PRINCIPLES OF MANAGEMENT CIA

AT
MARUTHI SUZUKI

By
PREM KISHAN

REGISTER NUMBER
2127460

Under the Guidance of

PROF. KERANA ANAND

MBA PROGRAMME
SCHOOL OF BUSINESS AND MANAGEMENT
CHRIST (DEEMED TO BE UNIVERSITY), BANGALORE

SEPTMEBER 2021
INTRODUCTION
Management fosters collaboration among employees who undertake various roles and
responsibilities to achieve the organization's objectives. It is a system that promotes people to
be more productive and efficient. An organization's management will make strategic decisions
as needed with the support of well-defined management. A manager attends to his employees'
personal growth while simultaneously encouraging them to contribute their efforts to the
organization's overall goal.
With the support of four managerial functions – planning, organizing, leading, and controlling –
management develops an environment that encourages employee satisfaction and coordinated
operations. The practice of leadership is an art, but the knowledge that underpins it is a science.
To guide the firm and its people towards ultimate pleasure, every organization combines
numerous managerial theories or sciences into its operations.
MARUTI SUZUKI LTD
Maruti Suzuki India Limited, formerly Maruti Udyog Limited, is a New Delhi-based Indian
automobile manufacturer. It was founded in 1981 and was controlled by the Indian government
until it was sold to Suzuki Motor Corporation in 2003. Maruti Suzuki India Ltd. is India's leading
four-wheeler manufacturer. Maruti was founded in 1983 to motorize India. It was a cooperative
venture between the Indian government and Suzuki Motor Corporation of Japan. It swiftly
became India's largest compact car manufacturer, which it maintained until 2004. Suzuki initially
held tiny holdings in the company, while the Government of India had the majority of the shares.
Maruti Suzuki and its partners now employ over 75000 people. Gurgaon and Manesar, both
south of New Delhi, are home to a company's manufacturing plants.
Maruti was also involved in various enterprises, including the manufacture, sale, and purchase
of automobiles and automobile parts. Maruti's other interests included pre-owned automobile
sales, fleet management, and car financing
ORGANISATION STRUCTURE:
History of OS
India's automobile sector experienced a crisis in the 1980s. Low-capacity utilization and
productivity, as well as high costs and poor product quality, aided this. As a result, the
authorities opted to rely on the expertise of Japanese executives. Maruti LTD's management
was tasked with modernizing and organizing cost-effective, modern cars at affordable costs.
Cooperation with top enterprises in developed countries such as the United States, France,
Germany, and others was prioritized during production. Indian managers developed an effective
organizational system as a result of joint activities with specialists from the Japanese company
"Suzuki," the use of labor organization and production techniques from the best Japanese
companies, and taking into account the working conditions of the Indian company "Maruti LTD"
and the nature of human relations.
The main provisions were as follows:
The manager is the personification of the company's culture. He is ultimately responsible for the
team's capacity to generate an energetic environment. As a result, the manager must be an
industry leader.
The requirement for employees to have a creative and enthusiastic attitude toward their work is
adherence to the team's equality concept. To achieve this, management and employees should
wear the same corporate uniform, eat in the same dining room, drive company cars, work in the
same room (without separate offices), and so on.
A permanent committee is formed to share information (opinions) and address new concerns
regularly. It is made up of representatives from all of the company's departments and services.
If recommendations are generated due to the discussion, they are implemented by the
company's management.
Employees take part in creative and innovative activities, and "quality clubs" are formed.
Proposals are registered and considered, with one of two outcomes: implementation or
rejection. In the second situation, the reasons are communicated to the idea's creator.
Innovators and inventors are ethically and financially rewarded.
Despite the high level of competition in the global automotive market, Maruti LTD was able to
produce the first Maruti-Suzuki cars in less than two years and control 60% of the national car
market, and export to several countries as a result of compliance with all of these introductory
provisions of production organization and management.

CHARACTERISES:
Maruti Suzuki employees have the opportunity to express their thoughts and opinions during
group activities, and they can also communicate with other employees at various management
levels. This is due to the company's promotion of "openness" throughout the organization to
maintain transparency among levels. It has managers at every level who give their staff the best
possible support in order to boost their productivity and development. The following are the
major characteristics of Maruti Suzuki's organization:
Flat-structured organization:
Maruti Suzuki has a flat organizational structure that allows for direct communication and
information sharing between lower and upper management levels. Despite having a functional
and product-based structure, it allows employees to communicate with other parts of the
business, bypassing middle management. Maruti Suzuki's flat structure is a strength that aids
the company's diversification through innovative products. Because of its structure, Maruti
Suzuki has been able to boost staff morale and happiness, resulting in long-term success.
Function-based organization:
The term "function-based organization" refers to a structure in which resources and procedures
are organized by business function. Maruti Suzuki has such groups based on each of its
functional operations departments, headed by an executive manager. Maruti Suzuki's
operational management methods assist the company in carrying out strategic management
and communications at various levels and functional domains.
Product-based organization:
The term "product-based organization" describes a system in which products (goods or
services) are divided into distinct divisions based on their distinct characteristics. A product-
based structure allows Maruti to grow its corporate structure by creating competitive and
creative products that are tailored to future market demand and consumer preferences. Groups
working with the manufacturing of automobiles to improve access to organization information
are one of Maruti Suzuki's primary product-based initiatives.

Managerial Characteristics:
Maruti Suzuki, one of India's best automobile companies, adopted a flat organizational structure
to demonstrate that "managers don't matter" and "bureaucracy is a waste of time." It launched
the 'Project Envision' to investigate this phenomenon, and it came up with a list of qualities that
Maruti Suzuki feels make for good managers:
Managers must be good coaches
Empower teams
Create an inclusive environment, showing concern for success and well-being
Managers are productive and results-oriented
Managers are good communicators — listen and share information
Have a clear vision for the team
Support career development and discuss performance
Have the expertise to advise the team
Collaborate
Be a strong decision-maker
MANAGEMENT THEORIES
SCIENTIFIC MANAGEMENT THEORY
In 1911, Frederick Winslow Taylor proposed the Scientific Management philosophy, which
essentially states that "science, not rule of thumb; harmony, not discord; cooperation, not
individualism; maximum output, in place of restricted output; development of each man to his
efficiency and prosperity" (Taylor, Shop Management, 1911).
Taylor attempted to improve the working atmosphere between management and employees by
implementing the 'Principles of Scientific Management.' Companies that use Taylor's theory are
able to increase output and profit by ensuring that employees and management work together
effectively.

Scientific management principles are as follows:

Maruti Suzuki initially incorporated the scientific management theory into its operations, using a
standardized and systematic methodology that was appropriate to the extent of knowledge. The
structure of Maruti Suzuki's operations prevents it from working on a piece-rate basis. Maruti
Suzuki wanted to create a clear methodology for conducting activities, evaluating, and
improving the services it offers to its consumers. It earns revenue by analyzing the features of
the client's usage in order to present us with the best-in-class automobile experience.
Taylor's scientific management theory is no longer followed by Maruti Suzuki. The employees
are given the flexibility to work when they want. Because of Maruti Suzuki's flat organizational
structure, it is possible to provide a tailored working environment for its employees. Its highly
structured organization enables employees to collaborate with creativity and innovation in the
most effective way possible.
Maruti Suzuki now relies on Elton Mayo's Hawthorne experiment, which emphasizes that an
organization's personnel are its assets, capable of improving quality through productivity and
motivation. The Hawthorne study encourages people to be entrepreneurial by giving them the
freedom to do and implement what they think is best.
BEHAVIOUR THEORY
The Hawthorne effect is one of the most widely used management theories in organizations,
and it encourages the improvement of employees' behavior and performance. Elton Mayo,
Harvard Business School professor, introduced the Hawthorne study, which focused on an
organization's "human relation approach," which boosted productivity through social elements
such as morale, interpersonal interactions, and effective management.
Maruti Suzuki adopted the Hawthorne effect theory over Taylor's scientific management theory
to promote productivity through motivated personnel. The employees are given the flexibility to
work when they want. Its well-structured organizational framework allows employees to
collaborate with creativity and innovation in the most efficient way possible.
Human capital is valued by Maruti Suzuki as an asset to the company and is critical to its
growth. Maruti Suzuki's management cultivates interpersonal relations with its employees in
order to understand their requirements and to collaborate with them, as well as to support,
motivate, and assist them in being more successful and efficient. Employees are driven by
positive rewards and appreciations rather than monetary incentives, according to the company.
Maruti Suzuki offers a variety of benefits to its employees, including a comfortable work
atmosphere, an onsite eatery lounge, onsite childcare for parents, the ability to bring their kids
to work, resting areas, and more, in order to encourage positive attitudes, dedication, and
productivity. Maruti Suzuki also fosters team morale by facilitating group thinking exercises that
allow employees to communicate and debate ideas in order to improve teamwork. All of this is
made possible by the managers' commitment to their personnel, who believes in and respects
them. They also offer constructive feedback, which motivates employees to work harder and
produce more value for the organization.
Maruti Suzuki's workforce is incredibly diverse, bringing a wide range of cultures, concepts, and
knowledge to the company and to its consumers. Employees from various ethnic origins boost
creativity and promote a diverse range of ideas. The drawback of diversity among employees is
the competitiveness they bring to the workplace, which may have a negative impact on the
organization's development.
Based on Elton Mayo's Hawthorne Effect of the "human relation approach," Maruti Suzuki also
employs Frederick Herzberg's Two Factor Theory, in which two key elements – "hygiene
factors" and "motivation factors" - affect individuals from various cultural backgrounds. These
characteristics ensure that employees are happy and motivated to work well while still having
fun. Employees at Maruti Suzuki are motivated because their managers/organization give them
good working facilities, proper supervision and administration, appraisals, and recognition of
their ideas and performances.
Employees at Maruti Suzuki have the ultimate entrepreneurial freedom as a result of the
company's adaptation of two management theories based on the behavior and characteristics of
its employees. This means that they are free to work in the way they see fit while still meeting
the company's strategic goals. Employees are motivated to work in the type of workplace that
Maruti Suzuki has built for them because they feel respected and valued. Maruti Suzuki can
supply unique and creative products and services to its users because of its highly efficient
workforce.
CONTEMPORARY MANAGEMENT THEORY
Jay Barney, a modern management theorist born in 1954, introduced the concept of the
"resource-based view of the firm." Organizations can maintain their market presence by gaining
a "sustainable competitive advantage" over competitors. It can be done by identifying the
resources and capabilities that are valuable, rare, difficult to duplicate, and difficult to replace.
Managers who adopted Barney's theory were able to achieve the organizational objectives and
attain sustainable competitive advantage through strategic management. When implementing
strategic managerial goals, managers must consider two factors: 'resource capabilities' and
'operations of the firm.'
The VRIO framework was created by Jay Barney in 1991 to assist firms in identifying resources
that provide them a competitive advantage and assist in carrying out financial, human,
organizational, physical, and technical operations. This approach has four empirical indicators:
value, rarity, imitability, and organisation.
Maruti Suzuki is one of the few organisations in India to have achieved a long-term competitive
edge in human resource management. Maruti Suzuki's flat organisational structure allows for
autonomy, allowing it to achieve its strategic goals.
Maruti Suzuki's human capital database is used to hire and retain employees who may
contribute innovative products to the company, indirectly giving value to customers. The
employee database is extremely valuable to the organisation. No other organisation has
implemented data-driven staff management strategies. As a result, the human capital database
has a high market value and is exceedingly rare. Maruti Suzuki's personnel database
technology and algorithm are both expensive and difficult to replicate. Companies that want to
deploy such management systems must have the money to develop and maintain them
successfully because Maruti Suzuki has a team of highly skilled individuals who manage and
enhance the human capital database. This team of highly qualified individuals is well-organized
in order to maximize the value of this management system.
Maruti Suzuki has been able to use a large amount of employee data and transform it into a
working database management system using the VRIO model, which provides a completely
different approach to human capital data. This data is used by Maruti Suzuki's People
Operations team to discover essential features and qualities needed for a successful manager.
The VRIO model helps organizations capture competitive advantage and make better allocation
of company resources. Although the market is constantly changing, this model allows managers
to briefly identify the opportunities and threats of the company.
In order to achieve stronger economic performance in the market, Jay Barney also established
the concept of "competitive product management." Organizations evaluate the expense of
implementing strategies as well as the potential consequence when developing and
implementing strategies. Firms can achieve economic performance, according to Barney, when
the cost of adopting a strategy is less than the cost of creating an imperfectly competitive
market.
CONCLUSION
Maruti Suzuki features a flat organizational structure, which allows employees to communicate
directly with individuals at various managerial levels without having to go through middle
management. Such a framework stimulates employee inventiveness and creativity, ultimately
increasing the company's production. By integrating numerous managerial theories at various
levels of the business, the corporation is able to fulfill its objectives through this framework. The
organization began with the implementation of a traditional management strategy, which
supported a structured operational system that was standardized. Employees were assigned
tasks that did not allow for flexibility in responding to unexpected events (Eisenberg, Goodall Jr.,
and Trethewey, 2014, p. 71).
Maruti Suzuki had adopted Taylor's scientific management theory, a classical management
strategy that exhibited bureaucracy and fostered unequal treatment in the workplace. This
strategy was primarily concerned with organizational productivity and paid little attention to
personnel development.
Maruti Suzuki integrated Elton Mayo's Hawthorne effect into its managerial operations to
overcome such a rigid framework. Employees were now treated as assets of the organization
under this approach. Employees felt appreciated because they were recognized for their
performances and were provided with constructive feedback based on those accomplishments.
According to Maruti Suzuki's management, positive affirmations toward employees improved
productivity and efficiency in contributing to the organization's strategic goals.
Maruti Suzuki also incorporated a number of modern management ideas, including Frederick
Herzberg's "Two Factor Theory," Douglas McGregor's "Theory X and Theory Y," and Jay
Barney's "VRIO model" all of which encourage sustainable competitive advantage in the global
market. This company's modern philosophy has promoted principles like the significance of
inspiring employees, human resource management, employee efficiency, innovation &
creativity, and so on.
Maruti Suzuki's organizational efficiency is mostly based on its employees' motivation, creativity,
ambition, openness to learning, confidence, and candidness. It has been able to achieve its
goals and promote new ideas and innovations while adhering to all of the top management's
standards.
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