BY,

HARISHA KOTAGIRI
SANIYA
MANSI GUPTA
ROHIT DHAWAN
Company Facts
Headquartered in Calcutta.
Bata sold over 60 million pairs per annum in
India and also exported its products.
Plants located in Batanagar (West Bengal),
Faridabad (Haryana), Bangalore (Karnataka),
Patna (Bihar) and Hosur (Tamil Nadu)
Distribution network of over 1,500 retail stores
and 27 wholesale depots.
Bata was Indias largest manufacturer and
marketer of footwear products.
Reasonably priced.
Sturdy footwear
Market valuation of Rs 3.7 billion
Employed over 15,000 people in its
manufacturing and sales operations.
Case Facts
Throughout its inception Bata had shown grow
thin profits, with the only loss shown in problems
was problems in 1995, but in 2000 Bata again
its downward which was mainly due to labor
problems.
At the center of all labor problems was the BMU
or Bata Mazdoor union in West Bengal.
Bata has always faced labor problems in its
major factories in West Bengal and Bangalore.

The company after making a huge loss in 1995 wanted to

save itself by bringing in W.K Weston who was an expert in
turning around performance. Weston brought in his own team
and changed the entire top management of the company. Weston
made major changes like overhauling operations and selling the
Bata headquarters in Calcutta to cover losses. The commercial
department was also shifted to Bata Nagar despite resistance
from trade unions.
Case Facts(Contd.,)
The management also retrenched 250 managers
as well as juniors and froze recruitment activities
while filling up gaps through internal transfers. What
added fuel to the fire between management and trade
unions was the assault on Weston and a senior officer
by members of the union. Although Bata had plants in
Faridabad, Bangalore, Patna, Hosur but most of the
output came from Batanagar factory in west Bengal
which was plagued by influences of political parties
which made negotiation with trade union very
difficult.
Assault case influenced the SVP to stop renewed investment
plans in Batanagar which brought inference from CPIM the ruling
party at the time. This brought violence which was more of
apolitical issue then labor. Meetings between the management
and union failed which led the factory to be shut down for several
months. A lockout also took place in Bangalore peenya factory in
2000 due to disputes regarding expiry of wage agreement.
Case Facts(Contd.,)

Lifting of the lockout also did not solve any problems as employees demanded that suspended colleagues be called
back. In 2004 Bata began a huge downsizing activity in West Bengal which it justified by stating that it was outsourcing its
finished products from china. This also led the workers to approach the government to intervene on their behalf.
Reasons For Strike
Downsizing
Change in management
Increase in working hours
Change in employment policy
Demand of union for workers participation in
management.
Wage hike
Inferences
The reasons for labor problems in Bata co. Ltd were as follows:

The management failed to make any meaningful communication with the workers
before making any decisions.
Bata had opened factories where trade unions and political parties had a very strong
and negative influence.
The interference of political parties ensures that the matters became violent and
through which such parties could satisfy their own agenda.
The company took drastic steps very frequently like lock down, retrenchments,
downsizing.
The top management only show the benefits of the company and not the problems of
workers.
The workers were heavily influenced by trade union and had no logic in decision
making.
Expatriates do not know about Indian culture and sensibilities of the Indian workers
and hence the decision was not very beneficial.
Measures Taken By Bata

In 1995,96 &98 Bipartite agreements to resolve labor

concerns
In 1999:
o Signing of three year wage agreement that
included fiscal benefits.
o Payment of Rs 4000/employee.
o Management agreed to include 10% of 400
contract labors
Recommendations

Bata should not give the charge to expatriate

manager as it brought the feeling of distrust
with the management.
Secondly, they shouldnt begin the downsizing
exercise instantaneously and rapidly. It should
be a slow exercise.
Instead of outsourcing 23 million pairs per year
from other industries, they should have started
manufacturing it in their own unit.