PRESENTED BYANUPAMA

Understanding the meaning of conflict

In 1981, GOI entered into four wheeler business through joint venture with Suzuki motors corporation a Japanese companyMaruti Udyog Limited (MUL) was established in February 1981competitors- the Hindustan Ambassador and Premier Padmini were both around 25 years out of date at that pointMaruti Suzuki offers a complete range of cars from entry level Maruti 800 and Alto, to hatchback Ritz, A-Star, Swift, Wagon-R , Estillo and sedans DZire, SX4, in the 'C' segment Maruti Eeco and Sports Utility vehicle Grand Vitara.A brief Overview of Maruti Udyog ltd.

Plan for modernization and expansion Appointment of Bhaskarudu as the managing directorDisinvestment of MULStake of SMC and GOI in Maruti udyog ltdFunding decisions

Maruti ltd-Government of IndiaSuzuki ltd

Relationship conflictProcess conflict

In August 1997, the Government of India appointed R.S.S.L.N. Bhaskarudu (Bhaskarudu) as the managing director (MD) of India's passenger car market leader Maruti Udyog Ltd. (MUL). The appointment was strongly opposed by Suzuki Motors Corporation (SMC) of Japan.

The GOI argued that as per the 1992 amendment in the GoI-SMC joint venture agreement, both the partners were entitled to nominate the MD for five years in turns, and there was no need for any consultation on it

SMC then lodged an arbitration petition against Bhaskarudu's appointment in the International Court of Arbitration. In June 1998, the new ruling Bharatiya Janata Party (BJP) government intervened into the issue and arranged for an out-of-court settlement between the parties

Signs of dispute surfaced in late 1993, when SMC proposed a Rs 2,200 crore expansion and modernization plan. The plan envisaged increasing the production by 1,00,000 vehicles to effectively meet the growing competition in the sector.

Though initially SMC was reluctant to go for a public issue, Bhargava managed to persuade it in 1995 for the same. However, things changed with K.Karunakaran (Karunakaran) becoming the Union minister for Industries in 1995.

In late 1999, following the recommendations of Disinvestment Commission, the GoI announced its decision to divest its stake in MUL.

However, subject to a clause in the MUL joint venture agreement, the GoI could not sell its stake without the written consent of SMC. This was expected to complicate the disvestment process of MUL.

the GoI announced its willingness to renounce its portion of the rights in favour of SMC during the rights issue. The negotiations between the GoI and SMC to fix the renunciation premium and the control premium were scheduled to begin in January 2002.

The above mentioned conflict will never occur again if both the companies Maruti India and Suzuki Japan make a policy that contains democratic theory of ethics .

This conflict could be resolved by making a policy in such a way where an executive post should be filled by conducting a lucky draw which should be crystal clear and transparent so every one should accept this way of job posting.

Another way of handling such a conflict is to form a neutral committee which is responsible for judging the problems faced by the organization and making ways to resolve those problems.

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