As told to Vinod Behl

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