A CASE STUDY ON BATA

BY TRIDIB CHOUDHURY
Bata stores
HISTORY OF THE COMPANY
 The Company was originally incorporated as Bata
Shoe Company Limited on December 23, 1931 under
Indian Companies Act, 1913 for the purpose of
manufacturing and marketing of all types of
footwear, footwear components, leather and products
allied to the footwear trade.
 Subsequently, the Company changed its name to
.Bata Shoe Company Private Limited. on April 6, 1956
upon conversion into private company. The Company
changed its name from Bata Shoe Company Private
Limited to .Bata Shoe Company Limited upon
conversion to a public company on April 18, 1973.
 The name was once again changed to the current
name, i.e. Bata India Limited, on April 23, 1973.
 The Company was promoted by Leader A.G., St.

Moritz, Switzerland, a member of the

multinational Bata Shoe Organisation (BSO) with a
100% Equity Shareholding, and consequently, the
Company too is a member of the BSO.
 The BSO consists of independently run

companies operating in several countries across

the world. Bata Limited, Toronto, Canada acts as
the headquarters of BSO
 . Bata Shoe Organisation provides an
important interchange of new manufacturing
technologies, machine design, factory lay-out
plans advertising market forecasts, fashion
trends, modern marketing techniques, new
material testing and also information on the
most advanced machinery and technology for
production of shoes are made available to the
Bata group of companies, including Bata India
Limited.
CASE FACTS
 Throughout its inception Bata had shown
growth in profits, with the only loss shown in
1995, but in 2000 Bata again began its
downward phase which was mainly due to
labour problems.
 At the centre of all labour problems was the

BMU or Bata Mazdoor union in West Bengal.

 Bata has always faced labour 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.
 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 a
political issue then labour.
 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.
 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.

INFERENCES
The reasons for labour 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.
THANK
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