Company Overview

Honda Motor Co., Ltd. operates under the basic principles of "Respect for the Individual"
and "he hree !oys" " commonly e#pressed as he !oy of $uyin%, he !oy of &ellin%
and he !oy of Creatin%. "Respect for the Individual" reflects our desire to respect the
uni'ue character and ability of each individual person, trustin% each other as e'ual
partners in order to do our best in every situation. $ased on this, "he hree !oys"
e#presses our belief and desire that each person wor(in% in, or comin% into contact with
our company, directly or throu%h or products, should share a sense of )oy throu%h that
e#perience.
In line with these basic principles, since its establishment in *+,-, Honda has remained
on the leadin% ed%e by creatin% new value and providin% products of the hi%hest 'uality
at a reasonable price, for worldwide customer satisfaction. In addition, the Company has
conducted its activities with a commitment to protectin% the environment and enhancin%
safety in a mobile society.
he Company has %rown to become the world.s lar%est motorcycle manufacturer and one
of the leadin% automa(ers. /ith a %lobal networ( of 01*2 subsidiaries and affiliates
accounted for under the e'uity method, Honda develops, manufactures and mar(ets a
wide variety of products, ran%in% from small %eneral3purpose en%ines and scooters to
specialty sports cars, to earn the Company an outstandin% reputation from customers
worldwide.
Company Name: Honda Motor Co. Ltd.
Type: 4ublic
Industry: 5utomotive, 5viation
Established: &eptember 6,, *+,-
Founder: &oichiro Honda, a(eo 7u)isawa
Chairman: &atoshi 5o(i
President & CEO: a(anobu Ito
Capital: 8-9 billion :as of March ;*, 611+<
Sales :Results of fiscal 611-<=
Consolidated= 8*1,1**,6,* million
>nconsolidated= 8;,,1,,00, million
Total number of employees:
Consolidated= *-*,-?9 :as of March ;*, 611+<
>nconsolidated= 69,,?* :as of March ;*, 611+<
Consolidated subsidiaries: ;+9 subsidiaries :as of March ;*, 611+<
Chief Products: Motorcycles, automobiles, power products
&/O 5nalysis
Strengths
@#otic interior
>ni'ue aerodynamic shape
Aeveloped afterwards connected RBA with the latest technolo%y
Carious models tar%etin% assorted chump se%ments.
Honda 7CD is the abori%inal ammunition corpuscle car in the world
7uel efficient
Revolutionary en%ine technolo%y
Comfortable
Road %rip
Weaknesses
>se of Cuttin% bend technolo%y %ives acceleration to problems
Interior desi%n
Civic models could cause abashin% for the customer
Opportunities
Alliances
Fuel Eficiency
here is an advance of absorption in environmentally affable vehicles, and
HondaEFGs RBA focus a%ency that it is able3bodied assertive to capitaliHe on its
ability in this industry. Honda $orou%h has assorted models that alter in dischar%e
ratin%s, Honda borou%h ID JIC is termed as the Cleanest car on @arth as far as
centraliHed a%itation en%ines are concerned
In addition, Honda is a above amateur in the arisin% mar(ets li(e 4a(istan.
Car leasin% in 4a(istan is an befallin% for Honda borou%h to become added
widespread.
Carious borou%h models that ambition altered chump se%ments.
Threats
Second Movers
Risin% oil and raw actual prices in the apple baHaar can advance to decreased
appeal for automotive vehicles. In addition, added costs accept led to decreased
customer spendin% and the a%%ressive animosity is actual top in this industry.
Or%aniHational &tructure
Mar(etin% 5spect
Product:
Honda produces a ran%e of motorcycles, ran%in% from the 01 cubic centimeters class to
the *,-11 cubic centimeters class in cylinder displacement. he CompanyKs automobiles
use %asoline en%ines of three, four or si# cylinder, diesel en%ines and %asoline3electric
hybrid systems. Honda also offers alternative fuel3powered vehicles, such as natural %as,
ethanol and fuel cell vehicles. Honda offers a variety of financial services to its customers
and dealers throu%h finance subsidiaries. Honda manufactures a variety of power
products, includin% tillers, portable %enerators, %eneral3purpose en%ines and %rass cutters.
5utomobiles
Motorcycles
&cooters
5Cs
@lectrical Ienerators
/ater pumps
Lawn and Iarden @'uipments
illers
Outboard motors
Robotics
!ets
!et @n%ines
Product life cycle and market sements:
Mar(et se%mentation and strate%y for hi%h technolo%y products follows a typical pattern
called the Lechnolo%y 5doption Life CycleM. /hen new technolo%ies are introduced, a
typical mar(etin% strate%y focuses on attractin% the LInnovatorsM and subse'uently the
L@arly 5doptersM.
Innovators are defined as those who pursue products with new technolo%y a%%ressively,
consider technolo%y to be a central interest in their life, and buy because they en)oy
e#plorin% the new technolo%y features of a product.*- hey represent a small se%ment of
the total mar(et :appro#imately 6.0N*+< but they are critical to acceleratin% adoption in
later sta%es. hey validate a new productKs functionality and bear the burden of testin% for
other mar(et se%ments. Often the @arly 5dopter se%ment, an estimated *;.0N of the
mar(et, is pursued in con)unction with the Innovators. @arly adopters, perceived as
OvisionariesK in the mar(et, buy into new products early in the life cycle, are ima%inative
thin(ers who find it easy to envision and use new technolo%y, rely on their own intuition
in purchasin%, as opposed to dependin% on references from others, and are more tolerant
of bu%s or %litches in new products than the avera%e consumer.
5 member of the @arly Ma)ority is considered to be hi%hly practical and watches and
waits for proven technolo%y. 5s a pra%matist, this consumer is disinterested in fads, as
they want technolo%ical evolution to enhance e#istin% technolo%y. It is estimated that
;,N61 of the total mar(et for a %iven product falls in to the @arly Ma)ority se%ment.
7ollowin% them is the Late Ma)ority, ;,N of the potential buyers. La%%ards are at the tail
end of this distribution. Little attention is paid to this se%ment by mar(eters due to its
refusal to adopt or understand new technolo%ies.
Place: Honda conducts its operations in !apan and worldwide. he %eo%raphical
se%ments and their operations are %iven below.
!apan
!apan plays a (ey role as the center of Ilobal Honda, honin% Honda.s ed%e in advanced
technolo%y.
North "merica
HondaKs international plants lead the way in acceleratin% localiHation and e#pandin%
production.
South "merica
Honda further e#pands motorcycle production while stren%thenin% auto production
capacity.
Europe# $iddle East# "frica
Honda.s diesel car lineup e#pands as @urope
shows support for Honda brands.
China
$usiness steadily e#pands throu%hout the re%ion, becomin% more fle#ible to meet
diversifyin% needs.
"sia# Oceania
&i%nificant %rowth in 5sian mar(ets leads to localiHin% RBA and e#pandin% production
capacity.
Promotion:
Honda has many types of promotional activities. his leadin% automobile business
or%aniHation has come up with many %lobal ads. &ome of the latest %lobal advertisements
are %iven below.
$anaement and distribution:
Creatin consistent %uality &orld&ide
Puality, and nothin% but 'uality, is one essential element to winnin% and enhancin%
customer trust. /hat supports Honda 'ualityQ Honda depends on the passionate
dedication of Honda associates to provide customers with Honda 'uality. &pea(in% the
universal lan%ua%e of 'uality to earn the trust of customers in every country, Honda is
challen%in% itself to always ma(e products that surpass their
%reat e#pectations.
Strenthenin craftsmanship lobally
Honda be%an its first overseas motorcycle production in $el%ium in *+9;. In *+-6,
Honda became the first !apanese automa(er to produce passen%er cars :the 5ccord< in the
>.&. &ince then, Honda has established autonomous local operations around the world for
research and development, sales and mar(etin%, and production adapted to specific
re%ions. 5imin% for hi%hly efficient production, Honda ta(es an innovative approach to
improvin% its %lobal manufacturin% operations. 5 new motorcycle plant at the Rumamoto
7actory in !apan that adopted hi%hly efficient manufacturin% technolo%y now accounts
for a lar%e share of Honda motorcycle production in !apan. his plant has also ta(en over
the production of lar%e motorcycles from Honda.s Ohio plant in the >.&., thus further
stren%thenin% its leader function for Honda.s worldwide motorcycle production. 5t the
&uHu(a 7actory, Honda has e#tended its production line for electric motors, a (ey
component of hybrid systems, to be%in manufacturin% and populariHin% hybrid vehicles.
o (eep up with the ever3chan%in% mar(et, Honda continues to improve its
manufacturin% operations worldwide, with !apan servin% as the center of innovation.
Sales and Ser'ice:
Enhancin satisfaction &ith &armth and sincerity
$y creatin% products and services that hi%hli%ht the core values that ma(e Honda uni'ue,
Honda would li(e to provide its customers with )oy and e#citement beyond their
e#pectations. 5ccordin%ly, the Honda brand stays a step ahead of the diverse needs of
Honda customers, always offerin% new possibilities for richer, more rewardin% lifestyles.
In this way, Honda products enhance customers. en)oyment of life.
E(pandin customer satisfaction acti'ities
"Je#t time, tooS a Honda." he ultimate %oal of Honda sales activities worldwide is to
satisfy Honda customers so that they will continue to come bac( for more Honda 'uality
products. o ensure this, Honda has implemented a vi%orous Customer &atisfaction :C&<
pro%ram coverin% all of Honda sales companies. his pro%ram aims to enhance customer
satisfaction by stren%thenin% Honda attention to detail in product and service activities
throu%h all sta%es of sales, delivery, and after3sales service.
In March 6119, three different Honda sales channels in !apan were mer%ed under the
name of Honda Cars, providin% all Honda automotive brands throu%h a sin%le sales
networ( that is easier for customers to understand. Honda will continue to stren%then
sales and services tar%eted to re%ional needs and tailored to customers in each re%ion,
with an e#tensive product lineup and an enhanced communications infrastructure
connectin% Honda with its dealerships. hus, Honda can continue to enrich its customersK
lifestyles as only Honda can.
Here is a list of total >& sales in several years=
7inancial Hi%hli%hts
Honda Motor Co., Ltd., and &ubsidiaries :Tears ended March ;*<
Human Resource Mana%ement
Features of !apanese )uman *esource $anaement
he nature and functionin% of the !apanese industries and mana%ement has evo(ed considerable
amount of research interest, both within !apan and outside. &tartin% with O(ouchi :*+06< and
followed by 5bbe%len :*+0-< and Iwata :*+??<, the mana%ement features that were uni'ue to
!apan was established, thou%h the importance of the features varied accordin% to the researchersK
interpretation2. However, there was a consensus on the issue that the !apanese mana%ement
practices when compared to the /estern pattern of human resource mana%ement were
si%nificantly different. It is therefore important to hi%hli%ht the !apanese human resource
mana%ement practices before comparin% it to that of the Indian )oint venture.
+ifetime Employment
he term Llifetime employmentM is rather misleadin%. It necessarily means that an employee
when recruited is allowed to stay on with the company till the retirement a%e, which is dictated by
the %overnment. In the recent years this policy has come under scrutiny because of bul%in%
wor(forces and many !apanese companies are findin% ways to circumvent this policy.
*ecruitment
he !apanese companies recruit once a year. he employees are recruited at the entry level after
hi%h school or %raduation. hey are recruited not because of some special ability but rather
because they are found to be conducive to the company.s vision. Many !apanese companies %ive
a premium to the university from which the candidate has %raduated. 7urthermore, the family
bac(%round alon% with the teachers recommendation is also %iven due wei%ht because the
upbrin%in% of the candidate foretells his sense of responsibility and his dili%ence towards wor(.
Trainin
he !apanese companies have by principle followed the policy of lifetime employment. hus an
employee once recruited served the company till around the a%e of 91. his encoura%ed the
companies to develop trainin% pro%rams throu%h which the employee would be prepared to
handle new assi%nments as he %rew within the or%aniHation. he trainin% pro%rams can be
fundamentally divided into two %roups33 on3the3)ob trainin% :O!< and off3the3)ob trainin% :off3
!<. he !apanese companies also perfected the art of )ob rotation so that employees in the lower
run% and at the shop floor level became multi3s(illed.
Compensation
Reepin% in line with the promotion system the compensation pac(a%e of any !apanese company
%ives due importance to Lthe seniority criteriaM. 5 bonus system, which %ives bonus twice a year,
is appreciated by the employees and is also seen as an advanta%e for the company. he one time
retirement benefit is yet another feature of the !apanese compensation pac(a%e.
,nion System
he enterprise union is the formal platform for communication. he enterprise union functions at
two levels. he wa%e bar%ainin% (nown as Shunto or the sprin% offensive is an enterprise level
bar%ainin% for hi%her wa%es. 5t the enterprise level the union uses the )oint labour consultation
system. he )oint consultation system is a forum where the mana%ement and the union meet to
discuss a variety of issues and facilitate the dissemination of information about production, the
future plan of investment, overseas investment, the adoption of new technolo%y and manpower
ad)ustment. hrou%h )oint consultations, the union is able to participate in strate%ic decision
ma(in% as well as in functional decision3ma(in%.
)uman *esource $anaement of )onda Corportaion
+ifetime employment
Honda believes in %ivin% opportunities and the environment to an employee to %row and
prove hisUher ability. Honda does not have any lay3off policy, so the commitment of )ob
security from the employer e#ists. Retrenchment is unheard of and since even durin% the
recent downturn of the industry Honda continued to %row at - per cent, the need to loo(
at this issue did not arise. 5t Honda the labor turnover is around ,per cent and usually
limited to the a%e %roup of 603;0 years. he mana%ement is not unduly worried about this
low rate of turnover. Rather the head of the department of HRA at the Joida plant said
that operatin% within this constraint is appreciated because it is better than the situation
faced by their competitor. he collea%ues of the employee, who leaves the or%aniHation
amicably, %ive him a farewell party. his they do in their individual capacity but with the
full consensus of the company. &hop3floor employees as well as the mana%ers usually
leave the company for a better pay pac(et andUor a %ood desi%nation. 5s they leave the
company on %ood terms, they often come bac( and are ta(en bac( in appropriate
positions. he problem that the HRD faced was re%ardin% employees leavin% after a very
short stint :si# months to a year<. his they have been counteractin% throu%h ri%orous
induction trainin%. 5part from this, the company does not have any definite retention
policy. he HRA personnel at Honda feel that lon%3term retention of the employee,
thou%h desirable, is impossible, because Indians still place a much hi%her premium on
monetary benefits than wor( environment. he corporate HRA personnel contradicted
this statement and loo(ed at *per cent to , per cent turnover as a healthy phenomenon,
because it had ensured that fresh talent and (nowled%e had flowed in.
*ecruitment
he recruitment procedure for Honda can be split into two parts. he recruitment of the
mana%erial and the en%ineerin% recruits is handled directly by the head office with a
representative from the plant :either the Chief of the human resource department or the
Ieneral Mana%er< bein% present at the interview. However, shop floor level recruitment is
the sole concern of the plant. he Joida plant has ta(en considerable trouble to recruit
the ri%ht (ind of individual at the shop floor level. 5t this level the recruit is re'uired to
be a diploma holder from one of the Industrial rainin% Institutes :II<. he number of
years of e#perience at the time of recruitment determines the ran( at which the recruit is
placed. 5n e#amination is conducted to test the candidateKs )ob (nowled%e, simple IP and
aptitude. he e#amination is followed by an interview. he head of the HRA in the plant
heads the interview panel. he personnel mana%er at the Joida plant told the researcher
that apart from technical (nowled%e, he loo(ed for honesty and earnestness in the
candidates. Moreover, the inte%rity of the candidate, past record of alcoholism, vandalism
and involvement in union activities is %iven due consideration. he department has
therefore ventured into a time consumin% policy of bac(%round chec(s. 5 candidateKs
bac(%round is %iven a thorou%h chec(in% by contactin% his previous employer. 5n
employee is deputed from the plant to %o and meet the employees in his previous
company, as well as %athers information about him from nearby shops and tea stalls. his
en'uiry is done to double chec( the employerKs comments and find out %reater details
about the individualKs behavior. 7or instance, if the person is found to be an alcoholic, or
indul%in% in fi%htin% or vandalism, then he is re)ected since such attribute are not
desirable and is ta(en as lac( of inte%rity. Indian mana%ers loo( upon unions with distrust
and view employees indul%in% in unionism as a nuisance. he mana%ement supports this
sentiment and even re)ects a candidate with very %ood 'ualifications, if he is found to
have some past history of unionism.
he mana%erial and the en%ineerin% %raduates are %enerally recruited throu%h campus
recruitment thou%h sometimes these positions are also advertised. 5 data ban( of possible
candidates is also maintained. hou%h no specific institutes are focused upon, the
mana%ement trainees are usually recruited from 53%rade business schools and the
en%ineers from the re%ional en%ineerin% colle%es. hese candidates are e#pected to
satisfy the %eneral criteria of discipline, %ood manners and decorum. 5n interview is the
final decider and the company loo(s for a candidate who is fle#ible, has ori%inality in
thin(in% and not overly ambitious. &ince the turnover at the lower end of the mana%ement
cadre is rather hi%h, the company feels satisfied if the recruits put in a minimum of three
years. &ome recruits with %eneral post3%raduation de%rees are also bein% tried out
because of their hi%her retention rate. his set of recruits is the bac(bone of the
or%aniHation and provides the much3needed continuity at the lower3mana%erial level.
Recruitment at the middle and the senior level of mana%ement usually ta(es place to fill a
vacancy arisin% out of the departure of a mana%er. /hile selection from within is the
norm, sometime mana%ers from a rival company with a %ood reputation in the industry,
are also hired.
Trainin
Honda learned the importance of a systematic trainin% the hard way, when about ?0 per
cent of the first batch of en%ineerin% recruits parted ways within months of recruitment.
he top mana%ement then had a brain stormin% session about this problem and realiHed
that comprehensive induction trainin% was an essential prere'uisite for retention of the
recruits. he top mana%ement too( (een interest in this matter and with an able team
from the HRA department of the plant, set up an induction trainin% pro%ram for shop
floor wor(ers, supervisors, en%ineers, mana%ers and support staff. he induction pro%ram
for the en%ineers lasts a month. he first few days are spent in classroom lectures where
the companyKs philosophy, %oal and vision are discussed. he top mana%ers of the
company spend half a day with the recruits tal(in% about their e#perience. he entire
e#ercise is carried out to inculcate a sense of pride in the recruit for havin% )oined a
company that is a leader in the motorcycle business. 5fter this, the recruits spend several
days in production related departments. Aurin% this entire period they are as(ed to write
about the dayKs happenin%s V this provides a feedbac( on the trainin% pro%ram. he new
recruits in other mana%erial capacities also %o throu%h an induction module that is shorter
as they spend a lesser number of days in the production departments. &ince these
mana%ers are usually placed at the head'uarters, their trainin% is split between the Joida
plant and the head'uarters. heir induction trainin% in the plant starts with similar
classroom lectures about the company, followed by shop floor observation, and by
sessions with the heads of the various departments at the head'uarters. he central theme
in this pro%ram, once a%ain, is to ma(e the recruits feel proud of havin% made the choice
of )oinin% this company. his in turn is e#pected to lead to a hi%her level of motivation.
Aurin% the trainin% period these recruits write reports on their dayKs activities. 5t the end
of the trainin% period they are as(ed for su%%estions for improvin% the trainin% pro%ram.
Aurin% the induction period the newly3recruited en%ineers and mana%ers are thus %iven a
holistic view of the operation of the company.
@arlier, the shop floor wor(ers were inducted in batches of ;1 to ,1 wor(ers. he
induction pro%ram for this cate%ory is for two to three days. 5part from informin% the
wor(ers about the philosophy, %oals and vision, of the company, the emphasis is on the
five %olden rules. hese are= 4unctuality, Cleanliness :value of clean uniform and pride in
the uniform and cleanliness of the wor( area<, and Puality of wor( :the mana%er of the
'uality department said that he spent the day interactin% with the wor(ers to ma(e them
realiHe that the 'uality of the product lies in their hands<, Care and maintenance of the
machinery, Courteousness and helpfulness. he shop floor wor(ers are then trained on
fi#ed s(ills. 5part from s(ill3based trainin%, the company also has an on3%oin% trainin%
pro%ram for all employees for %eneral trainin% li(e 'uality control, team buildin%, safety
measures and stress mana%ement. hese are run by e#ternal consultin% a%encies under the
employee development pro%ram. Correspondence courses on !apanese mana%ement
techni'ues are provided to deservin% employees. he courses include 0&, PC, 4M at
wor(place, Gemba Kaizen and business process mana%ement. 7urther, employees are
selected for special courses offered by the International Labour Or%aniHation and the
5ssociation of Overseas echnical &cholars. he trainin% pro%ram of Honda &iel is
hi%hly focused towards the induction pro%ram. In fact, the success of the induction
pro%ram has motivated the HRA department to e#plore new styles and methodolo%ies of
trainin% 3 for all levels of employees so that they remain motivated to %ive their best to
the company. O! as part of enhancin% the s(ills of the wor(er is carried out on the shop
floor with the supervisor ta(in% the initiative. However, the development of multiple
s(ills is not prevalent in the company.
Compensation
Honda has structured its wa%es in accordance with the wa%es prevalent in the industry.
However, when 'uestioned, the mana%ement was not forthcomin% about the wa%e
structure. he mana%ement cadre has a minimum salary for each %rade and the actual
salary at the time of recruitment is ne%otiable. here is some disparity of salary between
the employees within the same ran( and this becomes considerable at the middle and the
top mana%ement level. $onus of 61 per cent on the basic pay is paid once a year and its
ceilin% is decided as per the Indian Industrial 5ct. he operators and supervisors are
covered under the @&I and Iroup 4ersonal 5ccident 4olicy. 5ll mana%ers are covered by
the Lmedi3claimM health insurance scheme. Covera%e is determined accordin% to ran(.
7rom the ran( of the assistant e#ecutive to the senior e#ecutive the medi3claim scheme is
for selfW from the assistant mana%er to the deputy mana%er for self and spouse, and for the
top mana%ers for self, spouse and children. Retirement for the operators and supervisors
is at the a%e of 00 and for mana%ers at the a%e of 0-. Retirement benefit is paid partly at
the time of retirement and partly over a time period. 5part from %ratuity, the employee
comes under a family pension scheme. 7urther, the company has a superannuation
scheme :offered by the Life Insurance Corporation< throu%h which the nominee also %ets
a pension till his death.
,nion system
hou%h in principle the mana%ement a%rees that a co3operative union can be an asset to
the company yet %iven the circumstances, they do not want to ris( encoura%in% unionism.
hey fear that once allowed to %row, the union will come in touch with the national level
unions that have political bac(in%. 5nd thus, there will be misuse of power. he
e#perience of another subsidiary of Honda in Iur%aon in &eptember 6110 has initiated
the Joida plant to hold assemblies with the shop floor wor(ers to %ive them assurance of
transparency on policies of employment educate them on the future of the or%aniHation
and %enerally develop a rapport with the wor(ers. It is but accepted that the mana%ement
will be vi%ilant enou%h to curb unionism.
$iblio%raphy
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http=UU(ninn.blo%spot.comU61*1U1;Uswot3analysis3of3honda.html
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http=UUwww.solsustainability.or%UdocumentsUcultivatin%mar(etsU5N61comparisonN61of
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Honda Corporation 5nnual report 611-, 611+