Synopsis: Communication For Productivity
Letters written to some 7500 Workers / Managers / Union Leaders, following a period of strike / Go slow / Murders (1979 - 1987), at Mumbai factory of Larsen & Toubro Ltd. This direct / open / honest communication led to a remarkable atmosphere of trust between Workers and Management, which, in turn, increased productivity at 3% per year (ave).
28 Jan 1987
Perhaps you know that the biggest share-holders (therefore, owners ?) of L&T are the Financial Institutions like,
- UTI (Unit Trust of India)
- LIC (Life Insurance Corporation)
- etc., etc.
Between them, I believe, they hold more than 35% of L&T shares and they nominate members on our Board of Directors. The Board takes policy-decisions and guides the destiny of the company.
Now, if bks (Bharatiya Kamgar Sena) were to be the largest share-holder of L&T, what kind of policy-decisions would they take with respect to L&T's
- Future operations ?
- Current Operations ?
I do not know !
I will not even guess !!
But I do know about a large trade-union federation (like our INTUC - AITUC, etc.) of Israel and the kind of decision it is taking in a company it OWNS. !!
Membership : 12 lakhs workers
"owned" by this Union
KOOR SIZE :
KOOR is the largest manufacturing industry in the Middle-East, with 250 subsidiaries and offices in 40 countires.
1985 Profit : Rs. 22.75 Crores
KOOR PRODUCTS :
Mayonnaise (like butter)
Pilotless Airplanes !
· 20% higher than other Israel companies
· One month bonus
1. Subsidised meal
2. Discount consumer co-operative stores
3. Loans (to members) for, child care college tuition
KOOR ACTIONS :
They did the same thing that capitalist-management do anywhere else in the World !
They hired a professional (M.B.A. - Business graduate) Manager - Mr. MEIR AMIT to set things right ! AMIT took following actions, fully supported by the Top Management -sorry. Top Union !
1. Closed money-losing motor-factory.
2. Cement Factory
(a)—Reduced manpower from 900 to 600 (33% less)
3. Added new products in -
(a) electronics (b) metals (c) chemicals
5. Located new-plants in unpopulated parts of Israel
6. What happened at the Subsidiary companies of KOOR ?
Name of Subsidiary : Company
Munition (Bullets/ Bombs)
1985: Rs. 742.3 crores
Growth Rate :
Lay-off 20 % 2000 workers
Lay-off 8% of 12600 workers
1. President AMIT said,
owner of KOOR).
2. When Union-leaders objected to manpower reduction, AMIT replied,
"I am a good socialist, and I am in favour of even (uniform) spread of wealth. But
first you have to have something to spread ! To spread "nothing" evenly
(uniformly) is no-big deal".
"We are in a business that must make profit. First comes profit, then welfare".
market. Jobs should take precedence over earnings".
And because Union is the sole owner of KOOR, you would think that they will announce a big dividend, for the shareholders (that is, for themselves). Afterall, who is
to stop them ?
No way !
KOOR management's (I mean Union's) policy is -
NO DIVIDENDS - NEVER !
Typical case of
"When a lover gets married and becomes a husband, he ceases to be a lover '."
Moral of the story (for the Government of India ?)
Do not be in a hurry to put a worker on the Board of Directors.