Contradictions of Employee Involvement in Organizational Change: The Transformation Efforts in NCJM, An Indian Industrial Cooperative

Contradictions of Employee Involvement

in Organizational Change

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Contradictions of Employee Involvement

in Organizational ChangeThe Transformation Efforts in NCJM,

An Indian Industrial Cooperative

George M. Kandathil

LEXINGTON BOOKS

Lanham • Boulder • New York • London

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Published by Lexington BooksAn imprint of The Rowman & Littlefield Publishing Group, Inc.4501 Forbes Boulevard, Suite 200, Lanham, Maryland 20706www.rowman.com

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Copyright © 2015 by Lexington Books

All rights reserved. No part of this book may be reproduced in any form or by any electronic or mechanical means, including information storage and retrieval systems, without written permission from the publisher, except by a reviewer who may quote passages in a review.

British Library Cataloguing in Publication Information Available

Library of Congress Cataloging-in-Publication Data

Kandathil, George. Contradictions of employee involvement in organizational change : the transformation efforts in NCJM, an Indian industrial cooperative / George M. Kandathil. pages cm Includes bibliographical references and index. ISBN 978-1-4985-0567-3 (cloth : alk. paper) — ISBN 978-1-4985-0568-0 (electronic) 1. Management—Employee participation—India—Case studies. 2. Producer cooperatives—India—Case studies. 3. Organizational change—India—Case studies. I. Title. HD5660.I5K36 2015 658.4'06--dc23 2015019966

™ The paper used in this publication meets the minimum requirements of American National Standard for Information Sciences—Permanence of Paper for Printed Library Materials, ANSI/NISO Z39.48-1992.

Printed in the United States of America

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Beloved Ammachi,

my mother;

You led me to the world of words and stories,showed me its wonders and wanderings.

And, I wrote these tales of contradictions for you,but had never dreamt

that you would leave this place for everbefore I completed it.

Now, you are far from me, yet close to my heart;listening to my heart throb and to the stories within it;

some of which I narrate hereand some which will just

remain within meunspoken.

Your loving son,

George

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vii

Contents

List of Tables xi

List of Figures xiii

List of Abbreviations xv

Acknowledgments xvii

Preface xix

1 A Researcher’s Odyssey 1

2 The Riddle of Employee Involvement in Organizational Transformation 9

The Struggles in Worker Takeover of Capitalist Companies 10Worker Cooperatives in India 14

Industrial Worker Cooperatives in India 14Industrial Worker Cooperatives in and around Kolkata,

West Bengal 17

3 The Research Process 21

Case Method of Study 22Selection of Organization 22Selection of Cases 24

Data Collection 25Data Analysis 29

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viii Contents

4 A Panoramic View of the Transformation Efforts in NCJM 31

From Family Ownership to Employee Ownership 31The Resource Base: Money, Infrastructure, and Manpower 32The Production Processes and the Products 34

Stages in the Cooperative Period 35The Formative Period (1987–1989) 35

Opening Pandora’s Box 35A Mosaic of Meetings, Agreements, and Schemes 36Formation of the Cooperative 38

The Disconcerted Period (1989–1991): The Shramik Samiti Movement and the Confused Cooperative 39

The New Central Jute Mills Shramik Samiti: A Disconcerted Offshoot 39

Reconstitution of the Board 41The Stable Period (1992–1994) 42The Turbulent Period (1994–1996) 43

The Spreading Wave 44The Eventual Spill 44

The New Leadership Period (1996–1998) 45The Changes in the Plant 45And Then the Eddies 46

5 Unpacking the Rubrics of Employee Involvement in the Transformation 49

Case 1: Disciplining: A Story of Undulating Enthusiasm 50Disciplinary Process during the Family Ownership (FO) Period 50Disciplinary Process during the Formative Period 51Disciplinary Process during the Shramik Samiti Period 56Disciplinary Process during the Stable Period 60Disciplinary Process during the Turbulent Period 65Disciplinary Process during the New Leadership Period 70

Case 2: The Plant Level Consultative Committee: The Emergence and Decline of a “Democratic Decision-making Forum” 74

Organizational Communication Channels during the FO Period 74Formation of the PLCC 75

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Contents ix

The Renaissance of the PLCC: The Stable Period 80The Turbulence and the Subsequent Demise of the PLCC 83

Case 3: The Workload Increase: An Experimentation with Regular Wages as the Work Motivator 89

Worker Involvement in Workload Change during the Stable Period 89

The Proposed Changes 90Implementation of the Changes 91The Downturn during the Turbulent Period 92The Revival: Worker Involvement in Workload Change during

the New Leadership Period 97The Implementation Process 98

Summary of Cases 101

6 The Tangled Tapestry of Information Sharing and Worker Expectation 105

The Contested Terrain of Information Sharing 105Information Sharing and Worker Involvement 107Management’s Expectation of Information Sharing 109Worker Expectation of Information Sharing 111Information Sharing—Expectation Loops for Management

and Workers 116The Evolving Nature of Worker Expectation 120Conclusion 123

7 Looking Backward, Looking Forward 125

Contradictions of EI in Organizational Change 125Practical Implications 130

Implications for Practice of Organizational Transformation 130Implications for CTW and Transformation of

Worker Cooperatives 132

Appendix A: Various Departments in the NCJM Plant (pre- and post-takeover) 139

Appendix B: Organizational Structure of NCJM after Takeover 141

Appendix C: Production Process Flow Chart (pre- and post-takeover) 143

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x Contents

Appendix D: Post-Takeover Productivity during 1987–1997 145

Appendix E: Strike History 147

Appendix F: Agreements during the Formation of the Cooperative 149

References 151

Index 159

About the Author 171

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xi

List of Tables

4.1 Share Holding Pattern 32

4.2 Critical Machines 33

4.3 Employee Categories 33

5.1 EI Variation in Disciplinary Processes 74

5.2 Variation in EI between 1987 and 1998 101

5.3 The Emerging Main Themes 102

6.1 The Main Factors Affecting Worker Involvement in Disciplinary Processes 114

6.2 The Main Factors Affecting Worker Involvement in the Plant Level Consultative Committee (PLCC) 115

6.3 The Main Factors Affecting Worker Involvement in Workload Change 115

6.4 The Main Factors Affecting Staff’s and Unions’ Involvement in Disciplinary Processes 122

7.1 Organizational Transformation: Ma nagement-controlled and directed vs. Collaborative 129

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xiii

List of Figures

6.1 Role of Information Sharing in Creating Employee Involvement 109

6.2 Contested Terrain of Information Sharing between Management and Workers at NCJM 116

6.3 The Relationship between Worker Expectation, Information Sharing, and Worker Trust 121

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xv

List of Abbreviations

AUAC All Union Advisory CommitteeBIFR Board for Industrial and Financial ReconstructionDA Dearness AllowanceEI Employee InvolvementESOP Employees’ Stock Ownership ProgramFIs Financial InstitutionsHOD Head of the DepartmentIDBI Industrial Development Bank of IndiaIRBI Industrial Reconstruction Board of IndiaINR Indian RupeesMLA Member of the Legislative AssemblyMMD Machine Manufacturing DivisionNCCCS New Central Credit Cooperative SocietyNCJM New Central Jute MillPF Provident FundPLCC Plant Level Consultative CommitteeVRS Voluntary Retirement Scheme

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xvii

Acknowledgments

This work has been primarily inspired by my guru, Professor Rahul Varman (Indian Institute of Technology, Kanpur). On a personal front, he has helped me to evolve continuously through a process of self -questioning. As part of my master’s degree thesis, he guided this work with passion and love. In this process, I learned to question my own and others’ thought processes. I realized that continuous critical self-reflection is the cornerstone of learning. This monograph is an expanded version of a scholarly article that Rahul and I had published together, with invaluable inputs and contributions from Manali Chakrabarti. My sincere thanks, Manali! Rahul was magnanimous enough to let me expand the article and publish it as a monograph. This also means that I am solely responsible for any mistake or error that might have crept into it.

Writing this monograph would not have been possible without the constant love and support of my family—my wife, Twinkle and my children, Maria, Varghese, and Mathew, my parents, my in-laws, particularly parents-in-law, and my siblings. They encouraged me to stay on course when I was going through difficulties including the loss of my mother.

My sincere thanks also to the employees at New Central Jute Mills, who gave me their time, feelings, thoughts, and friendship. My heartfelt thanks to a boy, whom I call “Prem” (which in English means “love”), and his family for the boundless trust they reposed in me. As you will see in this monograph, Prem was a crucial window into the lives of many people around me at NCJM. I cannot forget Mr. John and his family for all their help and for mak-ing my time there memorable. Unfortunately, because of the onset of certain tragic socioeconomic conditions, I lost touch with these families and have no way of tracing them. I pray they are well, wherever they are.

While I was writing this monograph, many of my colleagues at the Indian Institute of Management, Ahmedabad (IIMA) helped me, without perhaps

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xviii Acknowledgments

knowing the contributions they were making to this project. The list is fairly long but to mention a few, Professors Ankur Sarin, Joshy Jacob, Mohan Turaga, and Navdeep Mathur. Of them, Mohan deserves special mention, since he was a never-failing source of motivation for me. Similarly, Dhar-maraju Bathini, Dhaval Shah, and Priyanka Premapuri helped me with formatting and related issues. I also enjoyed the continuous support and en-couragement of freelancer and former editor of the institute, Dinyar Dastoor, who helped me particularly with the first chapter, while giving his opinion all through. There were times when I thought of scrapping this project, dur-ing which Dinyar kept my flagging spirits up, while Professor Sarosh Ku-ruvilla (Cornell University) provided me with the right direction. Similarly, Anuradha Shenoy helped in editing various chapters of the first draft of this monograph and was a constant source of encouragement. Also, my sincere thanks to Mrs. Jayashree Rammohan for the second round of editing.

Thanks especially to the anonymous reviewers of the early manuscript for valuable comments and suggestions, plus Scott Lutsky, Joseph Parry, Sarah Craig, and others at Rowman & Littlefield/Lexington Books for their patience and promptness in responding to my queries.

I also thank the research and publication unit and the management at IIMA for providing the necessary financial support. Overall, this monograph is not the accomplishment of one individual, but a collective effort. I consider it as a collage created using spot-paintings of various co-travelers who journeyed with me, imprinting their paintings in my memory. My pranaam or saluta-tions to each one of you!

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xix

Preface

Literature on organizational change, particularly organizational transforma-tion, suggests employee involvement (EI) as the key to successful change. Accordingly, organizations, such as capitalist corporations and worker co-operatives, in general, create various employee participatory mechanisms to elicit EI in organizational change. Such mechanisms predominantly include economic structures such as employee stock ownership programs and or-ganizational structures such as participatory decision-making forums, for example, various types of labor-management committees at different orga-nizational levels. Perhaps the best example of an organizational context that combines both these structures to a very large extent is worker cooperatives. Worker cooperatives, in general, distribute stock ownership equally to every employee, and have participatory decision-making structures instituted at all organizational levels, including the Board of Directors. The expressed intention behind these actions is to institutionalize workplace democracy. In the backdrop of the events that unfolded during 1987–1998 in one of the largest Indian industrial worker cooperatives, New Central Jute Mills, this monograph explores EI and its variations in the efforts to transform a fam-ily business that went bankrupt and was deserted by the family owners, into a sustainable worker cooperative.Using an in-depth longitudinal qualitative case study approach that involved six months of direct observation, in addi-tion to 105 face-to-face semi-structured interviews and other data collection techniques such as group discussion and document analysis, the author exam-ines how variation in the involvement of three key actors—workers, unions, and staff—in three organizational change efforts came about. These change efforts include changes in disciplinary processes, the institution and working of a plant level consultative committee, and changes in workload. The mono-graph also addresses how worker cooperatives, and perhaps formal business

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xx Preface

organizations at large, can sustain a high level of EI in organizational change. Based on case study analysis, the study shows that even in the best of precon-ditions—worker ownership and institution of participatory decision-making structures—EI is an evolving process replete with uncertainties. Further, building on the extant literature on EI in organizational transformation, par-ticularly in the context of worker cooperatives, the study shows that increased information sharing per se may not lead to increased EI in change. Rather, this study shows that it may depend on the nature of information being shared. This is because, for workers, information has a symbolic nature and informa-tion sharing is a signal of their trustworthiness in the assessment of those who are privy to the information. This means involvement is contingent upon the feeling that the information that workers consider critical at any point in time is being shared with them. However, what workers consider crucial (and thus a symbol of trust) changes over time as the nature and breadth of their involvement evolves. Thus, worker expectation as well as management expectation of information sharing is an evolving process. However, the evo-lution, as the study illustrates, has the potential to create a mismatch between the two expectations that might lead to contradictions in employee involve-ment. While for management, information sharing is an instrument in elicit-ing involvement, and thus management’s expectation of information sharing goes through an instrumental loop, for employees, information sharing is a matter of trust, and thus their expectation of information sharing goes through an institutional trust-based loop. Therefore, for sustaining high employee involvement, the organization should ideally institutionalize the trust -based loop and avoid engaging with the instrumental loop. Institutionalizing the trust-based loop requires sharing information that workers consider crucial in a sustained manner. Going beyond these specific insights, the monograph also discusses some general issues related to industrial worker cooperatives in India, and suggests some potential steps to address these issues, situating them in the context of the proposed reforms of labor laws in India.

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1

Chapter One

A Researcher’s Odyssey

It was in June of 1996 that I decided to visit New Central Jute Mills (NCJM) for conducting research on worker cooperatives. I had been interested in worker cooperatives as an alternative organizational mechanism. My academic coursework at the Indian Institute of Technology, Kanpur, had provided me with exposure to some successful Indian worker cooperatives, such as Kerala Dinesh Beedi (Isaac, Franke, and Raghavan 1998) and Indian Coffee House, as well as multinational worker cooperatives, such as Mon-dragon (Whyte and Whyte 1991). My coursework increased my curiosity and I wanted to understand more about the working of such cooperatives. Now, I was in search of a rich research site. I forayed into different worker coopera-tives, and NCJM was my last stop. At NCJM, I had the pleasure of meeting a young boy, named Prem, and his family. Their life stories not only moved me but also furthered my interest in cooperatives. From my conversations with the concerned authorities, I understood that I could acquire rich data that was also accessible. Hence, I decided to explore NCJM.

The journey to NCJM was interesting, to say the least. While the first leg from Kanpur (in Uttar Pradesh state) to Howrah (in Kolkata, previously called Calcutta, West Bengal state) was by the speedy broad-gauge rail, things changed radically after that—comprising slow passenger trains and a rickety bus over pot-holed roads. Still, the beautiful rural countryside, as we went in deeper was captivating and reminded me of my own home state of Kerala.

Upon reaching my final destination of an interior village called Budge-Budge and alighting, I found myself quite at sea, with no sign of the coop-erative in sight. Finally, after some searching, I came across a huge entrance gate and proceeded to enter it, luggage and all. After locating the office and offering my papers before the person concerned, I was shown to my room,

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2 Chapter One

following a bit of confusion that now seemed to have become part of the travels. (They mistook me for someone from Head Office!)

My quarters comprised a small room with a mattress and an attached bath with running water (something, I learned later, that was a luxury in these parts). Upon my requesting a table and chair, the coordinator promised to try and provide furniture, and then promptly disappeared for the rest of my study period there. As it was still not dark, I decided to explore the village market nearby, amidst the usual area of roadside vendors and intense interactions among buyers and sellers. A large range of goods lay on display, as buyers and sellers went through the mandatory ritual of bargaining, hoping to arrive at a win-win situation that usually underlies such rural transactions in India. On my way back, I passed by a workers’ colony that was located on the com-pany premises. Large clay pots were placed outside thatched roof huts as the womenfolk merrily chattered away amidst their chores. While most of the talk was in a language I could not understand, I was relieved to hear Hindi also being spoken—a language that was familiar to my ears. Further, there were discussions between some of the cooperative office staff and workers going on with an obvious display of hierarchy, showing that some of the original family-based business roots remained.

As it had begun to get dark and I had not eaten, I approached a Hindi-speaking individual to ask for directions to any eatery. He took me along with him to the NCJM canteen, where everybody ate together, although on differ-ent tables that in some way indicated their affiliation—there were separate tables for workers, staff members, and management. I was intrigued because the tables in themselves provided me with a mini-sociological framework for the layout of the organization.My guide turned out to be Babulal,1 an immigrant from Kanpur, who was delighted to find someone else from Uttar Pradesh (UP). He invited me home sometime when I was free, and we had dinner together and parted for the evening.

The next day, I went to the premises and met the Personnel Manager, the Mill Manager, and the Production Manager, and had a detailed talk with each of them. I also spent some time reading a few brochures on the organization’s history. Later, I bumped into Babulal again, who insisted that I should visit his home and introduced me to his family. His family comprised his wife and two sons Ramsharan (12) and Prem (9). The elder one enthusiastically asked me many questions about my work and myself, while the younger one seemed a bit withdrawn. Later, when the boys were sent to their room, the father told me his tragic tale of how they had come from UP, looking for good prospects. After the first few years, which were wonderful, life suddenly took a downward swing when the company’s owners deserted the organization and everyone’s fortunes plummeted. Suddenly, there were days when there was


A Researcher’s Odyssey 3

not even enough money to buy food. Eventually, the workers got together and formed a cooperative, forcing the government to be a partner, but even then, things were far from smooth.

In addition, Babulal and his wife were worried about their younger son, Prem, who showed very violent mood swings. They wondered if he was suffering from any psychological problem. Within the remote interiors that NCJM was located in, medical treatment was a difficult affair, and the fam-ily was a little reluctant to visit mental health professionals for fear of any stigma that might be attached to them or their son. While in present day In-dia, therapy for emotional or behavioral disorders is seen as relatively more normal, about a decade ago, there was still considerable stigma attached to it. My hosts were also deeply concerned about their son’s future. That night, when I left, I promised my hosts that I would spend some time with him and see if I could help in any way.

I learned that Prem was struggling with mathematics in school. I asked his parents if they would like me to provide him with some extra tutoring after school. Soon, Prem began coming to my place, and we began our series of interactions. Initially a little reticent, he soon opened up and we would go on small excursions around the local area. He would show me around the market and other local sites. Eventually, during these excursions, he began telling me about various aspects of his life. As it turned out, he went to a government school nearby. His family had talked about sending him to a pri-vate school later on, but right now that looked impossible, due to the family financial circumstances that were a direct result of the company’s financial circumstances. Prem used to move around, listening to people talk, picking up snippets from here and there. To my surprise, I was becoming increasingly aware that far from having psychological problems, Prem was an intelligent boy with a mind like a sponge. He had begun to absorb the depressing reality around his environment, which had in turn begun to affect him negatively.

He would overhear stories in the market, which people were visiting less frequently. The earlier enthusiasm that he had heard in his father’s voice had begun to wane. People could not seem to understand what was happening; there was uncertainty about wages and the cooperative’s future. He also saw stories regarding the current situation in newspapers, and tried to gauge their importance in his life, even as he witnessed different phases creating differ-ent moods in people. Some of the people had started bargaining or worse, begging; in extreme cases, there were suicides. Thus, as he struggled with the others, empathizing with their pain, and trying to figure out where all the pieces fit in the puzzle, he wondered about the implications of all of this for his family and how it was going to affect them. Though not a trained mental health professional, it became obvious to me that Prem was being affected


4 Chapter One

by a sense of depression and despair that emanated from his environment. Prem’s constant struggles to make sense of the changes that the cooperative and its stakeholders had been undergoing overlapped well with my research interest in worker cooperatives. The interactions with him triggered my curi-osity and formed the basis for the following questions in my mind:

• What were the changes that NCJM had undergone since its transformation from a family-owned business into a worker cooperative?

• What sense could one make of these changes and what insights did they generate?

Since I had visited other worker cooperatives in West Bengal (and in other parts of the country), I knew that many worker cooperatives were either struggling to survive or had gone out of business. Therefore, I was eager to figure out how cooperatives such as NCJM that had been facing numerous challenges could sustain employee enthusiasm. Such sustained enthusiasm, I hoped, would transform these cooperatives and organizations at large into more sustainable entities. More importantly, this also meant that families like Prem’s would be able to live a dignified life. Hence, I decided to focus more on the changes in employee involvement (EI) during the transformation of the cooperative.

Given my decision to focus on employee involvement, I further refined my research questions to the following:

1. Were there any variations in EI at NCJM during the employee ownership period?

2. If so, how did EI vary in NCJM during the employee ownership period?3. How did the EI variation come about?4. Under employee ownership, how did the management try to elicit EI in

the transformation of a family-owned enterprise into a worker cooperative, if they did so?

5. How can worker cooperatives maintain a high level of EI (as drawn from conclusions obtained from this study of NCJM)?

The above questions are important not only from the practical stand-point that I mentioned above, but from a theoretical angle as well. Scholars have consistently called for understanding the dynamics of organizational transformation or organizational change, particularly from an employee involvement perspective (Lewis 2014). With increasing world attention on India (Friedman 2006) and the search for alternative ways of organizing,



such as worker cooperatives (Artz and Kim 2011; Cheney 2002; Cheney et al. 2014; Stiglitz 2003), as opposed to a traditional way of organizing (i.e., limited ownership with structures of hierarchy such as owners, managers, workers with highly stratified work and pay), exploring the transformation of privately owned companies taken over by workers into worker coopera-tive is a necessity (Miera 2014). Therefore, exploring change dynamics in an Indian organization that struggles to survive with an alternative way of organizing is extremely important. Also, both practitioners and academicians consider maintaining a high level of employee involvement and sustaining it as a cornerstone of any successful change management effort (Oreg et al. 2011; Laing 2002). Yet, we do not know sufficiently how to make it possible, especially when the organization is struggling to survive, particularly in an Indian context (Bhatnagar et al. 2010) with an alternative form of organizing (Kandathil and Varman 2007). Thus, the central focus of this monograph is an attempt to develop an understanding of variations in employee involve-ment during the organizational transformation of a family-owned business into a worker cooperative, in the Indian context.

This study illustrates that employee involvement is an evolving process replete with uncertainties, even given the best of preconditions—employee ownership. Moreover, employing a qualitative longitudinal case study of a decade (1987–1997) of events in one of the largest Indian worker coopera-tives, NCJM, this study generates several insights that include the following:

1. Building on the extant literature on EI during organizational transforma-tion, particularly in the context of worker cooperatives, this study shows that increased information sharing per se may not lead to increased em-ployee involvement in change. Rather, EI may depend on the nature of information being shared, since, for workers, information has a symbolic nature and information sharing is a signal of their trustworthiness in the assessment of those who are privy to the information.

2. This means EI is contingent upon the feeling that the information that employees consider critical at any point in time is being shared with them.

3. However, what workers consider crucial (and thus, a symbol of trust) changes over time as the nature and breadth of their involvement evolves. Thus, worker expectation as well as management expectation of informa-tion sharing is an evolving process.

4. Therefore, for sustaining high EI, the organization should ideally institu-tionalize the trust-based loop and avoid engaging with the instrumental loop. Institutionalizing the trust-based loop requires sharing the informa-tion that workers consider crucial in a sustained manner.


6 Chapter One

Overall, the key distinction is that while for management, information sharing is an instrument in eliciting involvement, for employees, it is a mat-ter of trust. Through the course of this particular case of NCJM, I argue that EI variation arises from this mismatch in expectation of information sharing that may get perpetuated over time. While the management’s expectation of information sharing goes through an instrumental loop, worker expectation of information sharing goes through an institutional trust-based loop.

This monograph comprises seven chapters. The first (current chapter) pro-vides an introduction to my research study. The second chapter situates the study within the available literature in the field. The third chapter provides a brief overview of the research methodology that I adopted. The fourth chap-ter provides an overview of the periods that NCJM journeyed through and the various occurrences within those periods. The fifth chapter presents my analysis with respect to three cases: (1) disciplinary processes, (2) the Plant Level Consultative Committee (PLCC), and (3) workload change. In this chapter, I document both the changes within each case as well as the variation in employee involvement in each case. The sixth chapter provides an over-view of the analysis across the three cases. In this chapter, I tease out findings and commonalities from each case in the previous chapter, and integrate them into a broader rubric for a more comprehensive framework of understanding. The final chapter nests the broad findings of the case with the uniqueness and significance of my study, summarizing the patterns of contradictions that are presented in previous chapters. Tying these patterns back into the NCJM experience, I generate theoretical and practical insights for students of man-agement, professional managers, particularly change practitioners, and labor activists and union leaders who are interested in worker cooperatives and company takeover by workers. I incorporate the theoretical insights into the existing scholarship on organizational change to speculate on a relatively new perspective on organizational change—co-creating organizational change—and the implications of this study in the context of the proposed labor law reforms in India. The speculative nature, I hope, will jettison the reader into an imaginative space, encouraging her/him to raise informed questions and self-reflect critically, which I consider as a key to learning.

In broad terms, this study implies that regarding EI in organizational change, adequacy of information being shared (quantity of information) may be a sufficient condition while the quality of information being shared (in terms of criticality as perceived by employees, the main partner in co-con-structing change) is a necessary condition for eliciting employee involvement (Thomas et al. 2009). More importantly, in this context, perhaps we need to shift our focus from being predominantly on information to the process of information sharing; for example, consistency in sharing information that can



lead to institutionalization of trust-based ties, and in turn, sustained employee involvement. Going further, based on the NCJM case, the study proposes a collaborative approach to organizational change and discusses the implica-tions for the practice of organizational change in the context of both coop-eratives and capitalist organizations. The study also suggests implications for union leadership and in general for company takeovers by workers, and situates them in the context of proposed labor law reforms in India.

NOTE

1. To protect people’s identity, I used fictitious names.



9

Chapter Two

The Riddle of Employee Involvement in Organizational Transformation

As the world witnesses a series of economic crises that have been partly at-tributed to the monopoly capitalist or capital-owned mode of economic orga-nizing, worker cooperatives are again gaining increasing attention (Artz and Kim 2011). For example, worker cooperatives are proposed as viable alterna-tives (Cheney et al. 2014; Stiglitz 2003) that are expected to increase worker participation or employee involvement as they are based in shared capitalism (Kruse, Freeman, and Blasi 2010). In this regard, the United Nations declared 2012 as the International Year of Cooperatives;1 numerous discussions, conferences, and reports followed this announcement. Cuba adopted a coop-erative economy with labor-managed firms as the fulcrum of change (Vietta 2012), scholarly journals have special issues dedicated to exploring worker cooperatives (Cheney et al. 2014), and cooperativism is becoming the new buzzword among academic and practitioner communities (Alperovitz 2013; Webb and Cheney 2014). In this context, it is important to understand the struggles that worker cooperatives encountered in surviving the onslaught of a monopoly capitalist setup. Systematic examinations of such struggles, par-ticularly from a historical and actor-specific perspective, are largely missing from the existing scholarship on worker cooperatives (Cheney et al. 2014).

The broad objectives of this monograph are to fill this gap by creating a detailed narrative account of the struggles that three actors—workers, trade unions, and management—encountered during and after the takeover of an ailing capitalist firm that was deserted by its owners, and to draw insights from their experiences. Within these broad objectives, specific focus is on the involvement of these actors in transforming the ailing capitalist firm that they took over, into a sustainable worker cooperative. Thus, the processes during and after the takeover are conceptualized as organizational transformation. To understand the suitability and relevance of such a conceptualization and


10 Chapter Two

the importance of examining employee involvement (EI) in the transforma-tion efforts, we would need to explore the usual scenarios during and after worker takeover of bankrupt or ailing capitalist firms.

THE STRUGGLES IN WORKER TAKEOVER OF CAPITALIST COMPANIES

Workers’ takeover of bankrupt or ailing capitalist firms has not been in-frequent (see Wilson, Webster, and Vorberg-Rugh, 2013 for a historical review of the UK cooperative movement during the past 150 years). For example, Tuckman (2012) discusses the history of companies taken over by workers (CTWs) in Britain during the past fifty years. Similarly, Larra-bure et al. (2011) describe the new wave of cooperativism that is sweeping Latin America through CTW movements. More specifically, Cheney (2002) identifies the tension between the market-oriented and democracy-oriented values in one of the most widely studied and acclaimed worker coopera-tive chains, the Mondragon, in Spain. Along these lines, Bradley and Gelb (1982) had suggested a potential tension between an ideological reaction and a pragmatic approach in worker cooperatives, particularly in CTWs. As an ideological reaction, CTWs are seen as workers’ efforts toward building a socialistic democratic society. Hence, cooperative production is significant only to the extent that it functions as a stimulus to subvert and replace the prevailing capitalism and its capitalist modes of production (Batstone 1979). The cornerstone of this attempt is workplace democracy (Zwerdling 1984). Thus, as the Rochdale pioneers of the cooperative movement suggest and the International Cooperative Alliance (2005) recommends, in general, coopera-tive production, self-management, and solidarity have been considered as the salient features of CTWs (Meira 2014).

In contrast, the pragmatic approach examines CTW as a survival issue and workers’ attempts to save their jobs, and hence a “rational accommoda-tion” within the confines of the prevailing capitalist socioeconomic system (Bradley and Gelb 1982). It is argued, therefore, that CTWs are more aptly understood as a democracy of small capitalists. The salient features here are the shared economic ownership of workers and workers’ self-management (WSM). Going further, some scholars argue that the idealization of CTWs using the three previously mentioned features—cooperative production, self-management, and solidarity—is far from reality. Hence, they argue that CTWs can be better conceptualized as “a kind of creative process of workers in struggle against capitalism in a sort of creativity by necessity that shadows the system more than confronts it” (Meira 2014:714). In the


The Riddle of Employee Involvement in Organizational Transformation 11

context of solidary economy enterprises in Brazil, Meira (2014) thus argues that CTWs could be better contextualized as a spontaneous empirical con-struction of workers since they emerged as a defensive response to mass unemployment. In sum, CTWs and the post-takeover dynamics can then be better explored as creative transformation efforts of workers who struggle to keep their jobs while aspiring for self-management within the dominant capitalist modes of production.

In contrast to the notion of “democracy of small capitalists,” as indicated in the beginning, idealists consider CTWs as an institutionalized expression of solidary collectivity of workers (Batstone 1979). Thus, CTWs face more challenges than a startup worker cooperative would, since they have to carry the baggage of the capitalism in which they have been embedded for long. This baggage could constrain the cooperatives’ movement toward workplace democracy. This suggests a process of unlearning the previous organizing processes and structures and re-organizing them. In this respect, CTW in its post-takeover period is conceptualized as a transient phase. An eventual end of this phase could be either degeneration or regeneration. This means, to sur-vive, worker cooperatives will end up adopting the policies, structures, and forms of capitalist organizations (Cornforth 1995). Or, they will tide over the tensions between cooperativism and capitalism, retaining and regenerating a cooperative culture (Storey et al. 2014), by institutionalizing new democratic practices, norms, values, commitments, and identities, including the identities of employees (Cheney et al. 2014).

Whether we accept the degeneration thesis or regeneration thesis, both theses suggest that the dynamics in the CTWs after takeover involve work-ers’ attempt to significantly change the existing system, irrespective of its outcome: degeneration or regeneration. These dynamics can be considered as organizational transformation efforts since transformation broadly means changes in organizations that create significant departures from the status quo so that the changes appear discontinuous rather than incremental (Levy and Merry 1986; Nadler 1995).

How can we characterize and conceptualize such organizational transfor-mation in CTWs? Organizational transformations are in general characterized and conceptualized as life cycle oriented, teleological, evolutionary, and con-flictual or dialectical or a combination of these (Van de Ven and Poole 1995). I adopt mainly the conflictual or dialectical approach. This approach assumes that transformation occurs through the tensions between the opposites (called thesis and antithesis), which could potentially lead to a significantly new outcome. The new outcome, however, will have the features of the opposites (called synthesis). I adopt this approach because of the following consistently repeated arguments that we see in CTW literature. In a recent but short review


12 Chapter Two

of studies on worker cooperatives, Cheney et al. (2014) show that a central feature of the organizational change efforts in worker cooperatives typically assume a conflict, which is underexplored, between different values, goals, sectors, and constituencies such as worker-member-owner and temporary workers. More specifically, scholars have identified the tension between market/business value vs. democratic value (Cheney 2002) and business ownership practices vs. democratic practices (Schoening 2006). This tension leads to the development of cooperative entrepreneurialism (i.e., the synthe-sis) that allows them to engage in free enterprise, while also adhering to the cooperative values of equality and democracy. Similarly, Larrabure et al. (2011) characterize the new wave of cooperativism that manifested in CTWs in Latin America as essentially contested. In the Indian context, Varman and Chakra barti (2004) conceptualize organizational democracy in worker coop-eratives as an evolving reality of transformation that manifests through the interaction of contradictions over time. They show how the internal democ-racy of a worker cooperative evolved through a series of contradictions such as economic organization vs. social movement, efficiency vs. accountability, structure vs. culture, oligarchization vs. participation, control vs. initiative, and information sharing vs. information processing. In sum, these studies collectively suggest that to explore CTW dynamics, adopting a dialectical or conflictual conceptualization of organizational transformation is more fruitful than employing the alternatives. Yet, this approach is relatively less employed in this empirical context to explore organizational transformation.

One of the cornerstones that scholars have consistently identified for creat-ing and sustaining effective organizational transformation is the involvement or participation of organizational members in the efforts for transformation (O’Brien 2002; Pasmore and Fagans 1992). The notion of appreciative in-quiry, an organizational development (or transformation) technique, that is often recommended for creating effective organizational transformation, rests on eliciting and sustaining member participation in the transformation pro-cess (Fry 2002). Despite this central role of employee involvement in creating organizational transformation, this topic has been relatively less explored in a systematic way in the context of both capitalist firms and worker coopera-tives (Pencavel 2002; Pencavel 2013). Next, I discuss this issue in the context of worker cooperatives, particularly CTWs, which is the focus of this study.

In the case of CTW, the role of employee involvement (also called worker participation) in the transformation process is more crucial than in capitalist firms. While in capitalist firms employee involvement (EI) in transformation can be commanded by the employer representatives (e.g., the management), in CTWs the command-based approach is not only ideologically incongruent but also more likely to fail (Long 1982). Since workers typically consider



CTW as a worker cooperative, at least during its inception, the ideological incongruence occurs because of the principle of member participation (in ownership, decision-making, and firm governance) and participatory man-agement on which worker cooperatives are ideologically founded (Srinivas 1993). Hence, there is a stronger need for eliciting and sustaining EI in CTW transformations (Long 1982).

At the same time, it has been argued that among different forms of cooper-atives, worker cooperatives tend to elicit the highest level of worker participa-tion since all employees participate in ownership (contributing to capital) and day-to-day activities (contributing to labor) (Cheney et al. 2014). However, the illustrations of degeneration thesis (Long 1982) show that in the case of CTWs, wherein workers turned to worker ownership as a last resort to save their jobs, neither worker ownership nor the existing structures of worker participation would automatically lead to increased psychological ownership, and in turn, increased EI (Gunderson et al. 1995; Swidler 1979). The takeover may create expectations of greater worker voice in the functioning of the firm (French and Rosenstein 1984). However, the expectations may not actualize unless there are deliberate attempts to create and sustain new participatory mechanisms that are built on the principles of workplace democratization (Bernstein 1976; Zwerdling 1984). Such participatory mechanisms could motivate workers to participate, and the experience of participation could mo-tivate workers to continue participating and improve their skill to participate effectively (Pateman 1970; Rhodes and Steers 1981). While the institutional-ization of mechanisms might open up opportunities to participate and at best elicit initial involvement, it may not be sufficient to sustain the involvement (Long 1982). Hence, as Long (1982) argues, management’s willingness to integrate these mechanisms into the mainstream of organizational decision-making is necessary. This calls for management’s commitment to democratic processes, which ultimately means the ability to sense and the willingness to be open to new practices of democratic organizing (Etxagibel et al. 2012) that might pop up at the fringes of the transformation efforts. Thus, overall, elicit-ing, and more importantly, sustaining EI in the transformation efforts that go on in the CTW is complex and challenging for those who are involved.

The consistent call for identifying the features and experiences of spe-cific worker cooperatives, particularly CTWs, which are transferable to other cooperatives and other organizational forms (Pencavel 2013; Roths-child 2009) should be seen in the light of this challenge. One way to under-take this task is to develop theoretical models that help explain the failure of efforts to sustain EI, with suggestions to avoid such failures or to deal with them effectively. This monograph proposes such a theoretical model based on the analysis of employees’ struggles to transform a bankrupt capitalist


14 Chapter Two

firm into a sustainable industrial worker cooperative in the jute industry in India. To make sense of the analysis and the data, we need to have some broad understanding about Indian worker cooperatives, in particular, indus-trial worker cooperatives in India that emerged from the CTWs during the period of this study, 1980s–1990s.

WORKER COOPERATIVES IN INDIA

The cooperative movement in India is perhaps one of the largest coopera-tive movements in the world. 595,215 cooperative societies with a strength of 249.248 million members generate 1.22 million direct employments and 15.47 million self-employments (National Cooperative Union of India statistics in Indian Cooperative Movement at a Glance: 2007–2008). Yet, Indian worker cooperatives have been relatively less explored when com-pared to the acclaimed Mondragon experiments in Spain, Europe, or the producer and plywood cooperatives of the United States or the industrial cooperatives of the United Kingdom (Gulati et al. 2002). Next, I discuss the existing scholarship on Indian worker cooperatives, specifically, Indian industrial CTWs, which is the focus of this monograph. The discussion shows that although the role of EI was highlighted as one of the key issues in sustaining transformation efforts and creating effective worker coopera-tives, this was not systematically examined.

Industrial Worker Cooperatives in India

Approximately 13 percent of Indian cooperative workers (42,000 approxi-mately in terms of number of employees) work in industrial worker coopera-tives, although there are very few such cooperatives. This is just behind the cooperatives in the agricultural sector which employs 55 percent of Indian cooperative workers (Sapovadia and Patel 2013). One of the first documented cases of an Indian industrial worker cooperative dates back to the 1970s. In 1974, around 500 employees of Sonali Tea Estate in Jalpaigiri district in West Bengal got together and formed a worker cooperative. This was followed by a worker takeover of five tea plantations in Tripura, a state in northeastern India (Bhaumik 1992). Providing a brief historical description of various industrial worker cooperatives that were CTWs (including NCJM, the focal cooperative of this monograph), in a journal article, Sen (1995) points out the historical contexts in which they emerged. Most of these cooperatives were formed after the industrial units closed down or became unprofitable for their owners, typically due to mismanagement. These units were then labeled sick



industries with large dues pending. Hence, the formation of industrial worker cooperatives was mainly a response of the workers to massive job loss and an attempt to protect their job. The job loss needs to be understood in the context of the increasing unemployment that occurred during the 1970s and 1980s. Citing Misra (1990), Sen (ibid.) reports that between 1979 and 1986, the number of large sick units doubled from 345 to 689 and small sick units rose seven times from 16,805 to 1,28,687. In this context, as it happened in Brazil (Meira 2014), in India, there was a sudden spurt of CTW-type worker coop-eratives. Thus, this movement was a survival attempt to escape potential un-employment. Sen (ibid.) continues with thumbnail sketches of a few CTWs, suggesting that these takeovers should be examined from various angles such as a revival strategy, a workplace democracy experiment, and a viable alter-native to capitalist economic organizing. He concludes, implying the need for examining the role of EI in this experiment of workplace democratization.

This pattern of reporting—the focus on generating a few suggestions while providing a brief sketch of various CTWs or a single CTW was largely fol-lowed by most journal articles on Indian CTWs. For example, Bhowmik and Sarker (2002) examine various CTWs and other types of worker cooperatives in and around Kolkata, West Bengal, arguing that these cooperatives are capable of functioning as emancipatory (saving labor from the perils of capi-talist domination) alternative production systems. Similarly, Sapovadia and Patel (2013) list a number of critical success factors of worker cooperatives including CTWs while creating brief sketches of the functioning of a few Indian worker cooperatives. Both articles suggest sustaining EI in the gover-nance and day-to-day functioning of the CTWs as a crucial factor in creating successful worker cooperatives, without examining this point in detail.

A few other articles focus on a single CTW, typically identifying the strengths, weaknesses, and challenges that the cooperative faced or faces and the lessons that can be drawn from their past actions. For example, Ra-maswamy (1999) explores the reasons for the “failure” (stopping production in early 1997) of Kamani Tubes—a CTW that was formed with the help of trade unions and the Indian Supreme Court’s verdict that allowed workers to take over the bankrupt company. He identifies the main challenge and the main lesson from the failure of the Kamani Tube experiment—for survival CTWs need a high level of self-management and worker control that rest on sustained EI. Similarly, Bhowmik (1997) explores a CTW—a cooperative tea factory—in the state of Tamil Nadu, finding that the excessive legisla-tive control of the state bureaucracy over the functioning of the cooperative undermined the internal democratic functioning of the cooperative that had democratically elected boards of directors. Thus, he points to the need for exploring how internal democracy can be enhanced through facilitating EI in


16 Chapter Two

such processes. Gulati et al. (2002) examine the various factors that led to the continued success of Kerala Dinesh Beedi (KDB) in the past thirty years—a well-acclaimed success story in the history of Indian industrial worker coop-eratives and Indian CTWs. They underline the following point: to sustain the initial success of the cooperative, informal mechanisms that create a culture of member commitment to, and in turn their involvement in, the democratic processes of the cooperative are one of the most crucial factors. Thus, these studies collectively point to the need for a detailed and systematic exploration of EI in the efforts to transform the CTW into a democratically functioning sustainable worker cooperative.

Apart from these journal articles, there are a few scholarly books or re-search monographs on Indian industrial CTWs that were transformed into industrial worker cooperatives. Two books are prominent, and the authors have examined the takeover and post-takeover dynamics systematically. The first (chronologically) book explores arguably the third largest (in terms of number of employees) Indian industrial worker cooperative, Kamani Tubes in Mumbai and Bangalore (the second largest is NCJM, the focus of this monograph). The second one is on arguably the largest industrial worker cooperative in India, Kerala Dinesh Beedi (KDB) in Kerala. Adopting an Industrial Relations perspective, the work on Kamani Tubes provides a de-tailed analysis of the post-takeover organizational dynamics, with its focus confined to the role of unions in developing and sustaining worker control. Further, the focus on the internal dynamics of the cooperative including EI, particularly from workers’ and management’s angle, is limited to a few pages (pp. 128–146 out of 220 pages). The study highlights the following issues: (1) the apathy of the state and other financiers toward the unions that were depen-dent on them for rescuing the ailing firm, (2) the unions’ failure to develop appropriate leadership systems (instead of a few individual leaders), (3) the struggles and dilemmas that the CTWs had to face, such as the hostile market environment, (4) the tension between market orientation and workplace de-mocracy orientation, (5) the internal issue of efficiency in decision-making, and (6) the democratic decision-making process. In respect of the last point, the study points to the importance of understanding the issue of eliciting and sustaining broad-based EI in transformation and the role of information shar-ing between management and workers.

In contrast to the story of Kamani Tubes, the story of KDB—a government initiated takeover—is of continuous success. The authors (Isaac et al. 1998) trace the reasons for this success mainly to a combination of initial government funding but without any interference in the governance and decision-making of the firm, public support, a group of founders and a large chunk of workers who were ideologically committed to a worker cooperative (also see Gulati



et al. 2002). The monograph provides a thick description and an institutional analysis of the context in which KDB was transformed into a worker coopera-tive through government initiated and supported worker takeover. However, admittedly, the dynamics of KDB’s survival, particularly the internal dynamics, have been given a light touch. Although these scholars address this question in a subsequent journal article (Gulati et al. 2002), instead of identifying one or two crucially important factors and addressing them in depth, they focus on multiple success factors. However, these studies have consistently highlighted eliciting and sustaining EI in transformation as one of the most crucial factors in the case of CTWs, particularly in India that has historically been high in power distance and rooted in a relatively more hierarchical culture.

With this mix of theoretical and empirical backdrops, the following section focuses more on the immediate empirical context of this study—the industrial worker cooperatives in and around Kolkata.

Industrial Worker Cooperatives in and around Kolkata, West Bengal2

Kolkata (previously called Calcutta), located in the state of West Bengal, was historically a vibrant industrial metropolis that was famous for its jute mills. However, since the late 1960s, a number of large industrial units in and around Kolkata have either gone bankrupt or shut down (for historical details on industries, particularly the Jute industry, in West Bengal before 1960, see Chakrabarty 2000). The main reason according to the media and scholars was large-scale labor unrest in West Bengal during the 1960s and 1970s. During this period a coalition government led by the communist parties of India (mainly Communist Party [Marxist] and Communist Party of India) was repeatedly voted into the state government. Along with this, the Maoist movement and militant trade unionism emerged stronger. They created fear in the state as they started eliminating their class enemies, which included managers and industrialists. The consequent insecurity that prevailed in the socioeconomic environment of the state along with public perception of the communist party as anti-business led to a flight of capital to other states that were considered more peaceful. Some large industries, including family-owned businesses, shut their factories or moved out of the state. At the same time, many of these industries were badly managed and were limping, with dated technologies due to investors’ unwillingness to invest any further. Thus, these companies came to be considered as irretrievable sunk cost or “sick” industries by the investors, owners, and the government. The local media also portrayed these companies (in the wake of their closing down) as “sick,” creating a public perception of these companies as financially unviable.


18 Chapter Two

This public perception and the recurrence of factory closure continued to prevail in the 1980s. During this period, around 1,500 large industrial units shut their operations, leaving around 1.58 million workers employed in these and their ancillary units unemployed. This was repeated in the 1990s (the fo-cal period of this study). These repeated events jolted the local economies and consequently the social life of the people in the state. Meanwhile, many such bankrupt or ailing companies including jute mills of smaller size (compared to the size of NCJM: approximately 8,000 employees in 1990) were taken over by workers. For example, Bhowmik and Sarker (2002) briefly describe the case of the Jutes Spares Cooperative that was formed after employees (115 employees in 1987) took over an ailing capitalist company, Texwell Pri-vate Ltd. In this case, the unions in the company had started negotiating with the state government for a takeover after the company shut its operations. The government agreed to provide support. However, after the takeover, when the unions and the workers asked the government for a low-interest loan to en-able the cooperative to repay the existing bank loans, the government denied the request. Their experience with banks and other financial institutions was same. As explained next, this pattern of actions was typical during this period. In their interviews with me, the NJCM unions and the management claimed to have been aware of the pattern that was evolving around them in the late 1980s while they were contemplating a takeover.

The pattern, in detail, is as follows. When the owners give up their com-panies and shut operations, the unions, as worker representatives, negotiate with the state for a takeover by either the government or the employees. In all documented cases, the latter occurred. In many of these cases, the employee takeover was positioned as a prelude to a state takeover. Thus, it seems that both unions and employees considered employee takeover as an immediate action to resolve the issue of job loss and unemployment. The response of the state government for a takeover typically varied from a denial to initial sup-port, the former being the usual response after 1987, when the left coalition was elected for the third consecutive term. Thus, when NCJM approached the state government for a takeover, the government was all set to create policies for a business-friendly institutional environment that would attract more foreign investment. Differing significantly from its previous pro-labor stance, the government was about to come out with an assurance to investors that it would allay the fears of labor unrest, and to advise the unions to behave properly in their interactions with the management. Given that the dominant trade unions, such as CITU, were affiliated to the ruling political parties, such as the CPM, and that worker takeover typically took place with unions’ help, these changes had adversarial implications for the transformation of CTWs into worker cooperatives.



In short, CTWs had been facing immense difficulty in fundraising and gaining the support of the ruling government. This difficulty is not confined to India but has been encountered by CTWs in other parts of the world (Dos Santos 2006). However, in India, particularly in West Bengal, during this period, the level of difficulty seemed higher. This is partly because of the following factors: (a) change in the government’s stance toward employee takeover, which was supportive earlier; for example, the government func-tioned as a guarantor for employees to raise investment from FIs and banks, and (b) lenders’ and potential investors’ lack of confidence in the revival of the CTWs, which was partly due to the widespread “sick industry” percep-tion and lenders’ and potential investors’ doubts about the managerial abil-ity of workers to revive the company. The lack of confidence in the CTWs by the government, FIs (including banks), and other lenders intensified the usual performance pressure that operates during the first few years of the CTWs trying to prove their worth to investors, moneylenders, and the public (Srinivas 1993).

It is in this socio-political context that the employees of NCJM initiated their takeover of the company with the support of the unions that were af-filiated to political parties of apparently conflicting ideologies (e.g., Marxist parties that are considered left wing and Congress parties that are considered right wing). Therefore, it will be interesting to understand the following: (a) how did workers take over the ailing private company with the help of the multi-party, ideologically differing unions and the state government that had been reluctant to support worker takeover, and (b) how did this takeover bear upon the post-takeover dynamics, particularly the variation in EI, if it varied. The chapters that follow the next chapter, which is on research methodology, explore these issues.

NOTES

1. “International Year of Cooperatives 2012,” The United Nations, accessed De-cember 10, 2014. http://social.un.org/coopsyear/.

2. This part is largely based on Bhowmik and Sarker (2002).



21

Chapter Three

The Research Process

The issue of research method can only be resolved within the context of the research problem and its setting (Morgan and Smircich 1980). As stated in the previous chapter, the primary purpose of this study is to understand employee involvement in organizational transformation, particularly the transforma-tion of a company taken over by workers into a worker cooperative. As is evident from the review of literature on employee involvement presented in the previous chapter, changes in employee involvement in organizations, es-pecially after every employee gets an equal share of equity ownership, has not been sufficiently investigated. Therefore, the study followed an exploratory approach. “The purpose of exploratory investigation is to move towards a clearer understanding of how one’s problem is to be posed, to learn what are the appropriate data, to develop ideas of what are significant lines of relation, and to evolve one’s conceptual tools in the light of what one is learning about the area of life” (Blumer 1978:39).

Qualitative research is recommended for such exploratory studies (Van Maanen 1982). Once the theoretical framework is properly formed through exploratory studies, the research problem can become amenable to quan-titative studies. While the above characteristics distinguish the qualitative approach from the quantitative approach, different qualitative studies them-selves vary in terms of the different characteristics present. Hence, there is a need to describe the qualitative research design in detail, specifying the method of study that is being adopted.


22 Chapter Three

CASE METHOD OF STUDY

Within the qualitative approach, this study follows an in-depth case method of research. While comparing case studies to other research strategies, Yin (1994) puts forth three conditions for the use of appropriate research strategy: (1) the type of research question posed, (2) the extent of control an investigator has over actual behavioral events, and (3) the degree of focus on contemporary as opposed to historical issues. Subsequently, Yin (1994:24) characterizes case study as “an empirical inquiry that (a) investi-gates a contemporary phenomenon within its real-life context; when (b) the boundaries between phenomenon and context are not clearly evident; and in which (c) multiple sources of evidence are used.” He further adds that “a case study is best used when a ‘how’ or ‘why’ question is being asked about a contemporary set of events, over which the investigator has little or no control” (ibid., 20).

Each of the above characteristics of the case method matches the research problem of this study. This study explores employee involvement in the transformation of a company taken over by workers, a phenomenon that is contemporary. Since I am interested in the contextual evolution of employee involvement, I need to investigate the transformation in its real-life context. I conduct this exploration by asking how and why the contextual variations in employee involvement occurred. Besides this, since the study relies heavily upon the memory and experiences of people, the researcher has no control over the events.

Within the case study method, I adopted a single exploratory case study ap-proach since it helps generate deeper insights into relatively less explored but complex social problems (Yin 1994). This method involves careful selection of the research site or the organization to be explored, cases (specific issues within the broad issue of employee involvement in organizational transforma-tion) to be focused on, and data sources that give rich data. I briefly explain each of these next.

Selection of Organization

The first step was the selection of an appropriate organization. The basis of the appropriateness was that it should fit well with the research objec-tives. This means cases are chosen for theoretical reasons (Eisenhardt 1989). Hence, the choice of an appropriate organization was based on the following processes and considerations.


The Research Process 23

1. Scholarship on employee involvement in Indian employee owned or-ganizations is scant, as discussed in chapter 2. I decided to focus on manufacturing organizations with a minimum degree of automation since employee involvement is a key factor that directly affects the business of such organizations.

2. While going through the literature to find Indian employee owned orga-nizations that are well-known for changes in employee involvement after the takeover, I inquired about such organizations through the Center for Workers’ Management, New Delhi. My preliminary inquiries and litera-ture survey yielded the following insights about employee involvement in Indian employee-owned companies.

a. Most of these companies were small-scale industries with a small num-ber of employees (varying from 50 to 500) and were in crisis, facing employee strikes due to financial or legal crises.

b. Due to the above-mentioned troubles, many of these were either closed or were on the brink of closure. My visits to different employee-owned companies in and around Kolkata (the nearest place where a maximum number of employee-owned companies were situated) verified the above-mentioned points.

c. Large companies looked more attractive to generate broader implica-tions of EI since EI in organizational change in large companies is much more challenging than in small companies.

3. Subsequently, I decided to conduct the study in a large employee-owned manufacturing company and used the following criteria to select the organization:

a. The organization with a history of at least three–four years after em-ployee takeover. (This I hoped would leave the time required for the organization to settle itself after the employee takeover.)

b. Adequate documentation about the functioning of different commit-tees, board, and other organizational mechanisms in the organization.

4. I found NCJM, which I finally studied, fulfilling all the above-mentioned criteria except the last. Documentation was poor and sometimes unavail-able, although compared to other companies it had more documentation. I could obtain permission to carry out the study in this organization with-out much hassle, and the top management offered liberal access to data. Hence, I decided to carry out an in-depth study of the changes in employee involvement at NCJM.

Selection of research site is typically followed by the selection of cases to be explored, which I explain next.


24 Chapter Three

Selection of Cases

The selection of the cases or issues was based on the following process:

1. Before entering the organization, I tried to collect publicly available docu-ments or articles about the organization, particularly about the changes in employee involvement. I ended up with a few brochures and some research articles where NCJM was also mentioned among other names. Not much information was available in the public domain. During the visit to gain access to the organization, I collected some more documents that gave me background information such as organizational hierarchy, number of employees, production flow chart, and so on.

2. After entering the organization, I spent time in understanding the work-ing of the plant and its different departments and the local sociopolitical contexts in which the organization operated. I focused relatively more on the production department since it was the most important department in a manufacturing organization and it employed the maximum number of workers. I observed the working of the departments and assimilated it with the help of the staff as well as the workers who were working in the concerned departments. Meanwhile, I started holding informal discussions and unstructured interviews with staff, particularly those who had direct interactions with workers on the shop floor and union representatives, and workers. I also spoke to a few managers.

3. I quickly realized that the members of the organization were enthusias-tic about discussing their understanding about the changes in employee involvement that they considered positive. However, they were reluctant to share more information about changes that they evaluated negatively. Another problem was their lack of familiarity with this sort of ethno-graphic research. However, some workers were familiar with technical research since they had participated in giving inputs for technical research on the quality of jute, carpet production, and so on. Interestingly, because of this experience, they extended due respect, cooperation, and care for this study, and they seemed to exhibit an attitude that they should give correct information to researchers. While this was generally true, some of the workers were initially afraid of sharing information, as they did not consider this research as strictly technical. However, since I had the privilege of staying in the plant premises along with other employees (about 80 percent of the employees, particularly workers), I could gradu-ally develop a good rapport with them—participating in their activities, teaching their children, and dining with them. Through the continuous conversations, discussions, and interviews with the employees, I identified a few important issues that could potentially help me understand employee



involvement in organizational transformation. The next step was to select the most important issues or cases from this list.

4. The most important consideration for selecting cases was that they were substantive enough to reflect the complexities and fine-grained aspects of the changes in employee involvement. Trivial issues such as the involve-ment of a group of workers in setting up a new machine in a particular department once a year or the involvement of some employees in decid-ing the production target in the production department would not map the long-term variations and subtleties in employee involvement. I identified the following characteristics for a case to be considered good enough for further exploration:

a. It should span the whole decade if possible.b. It should significantly affect all the groups under the study.c. It should have a significant bearing on the business of the company.d. It should be sensitive to the variations in employee involvement, par-

ticularly of workers.e. If possible, it should have been decided and implemented by any of

the groups under study or the group/s must have been given the op-portunity to influence it either at the decision-making stage or at its implementation stage.

f. If possible, similar issues should have been taken up by the organiza-tion during the period of family ownership (for gaining a comparative understanding).

I ended up with three cases. All three cases involved each group under the study, spanned the decade under study (except one), and had precedents (except one) during the family ownership period. The next task was to collect detailed and specific data.

DATA COLLECTION

As mentioned earlier, the first task in data collection was to understand, from a theoretical viewpoint, the working of employee-owned organizations and companies taken over by workers. For this purpose, I relied on the existing literature. I paid particular attention to employee participation and its role in the decision-making process. Subsequently, a list of areas “to look for” was prepared. Broad questions were framed around these themes before entering the research site.

After entering the site, as mentioned earlier, I tried to understand the or-ganizational context of employee involvement. Informed by my literature


26 Chapter Three

review, I specifically focused on (1) information about the organization: its history, working, policies, practices, and so on, and (2) changes in the role of unions and in the relations of unions with workers and management.

Subsequently, I collected some general information about the two cases, namely, disciplining and workload change during the family ownership period. For this purpose, I went through some archives. For the third case, “plant level consultative committee,” through conversations with employees and by reading some company documents, I collected information about the history of working committees in the plant during the family ownership. This made me familiar with the cases to be studied, especially the terms that people were used to. In addition, it gave me some insights into the historical context of the issues around employee involvement. Subsequently, I started collecting data more specifically on the three cases that I had identified.

The primary means of detailed and specific data collection was employee interviews. Initially, I used the following criteria to select individuals for interview.

1. Work experience (Although I focused relatively more on experienced em-ployees, to generate different perspectives, I interviewed less experienced employees also.)

2. Department (As mentioned previously, I focused relatively more on the production department and on individuals who directly interacted with workers. However, I interviewed others also to understand the issues from different perspectives.)

3. Grade and status hierarchy in the company (I included individuals from different grades and positions. The literature suggests that worker coop-eratives that are formed from the remnants of authority-based hierarchical organizations, for example, NCJM, may retain their hierarchical culture. The implication is that depending on the position in the organization’s sta-tus hierarchy, individuals at different levels may have different views on employee involvement and may exhibit different patterns of participatory behavior. Therefore, I included interviewees across levels.)

4. Familiarity with the particular issue being explored5. Opinion of some employees and outsiders about whom to interview

A short preliminary interview was held with all those who were identified within this step. Depending on this initial round of interviews, I prepared another shortlist. Meanwhile, I identified some key informants, both inside and outside the cooperative, ranging in age from children (e.g., Prem) to aged people. Children often gave a good description of incidents that happened in the company. These descriptions served as hints for framing better questions



during the interviews with the employees. I identified two key informants from each group and two from outside. Among informants from the staff, one belonged to the lower rung while the other belonged to a higher level. From the union, the two individuals belonged to opposite political parties. From the workers, one informant was a political worker while the other was a non-political worker. From outside the cooperative, one was Prem and the second was a middle-aged local man. As the case study method suggests, I expected that this variety of people and their perspectives would help generate a more holistic understanding of issues. However, the choice of key informants was mainly incidental, although their background and familiarity with the orga-nization and the issues that I chose to investigate were compelling reasons to select them. Thus, the sampling of both informants and interviewees is largely convenience-based. I tried to minimize the bias associated with this sampling method through crosschecking and data triangulation. Still, there is a possibility of bias, particularly favoring worker views over others’.

In-depth and open-ended interviews of the selected individuals followed. This was the main technique for data collection. Most of the interviews were unstructured or semi-structured. However, in some cases, particularly in staff interviews, I provided an outline of questions beforehand for easy and time saving initiation. However, as the interviews progressed, depending on the interviewee’s responses, I often changed the questions. In semi-structured interviews, I had a checklist of important aspects to be covered in almost all interviews. In many interviews, I jotted down cryptic notes. However, in some cases, I observed that the interviewees became conscious and guarded when I started taking notes during the interview. In such cases, I stopped taking notes. In most cases, I made extensive notes immediately after the interview was over. In addition, as mentioned previously, I noticed that in some cases, the interviewees were less comfortable while discussing the fall in employee involvement and why it had happened. Therefore, I adopted a strategy of probing the fall only after I had developed a good rapport with the interviewees and made them comfortable.

To obtain unions’ views, I interviewed its president and/or secretaries and one union member. Since I was on good terms with the convener of the all-union meeting (an individual who was highly respected among unions, staff, and workers), he invited me to all the union meetings, introduced me to dif-ferent union officials, and gave me a chance to talk in the meetings. In addi-tion, I could also attend the meeting that the President of NCJM held, which a large number of workers attended.

In total, I interviewed 35 individuals from the unions’ side, 20 staff, 50 workers, and 10 managers including the MD and the President (see table 3 for employee categories). Compared to the workers, I had to interview a higher


28 Chapter Three

number and proportion of the rest of the employees since interview was the main instrument through which I could collect the views of the rest. In the case of workers, I could utilize other techniques such as group discussions and participation in informal meetings, but managers and staff members were more comfortable with interviews. Some interviews took about four hours, in two sessions, particularly those with workers and union officials. Most interviews with workers took place at their residence. I held union members’ interviews at either their residence or the plant or the union office, as per their choice. Similarly, staff interviews were held either at their residence or at the company club or at the plant at their convenience.

I transcribed the interviews into field notes. These field notes formed the basic raw data for each case (Miles and Huberman 1994; Yin 1994). In many cases, I conducted repeat interviews to fill the gap or clarify doubts. I also conducted additional interviews to crosscheck different versions of what actually happened. Some of the individuals concerned with the cases studied had retired from the organization. Fortuitously, I could interview them be-cause most of them were staying either close to the Mills or with their rela-tives in the plant premises.

During the interview, I faced certain difficulties, as I was not familiar with the local language. However, fortunately, most workers were from Bihar and UP. Sometimes, during the group discussions, when I could not understand some points, those who knew Hindi (which I understood) helped me. This problem of language actually gave me a distinct advantage. I could ask the in-terviewee to rephrase and repeat her/his response by pretending to be less fa-miliar with the regional language or Hindi. Similarly, I could easily rephrase the questions, when I felt that the interviewee needed simpler questions than the ones originally phrased. However, group discussions might have an in-herent bias due to social conformity. To mitigate this bias, after the group discussion, I randomly picked a few workers who participated in the discus-sions and interviewed them separately, checking for any disparity between the views they expressed in public and the views that they held privately. In addition, I randomly interviewed a few workers who had expressed views that were significantly different from the majority’s during group discussions. These attempts did not yield significantly different insights.

Besides group discussions and interviews, I conducted a meeting of around 12 workers (from different departments) in the workers’ colony. In addition to all these, I also collected data through the following ways of non-participant observations.

1. Casual listening: I generally listened to whatever the employees talked about during lunch hour at the mess, in the canteen, and in the local mar-



kets. I used to stand near the snack bar and chat with workers. I frequented the local markets with Prem.

2. Listening and conversing: I listened and sometimes conversed on the lawn, where employees spent their leisure time, two to three times a day, usually spending 15–20 minutes each time.

3. Committee meetings and public meetings: As explained earlier.4. Visit to employees’ residence or quarters.5. I moved around in different departments, observing the involvement of

different employees, their working relations, working style, style of com-munication, etc.

In sum, I used a variety of data sources and data collection techniques that helped me generate trustworthy data and triangulate them effectively. Case methodology suggests that such data triangulation when combined with prolonged ethnographic engagement in the field and member checking—checking findings with key informants (both of which I used)—minimizes the overall bias and increases the trustworthiness and validity of the findings.

DATA ANALYSIS

I used reduction techniques such as matrices for data analysis (Miles and Huberman 1994). First, I made a within-case analysis. A within-case analysis permits unique patterns in each case to emerge before identifying the poten-tial general pattern across cases (Miles and Huberman 1994). I prepared a descriptive report of each case study. Subsequently, I arranged the individual case study reports in chronological order to make the causal sequences over time evident (Yin 1994). These ordered reports thus generated narratives of the change efforts in NCJM. I used the milestones that made the most im-pact on employee involvement (which I have identified earlier) as pointers to divide the chronological order into certain periods. Within each period, I included the following: (1) reason for the variations of involvement of the previously mentioned three groups (staff, unions, workers), through each group’s opinion, perception, or experience, (2) descriptions of events using archival and other types of data documents, and (3) relevant observations that I made. The objective was to analyze the case study data by building an explanation about the case (Yin 1994). As is evident in chapter 5 and chapter 6, sometimes, I used the discussion of even rival explanations for the purpose of case analysis (ibid.).

Within-case analyses were followed by across-case analyses. Selection of indicators for different variables in comparative analysis involves the


30 Chapter Three

assumption that the indicators have the same meaning or are comparable across dissimilar social units. Therefore, across-case analyses need some standardization of the within-case analyses pattern. I compared the main patterns of relationships found in the within-case analyses with each other to ascertain how many cases shared similar characteristics. I made a system-atic comparison of emerging conjectures or theoretical arguments with the evidence from each case in order to assess how well it fitted the individual case data. Finally, I compared the findings emerging from the within-case and across-case analyses with the existing literature for the purpose of sup-port. This resulted in developing a theoretical model of the role of informa-tion sharing and trust in creating variations of EI in organizational change, which I present in chapter 6.


31

Chapter Four

A Panoramic View of the Transformation Efforts in NCJM

This chapter provides a historical overview of the transition of NCJM from 1987 to 1998 spanning roughly a decade. It also strives to answer the first of the five research questions outlined in the first chapter: were there any variations in EI at NCJM during the employee ownership period? Further, it describes briefly the events that led to the worker takeover of the ailing capitalist firm, the backdrop to the variation in EI.

FROM FAMILY OWNERSHIP TO EMPLOYEE OWNERSHIP

New Central Jute Mills Company Limited [NCJM Co. Ltd.] (An Enterprise of New Central Cooperative Credit Society Limited) is one of the largest industrial cooperative undertakings in the private sector in India. It was incorporated in 1915 and is located on the banks of the Hugli river in the Budge-Budge area in the South of West Bengal with two mills, Albion Jute Mills Company Limited and Lothian Jute Mills Company Limited, both operating in the same premises. The company was under private family ownership until 1986. In April 1986, the erstwhile owner declared a lock-out on the grounds of financial difficulties and labor unrest. The lockout spanned almost a year from 16 April 1986 to 7 March 1987 with no signs of re-opening. Meanwhile, the owner deserted the company, leaving behind some assets such as inventories, equipment, and buildings, and liabilities such as accounts payable, accrued expenses, income tax payable, and long-term debt payable. After a long legal and political struggle, the employees of the company decided to take over the company through their cooperative credit society. Accordingly, the management was changed with the consent of the old owners, and production resumed in April 1987. Thus, the NCJM


32 Chapter Four

Co. Ltd. started its operation as an enterprise of New Central Cooperative Credit Society Limited (NCCCS Ltd.).

Although the cooperative had started its operations, no one had assessed the financial viability and sustainability of the cooperative. As the union members and workers indicated in their interviews, the resumption of op-erations was the employees’ desperate attempt to avoid immediate job loss. Hence, the financial viability and sustainability did not appear to be signifi-cant issues at this stage. However, understanding the initial resource base is important to make sense of subsequent events. Therefore, the next section gives a brief overview of the financial and other resources that NCJM had at the beginning of the employee takeover.

The Resource Base: Money, Infrastructure, and Manpower

In the year 1985, the Sick Industries Company (Special Provision) Act (SICA)1 was passed, making it compulsory for sick companies to register with the Board for Industrial and Financial Reconstruction (BIFR). As per the government of West Bengal’s (one of the major shareholders’ of the NCJM taken over by workers) directive, the company approached BIFR for an as-sessment of its financial viability. In 1989, the operating agency that BIFR appointed for assessing the financial viability of the company, named Indus-trial Reconstruction Board of India (IRBI), assessed NCJM as a sick com-pany. The assessment highlighted financial weaknesses including a negative net worth of INR 70 crore (approximately) (1 crore=10 million) and the im-balance of INR 12 crore between the current liabilities and current assets. Consequently, in September 1990, BIFR sanctioned the company’s scheme for modernization and rehabilitation. The workers had to take over the liabil-ities of the erstwhile management amounting to INR 40 crore. The paid up capital as of September 1990 was INR 971.60 lakhs (1 lakh=100,000). Table 4.1 shows the shareholding pattern at this point in time.

Apart from the financial weakness, compared to other private competitors, the company also lacked modern, particularly automated, machinery. Most activities including the operations of various machines were still manually performed. The critical machines mostly included various types of looms and frames as given below in table 4.2.

Table 4.1. Share Holding Pattern

The Shareholder % of Share

Employees 51.05West Bengal Government 41.05Banks and Other Financial Institutions 6.39Public Holdings 1.51


A Panoramic View of the Transformation Efforts in NCJM 33

These critical machines were housed in the Jute divisions that manufac-tured various jute products such as sacks, jute bags, and carpets (jointly with the carpet division). In addition, there was a textile division, a quality control lab, and a Machinery Manufacturing Division (MMD) for manufacturing jute machinery. For details on various departments, refer to Appendix A. The company had other infrastructural facilities such as a self-sufficient township, clinics, telephone exchange, club, auditoriums, and canteen facilities. How-ever, most of them were not well-maintained. The large number of employees made maintenance of the facilities difficult. As of September 1990, out of the 8,500 employees, approximately 3,000 employees lived in the company quar-ters. This included 100 family quarters that accommodated managerial, cleri-cal, and supervisory staff. Workers lived in residential quarters called the “worker colony” that was located within the company premises. The remain-ing employees lived in their own houses or in rented accommodations that were located close to the company premises.

In 1987, when the cooperative began its operations, the number of em-ployees was 8,800. However, this number was reduced to 7,400 as on 31 December 1997 since during 1988–1998, 1,600 employees retired while only 100 were replaced. Based on their organizational status, the employees were formally categorized into the following groups as described in table 4.3.

For details on the organizational structure indicating the hierarchy of employee status, refer to Appendix B. The average age of employees as of September 1990 was 45. The employees (except managers) were organized into twelve different trade unions (hereafter, “unions”), of which six belonged

Table 4.2 Critical Machines

Type of Machine Quantity in Number

Hessian looms 810Sacking looms 452Other special looms 26Spinning frames 189Winding machines 160

Table 4.3. Employee Categories

Category of Employees Numbers

Top Management (Managing Director +President) 2Managerial Staff 29Supervisory Staff 112 (approx.)Clerical Staff 140 (approx.)Worker 7117 (approx.)

Total 7400 (approx.)


34 Chapter Four

to the workers and the remaining to staff. Ten unions were affiliates of the regional and national political parties.

According to trade union law in India (Section 4, The Trade Unions Act, 1926), until 2001, any seven members could register for a union (which was changed in 2001, mandating support from 15 percent of the workforce). There is no requirement to have a sole bargaining agent, hence the multi-plicity of unions. Although these unions belonged to different, and many times mutually fighting political parties, at the beginning of the takeover, the trade unions agreed to stand united behind the management despite their differing political affiliations. Notwithstanding a united political force, as described above, the new company started its journey against a number of odds such as an aged workforce, badly maintained facilities, manually oper-ated machines with lack of modernization, industrial sickness, and decreas-ing availability of raw material. However, the company had well-defined production processes.

The Production Processes and the Products

The main raw material was raw jute. It was outsourced from different sup-pliers, some of whom were the earlier promoters (the family owners) of the company. Thus, when the family owners left the company, the company had to face the challenge of arranging for raw material supply. The main production processes were softening, cutting, drawing, finishing, winding, and sewing. For more information regarding the production processes, re-fer to Appendix C, wherein a process flow chart is provided. The product groups of NCJM were sacks, hessians, mats, carpets and carpet backing, textiles, and jute yarn.

The variety of product groups indicates a potential to create product mixes. Yet, interestingly, one of the reasons that IRBI found for NCJM turning sick was the failure to create a better product mix that was effective in a competitive market. This failure was attributed partly to low employee involvement. Related to this, other important reasons that IRBI mentioned were poor labor-management relationship and associated low worker mo-rale, low productivity, strikes, and lockouts. These reasons were not signifi-cantly different from the reasons that IRBI found in the case of other sick companies (Bhowmik 2006; Srinivas 1993). It is in this challenging context that the transformation efforts of NCJM from a family-owned company to an employee cooperative unfolded through various stages. Next, I describe them briefly, covering the main events and the contextual elements that are relevant for employee involvement.



STAGES IN THE COOPERATIVE PERIOD

For better understanding and convenience, I divided the decade into five dif-ferent periods. The boundary (with some degree of overlap) between periods is based on the changes in the working of the company and their impact on the organizational members. In chronological order the five periods are:

1. The formative period (1987–1989)2. The disconcerted period (1989–1991)3. The stable period (1991–1994)4. The turbulent period (1994–1996)5. The new leadership period (1996–1998)

The Formative Period (1987–1989)

Opening Pandora’s Box

In September 1982, the family-owned company approached the Industrial Restructuring Bank of India (IRBI) for loans for its modernization-cum-renovation scheme at a proposed cost of INR 244 lakhs (1 lakh=100,000). The IRBI called a meeting with the promoters of the company and some potential investment bankers such as the Industrial Development Bank of India (IDBI). In the meeting, the promoters agreed that they would contrib-ute INR 49 lakhs and the investment bankers agreed to share the remaining, spreading it over a decade. However, as the company’s profit margin grew thinner, the investment bankers started canceling their share. By 1984–1985, the company went into operating loss. Interpreting this as a sign of financial non-viability, the promoters declared their investment as sunk costs, and be-came indifferent to investing further in the company. Moreover, citing rea-sons such as lack of funds to pay salaries and wages and lack of raw material supply, the owners had declared a lockout four times during 1982–1987 that amounted to 579 days, almost a year and a half. Out of this period, as men-tioned earlier, one year of lockout was during 1986–1987. The repeated and long lockouts (see Appendix E for strike history) combined with the lack of wages had dire consequences for the local economy and for people’s lives. Many people, particularly worker families, faced starvation for days. Most migrant workers went back to their hometowns, some committed suicide, and others resorted to begging. The local economy of the area was severely shaken since most residents in that area were directly or indirectly dependent on this company for their daily living. Hence, the community along with the employees, particularly workers, decided to pressure the unions to negotiate


36 Chapter Four

with the political leaders of the state government for re-opening the com-pany. This triggered a sequence of meetings.

A Mosaic of Meetings, Agreements, and Schemes

The workers, through their unions, thus approached the State Government of West Bengal and the Government of India with a plea to either nationalize the company or have the state government takeover the company. Subsequently, the state government asked the top management—the Managing Director and the General Manager—of the company to come up with suggestions for reviving the company. The top management took help from the local Member of Legislative Assembly (MLA) and other influential local political leaders to gain an assurance from the twelve trade unions that were functioning in the company, that they would stand united by the top management in reopening the company and moving it forward. A series of meetings between the top management (Managing Director + General Manager + any invitees) and the unions followed. In one such meeting, the suggestion to form an industrial cooperative came up, on which the management and the unions settled.

Subsequently, the Managing Director (MD) began meeting the unions more frequently, resulting in a formalized committee called the All-Union Advisory Committee (AUAC). In the AUAC meetings, the MD informed the unions that the cooperative could be formed only if each employee was will-ing to contribute INR 40/week from his/her weekly wages toward purchasing the shares of the company. Meanwhile, the MD held separate meetings with the staff to get their consent to form an industrial cooperative. Simultane-ously, all the unions together called a mass meeting of the workers. A union official estimated the number of workers who attended as 2000—approxi-mately 25 percent of the total workers, since the remaining workers had left for their hometowns. Most workers agreed to the weekly contribution. They told the unions that their only wish was to get the company re-opened. Thus, it appears that at least for workers the takeover was a pragmatic action that would save their jobs. Finally, the mills were re-opened in a phased manner starting on 7 March 1987, and came to full operation on 6 April 1987.

The first board meeting after the company had resumed its operations was held in June 1987. The meeting was full of queries from the board repre-sentatives of FIs that had a financial stake in the company. They repeatedly expressed their reservations and concerns regarding employee ownership. However, the state government representatives (the local MLA and other political leaders) requested the FIs to hold on until the company got declared sick by BIFR that had started its process in May 1987 (for details, see endnote 3). As mentioned in the beginning, after examining the financial status of the



cooperative as reported by IRBI, in 1989, BIFR declared the cooperative as a sick industrial unit.

While making the assessment about the financial viability of the company, IRBI held separate meetings with workers and staff. Before the meeting, as per the MD’s instructions, the union members trained select workers with the help of the labor office staff. The workers were asked to tell the IRBI personnel that all workers had voluntarily agreed to take up the equity share of INR3 crore through their own contribution, and that they were willing to adjust their arrears bonus of INR 1.5 crore. Moreover, they were to say that each of them agreed to contribute progressively INR 40 per week from their weekly wages that ranged from INR 100 to 200. The workers were also told that if they committed any mistake in communicating these points clearly to the IRBI personnel, it would be difficult to re-open the company. The work-ers understood the gravity of the situation, and perfectly executed whatever they were asked to do. IRBI held separate meetings with all investors who asked for a guarantee for their investment. Although the company, as well as IRBI, had proposed signing an agreement between the employees of the company and all creditors such as suppliers and investors, both creditors and investors expressed their lack of confidence in such an agreement. It is likely that investors had a greater incentive to invest in firms that provide capital control over labor rather than vice versa. The latter is the case here.

At that time, the trade unions through their political leaders urged the state government to become a guarantor on behalf of the employees by contribut-ing INR 4 crore and taking the equity share by investing their sales tax arrears. Thus, on behalf of the employees, the state government signed an agreement with the suppliers and creditors (for details, see Appendix F). Subsequently, the company signed an agreement with its creditors. As per the agreement, all the big creditors such as raw jute suppliers, store suppliers, and others would continue supplying all the necessary supplies on a two-month credit basis at a simple interest rate of 2 percent. Moreover, those suppliers who would be interested in trading finished goods could get them at the wholesale market price. The company also agreed that it would pay the creditors on an install-ment basis, the balance amount that it had after deducting the salary, wages, and other necessary expenses for the daily running of the mills.

In drafting and finalizing such agreements, the unions said that their role was mostly that of a passive onlooker since they could not understand much of the complex contracts. They added that the MD, the state government, and IRBI played crucial roles during this period. It seems that the pressure from the workers and unions, and particularly the special advantage of the geographi-cal location of being located in the Chief Minister’s (the Head of Legislature) constituency, played a vital role in convincing the state government to become


38 Chapter Four

the guarantor. Thus, finally the IRBI reported to the BIFR that the company could be revived, which avoided the closure of the company as a financially non-viable industrial unit by the quasi-judicial BIFR.

Formation of the Cooperative

Subsequent to the declaration of the company as a sick industrial unit, a bi-partite agreement was signed between the management (representing staff) and the unions (representing workers). The salient features of the agreement follow (for further details see Appendix E).

• In order to purchase equity shares of the company all employees including permanent, badlis (casual workers), and special badlis agreed to contribute INR 40 every week to the equity of the company until it reached INR 3,000. (Badlis are purely temporary, casual workers who are paid on a production rate basis. When permanent workers go on long leave, badlis are employed as their substitutes. “Special Badlis” are also purely temporary workers but are entitled to Provident Fund.)

• In the case of all employees except the badlis, this amount would be col-lected by converting the outstanding bonus and unpaid increase in wage components.

• This amount would be given as a Term Loan to the Company as advised by IRBI, the operating agency of BIFR, in the proposed reconstruction scheme.

• The employees (including badlis) agreed to form an industrial cooperative to acquire and hold the equity of the company on behalf of the employees.

• The company would accept such numbers of nominees representing em-ployee shareholders as may be decided in the reconstruction scheme to be finalized by the IRBI.

In the agreement, both parties agreed to form an industrial cooperative. For forming industrial cooperatives, a common practice is to rely primarily on initial investment by its worker-members who thereby gain a share in the economic ownership. In addition, such cooperatives usually try to take loans from cooperative banks or other such institutions that are ideologically com-mitted to the cooperative movement. NCJM also followed suit. However, to become eligible for taking loans from cooperative banks, the company had to be formally recognized as an industrial cooperative by the state cooperative agency. When the company approached the state cooperative to get their ap-proval to form an industrial cooperative, the state officials informed the com-pany that the formation of an industrial cooperative for such a sick and old company was tedious and legally cumbersome. Hence, both—the unions and



the management—pushed for amending the laws governing the formation of an industrial cooperative. However, the state cooperative, which is authorized to make amendments in the cooperative bylaws, rejected the idea of making any amendment citing other legal complications including taxation issues. Under these circumstances, the MD proposed the use of the old cooperative credit society of the mill, NCCCS, to purchase the shares of the company on behalf of the employees. All the unions agreed. Thus, in 1989, the NCJM Co. Ltd. legally became an enterprise of NCCCS.

Although the cooperative became a worker cooperative through workers’ economic ownership, many organizational members did not know much about the functioning of worker cooperatives. Consequently, the period 1989–1991 was filled with employees’ collective efforts to generate a basic understanding. Weick (1995) points out that the collective attempt to interpret and produce meaning, for example, what a worker cooperative meant to the employees—is a complex process replete with confusion. This was the case of the NCJM cooperative in its initial days. Therefore, I earmark this period as a disconcerted period, which I briefly describe next.

The Disconcerted Period (1989–1991): The Shramik Samiti Movement and the Confused Cooperative

By 1989, a majority of the employees who had left NCJM for their home-towns came back. Most of these workers had no information about the hap-penings at and the new functioning style of the company. Confusion and doubts burgeoned. Simultaneously, there were widespread rumors that all the plans including the formation of a cooperative were ploys that the unions and the management had designed together. The doubts and confusions snowballed into a new trade union, New Central Jute Mills Shramik Samiti (Shramik Samiti means Labor Camaraderie).

The New Central Jute Mills Shramik Samiti: A Disconcerted Offshoot

After the employee takeover, the rate of production increased gradually (see Appendix D). However, workers felt that despite the high levels of produc-tion, the company could not give them profits in return. This experience was contrary to their expectations. In the meantime, the delay in sanctioning of financial loans foiled the plan of the management and the unions to pay inter-est on old liabilities, and the unions informed the workers about this develop-ment. Thus, the unions and the management explained to the employees that although production was high, it was like a drop in the ocean due to increased total liabilities. Some workers and staff could not understand this explanation. Moreover, the MD used to help any employee irrespective of her/his position


40 Chapter Four

whenever she/he approached him. Such actions created an impression among some workers that the management of the company had enough money that the MD was giving out to the needy upon persistent asking. The MD had con-ducted all the meetings with the unions or with the management staff mem-bers at the Head Office (HO) in Kolkata (not at the plant in Budge-Budge). For going to the HO all the union representatives and staff were given Travel Allowance and Dearness Allowance in addition to leave from work. Due to the high frequency of such meetings, in effect, union representatives (or lead-ers) did not need to work in the plant. Some union representatives exploited this situation. They moved out frequently on flimsy grounds and the workers came to know about this. Many workers felt that most union representatives were dishonest in this matter. All these perceptions and experiences trans-lated into worker grievances.

To resolve workers’ grievances, the MD interacted freely with the workers, most of the time consoling them, listening to their miseries, providing mon-etary assistance, and encouraging them to believe that the company would become profitable in the near future. When workers repeatedly observed such actions, it deepened their doubts about the role of the cooperative’s liabilities that the management and the unions explained to them as the bottleneck in generating profits despite significant increase in production. The doubts grew into skepticism regarding the unions’ and management’s explanations as well as activities, particularly with respect to financial matters. The outcome was a strong worker protest and demonstration. Many workers quit their unions, and the leader, who articulated the general skepticism, conducted a mass meeting that a good number of workers attended. In his speech, the leader sarcastically pointed out the changes in plans from forming an industrial cooperative to a cooperative undertaking. He argued that the reason for the delay in sanctioning was that the management along with the unions had spent the allotted funds in ways that were in their interest, without any con-sideration for the workers. He also asserted that although the workers along with the management and the staff members were called owners, there had been no difference in the quality of life of ordinary workers. The leader and his followers formed a new union, the NCJM Shramik Samiti.

The Shramik Samiti adopted the stance that there was no labor participation scheme for purchasing the equity share of the company and that the manage-ment and the unions together had been exploiting the working class. Many workers could not even imagine that the previous promoters had fled leaving their assets. Hence, they also did not believe in the existence of any liability for the present company. Fanning this flame, some Shramik Samiti members spread a rumor that the unions and the management were secret “yes men” of the old promoter, which many employees (including some staff members) be-



lieved. The workers garlanded the leaders of the Shramik Samiti and tried to catch other union representatives who had been cheating the workers. Work was frequently disrupted during this period. To resolve this crisis, the AUAC decided that all unions including the Shramik Samiti should be represented in all the hearings of BIFR and IRBI and that the BIFR should be requested to hold separate meetings with all unions and all other parties. Accepting the request, the BIFR conducted the meetings. In the meeting, where all Board members were present, the BIFR rebuked the financiers openly for delaying the sanctioning of the funds for so long, particularly when compared to sanc-tioning of funds to other industrial organizations such as capitalist business corporations. Finally, in September 1990, BIFR sanctioned the funds and the relevant financial scheme after many modifications, with an instruction to reconstitute the Board of the cooperative at the earliest.

Reconstitution of the Board

The new board was to be formed in August 1991 as per the BIFR guide-lines. The nomination of employee representatives was yet to be done. In the AUAC meeting, the MD suggested to the unions that it would be better if they went for selection (in lieu of election). He also explained to them the benefits of selecting the local MLA who had been with them right from the beginning of the cooperative and the other two people (one INTUC state leader and the other, a BJP state leader—leaders of the two dominant opposition parties in the state politics). The unions did so and then informed the workers about the selection of the nominees. The workers were not very concerned about these matters since they were worried about their subsistence. The board was reconstituted in August 1991.

Until the reconstitution of the board, the union representatives, along with the MD, were caught up in raising adequate funds, and were entangled in unwinding the knots of legality. However, even after the reconstitution, most decisions were taken by the MD himself. Highlighting this point, the BIFR in its directive on December 6, 1991 stated the following points: (1) a manag-ing committee with a quorum of four members (the MD + three any other Board representatives) should be constituted, and (2) regarding all important decisions in respect of purchase, sales, and other matters, the prior approval of the managing committee (in 1998 it was renamed as Committee of Direc-tors) should be taken, instead of the MD of the company alone taking such decisions. Consequently, a managing committee was constituted in 1991. However, afterward, the MD usually took the decisions, sometimes after dis-cussions in the AUAC meetings, and subsequently sought the approval of the nominees (MD + three nominees completing the quorum). The discussions in the AUAC meetings resulted in increased employee involvement, particularly


42 Chapter Four

union involvement, in the policy level decision-making. This change marked not only the dampening of the shocks that the Shramik Samiti movement generated but also the beginning of a more stable period.

The Stable Period (1992–1994)

By the end of 1991, the cooperative seemed to have reached a more stable level of functioning that it could maintain until 1994. For example, during this period six committees, namely, the reconstituted Board, the AUAC, the PLCC, departmental committees (all newly formed after the company became a cooperative), the works committee, the canteen committee (which had already existed during the family ownership period), seemed to function smoothly. In the local daily, the state government hailed the cooperative as a role model for other cooperatives, in particular for its employee involvement (Bartaman, 17 January, 1993; Hindustan Times, 13 June 1993). Some re-searchers (Bhaumik 1992) also described the cooperative as a model worker cooperative based on its economic and organizational performance. Even international representatives from around the world paid a one-day visit to the plants. As the following interview excerpts illustrate, most of the interviewed persons described this period as the “heydays” of the cooperative. For ex-ample, one supervisory staff member described the changes during the stable period in the following way.

Earlier production problems at the higher levels (departmental/plant level) were discussed only between the manager and the in-charges. During those golden times, the discussion was among three: manager, in-charges, and overseers.

Similarly, one overseer expressed his experience so:

We did not pay much attention to root problems (in batching, if roots are present in the raw jute feed, these roots are removed to avoid problems at subsequent points). If some of our superiors came to check our work, we played tricks to avoid the checking. But, 1991 or 1992 onward, we started paying more attention to our work. (Two-three batching staff reported similar stories.)

My interviews with workers were also replete with similar comments about this period that highlighted a significant increase in employee involvement. A representative example follows.

Earlier [referring to the disconcerted period], workers in the beaming depart-ment used to wait for full bobbins to be brought [helpers in the spinning de-partment bring full bobbins]. During the golden period [referring to the stable



period], to save time, workers in the beaming department brought in the full bobbins themselves. (Worker 15)

Even the industry-wide strike did not affect the company (for details, see Ap-pendix E) despite the presence of unions of different political flags. During this period, there were no work disruptions. Hence, largely the mills ran smoothly. This period was considered as the beginning of a “golden period” in the history of NCJM. The change in worker involvement became evident in the way dis-putes were resolved, meetings were conducted, and work responsibilities were assumed. I discuss these in detail later. However, this high involvement did not last long as the cooperative could not override its financial crisis.

The Turbulent Period (1994–1996)

Even by 1994, the cooperative had not been able to make the estimated prog-ress. Hence, financiers became reluctant to extend their support. As a result, yet again, wages and salaries were delayed very often and this state of affairs became frequent from the end of 1994. The starving workers put pressure on the unions and the unions tried to influence the staff and the MD to get some money from the employees’ Provident Fund. Later, from 1995 onward, workers started accusing the unions of corruption and lack of concern for the workers. To resolve the financial crisis, the operating agency, IRBI, held a re-view meeting on 31 March 1993. In this meeting, it pointed out that the wages had gone up by INR 10 crore per year beyond what had been estimated. IRBI proposed wage reduction as an inevitable step to make the company viable. Anticipating a strong protest from the employees, particularly workers, this issue was not further discussed except in the AUAC. In the AUAC meeting, the MD put forth the following “proposal to be agreed to by the employees.”

• Reducing employment by not filling up vacancies.• Retiring 300 persons below the age of superannuation via Voluntary Re-

tirement Scheme (VRS).• Employing contract labor in the export yarn section, the decorative fabric

weaving section, and the sack sewing section, affecting 550 persons.

The unions agreed. However, subsequently, the retired workers started pressing hard for payment of their gratuity and dues. Meanwhile, there was a news item in the daily newspaper that the Secretary of the state had announced sanction of funds to NCJM by way of loan/equity participation. Upon learn-ing this news, retired workers from distant places frequented the mills office, asking for their payment as settled in the scheme. On the other hand, the


44 Chapter Four

cooperative had hardly any funds to carry out day-to-day operations. Many of these workers could not understand why the company was financially un-healthy. They started suspecting financial handling of the management and unions. Further, they shared their apprehensions about getting their wages in the future with other workers who were working in the company.

The Spreading Wave

All these reinforced workers’ earlier suspicions about unions’ honesty and top management’s intentions. Meanwhile, the lack of interaction between the employee nominees and workers had already deepened. Workers began to believe that the union representatives were misusing their investment and colluding with the top management and employee nominees. “The leaders, maybe along with their nominees, were looting” was a comment that the workers made in general. Expecting that the regular payment of wages would reduce labor unrest, the management gave priority to work-ers’ payments. However, payment did not make any significant difference. Rather, contrary to management’s expectation, the next default in payment fanned the flames into a strong worker protest against the management and the unions. It spread quickly, and some workers even turned violent. The workers staged a gherao2 of some managerial staff members, including the office manager and the personnel manager. When they heard that their wages were delayed due to delay in sanctioning of funds, they called the managers “corrupt,” and started pelting stones at them. They manhandled some union officials, and eventually the Rapid Action Force (a special po-lice force) was called in to mitigate the disturbances. In the presence of the District Magistrate, the workers were assured that they would be paid their wages within three days. The next day production resumed. However, the workers did not show much interest in their work.

The Eventual Spill

The production was not up to the level required for financial viability, as had been mandated by IRBI. This resulted in an urgent need to increase produc-tion. Although the unions and staff tried to convince the workers about the need to increase production, workers discounted them as “phony explana-tions.” At the same time, due to the worsening financial situation, the co-operative was not able to get raw materials in time. The non-availability of raw materials further irked the workers. They started increasingly grumbling about payments and bonus in all committees. Meanwhile, many union mem-bers tried to pressure the staff to give their members their wages and loan benefits at the earliest. Staff as well as workers objected to such union inter-



ference in administrative matters, and repeatedly raised such issues, including the lack of regular payment of wages in various committees. Gradually, com-mittees became a stage for fighting among staff, unions, and workers. Citing this reason, the management canceled the PLCC and Works Committee.

In the meantime, for adjusting finances, without informing even the Di-rector (Finance), the MD singlehandedly took the decision to sell off some assets. However, when the buyers came to the plant to take away the sold-out materials, some workers manhandled them. Once again, there was continu-ous default in payment, and the company was running into losses. When the workers understood that their wages would again be delayed, they started disrupting work. Later, on account of the poor finances of the company, a lay-off was declared in July 1996, which was revoked in April 1997 (130 days). By that time, some unions had already started blaming the MD for not getting the required funds and raw materials. Subsequently, the employees’ nominees in the Board suggested that a new MD could be brought in. Finally, the incumbent MD resigned. In April 1997, the Board appointed a new MD.

The New Leadership Period (1996–1998)

In May 1997, the MD appointed a President (Works) with the approval of the Board. The reasons cited for this new appointment was that the presi-dent, being located in the plant, would focus on plant matters and employee interactions, while the MD, being located at the head office (away from the plant) would focus on financial and market strategies. The new MD was able to procure some orders, and quickly found new markets for the company’s products. Raw material was made available through some arrangements with the suppliers. Consequently, production resumed. Meanwhile, the new Presi-dent tried to create some changes in the plant.

The Changes in the Plant

The President tried to share information with all employees, and was in constant touch with them. In order to establish effective communication, he called a meeting of all the unions, and conducted weekly meetings in which the working of the company in that week was reviewed, suggestions were sought, and any new decision was conveyed. He held daily meetings with the mill managers and Heads of Departments (HODs). Joint meetings of the unions and the management were also conducted to inform them of plant level decisions. The staff was kept informed through their HODs, and the workers were kept informed through their unions and staff members.

Simultaneously, the President kept tight control on employee discipline. For example, union representatives were asked to be punctual and to perform


46 Chapter Four

their duties at the plant properly. The workers and staff were also instructed to be punctual and do their work diligently. During the union meetings, the President warned the union representatives who did not work on par with performance standards. Similarly, the President warned the staff members who were not punctual. He caught some workers who were sleeping on duty and punished them on the spot. He started undertaking surprise checks. In this process, he caught some thefts. These checks made the workers more alert. In addition, the President began soliciting workers’ opinions about the working of the company, and encouraged them to share their grievances. These mea-sures gradually elicited employee involvement (for details, see chapter 5).

The Board of Directors instructed the President to retire 500 superannu-ated employees in a phased manner without any replacement. This reduction resulted in workload increase. Simultaneously, there was a redeployment of personnel. These two together combined with the President’s new style of functioning, which staff perceived as undermining their authority, created a lot of discomfort among the staff.

And Then the Eddies

The redeployment in particular generated considerable unease among the staff. Subsequently, the staff began to perceive the President unfavorably. At the same time, the unions (both staff union and worker union) that were affili-ated to the political party of one of the Board members increasingly opposed the President’s disciplinary actions. The Board Minutes indicate that there was a conflict between the President (an invitee to the Board of Directors) and the other nominee during the Board Meetings regarding the President’s authority to take disciplinary action against the AUAC members, make sal-ary/wage payments, and terminate employees’ jobs. Subsequently, 11 out of 12 unions came out openly supporting the President. They met the MD in November 1997 at the Head Office submitting a letter signed by all of them, withdrawing the employees’ nominees from the Board. The MD told them that a legal opinion would be obtained about the procedure to be followed in this case. The MD referred the matter to a practicing company secretary, and assured the unions that the matter would be pursued. Meanwhile, the Presi-dent, without the concurrence of the Managing Director, made the payment of salary/wages for the month of December 1997 to the employees engaged in essential services as well as to some junior/senior officers at the mills in contravention of the rules. These employees were strong supporters of the President. Subsequently, in 1998, The Board of Directors advised the MD to get the last six months’ expenditure audited by a Chartered Accounting firm.

Meanwhile, the President retired two officers who were reported to be close to the above-mentioned Board Director based on lack of discipline,



even though they had two more years to go. The Board of Directors then directed the President to reinstate the officers, which he neglected to do. Subsequently, as per the Board’s direction, the MD advised the officers to join duty, superseding the letter of termination that the President had issued. The Board also made it a rule that no advance payment should be made to the employees without the prior approval of the MD. Further, it instructed the President that he should not terminate any employee’s job without the prior consent of the MD. Ultimately, the Board promoted one of the mill managers as General Manager and placed him above the President.

When the workers heard this news and the preceding events, they disrupted work at the office in the plants. Subsequently, the President called a public meeting of workers in which he requested the workers not to disturb the day-to-day functioning of the company, and took them into confidence about the disagreements between the aforementioned nominee and himself. He took one week’s leave. During this week, the board dismissed the President. When the MD visited the plant immediately after, some union members and workers manhandled him. The union members and the workers were arrested. Works were again disrupted. Litigation started. Meanwhile, the ex-president was also arrested. There was a fall in production, discipline, and employee involvement (EI).

This brief panoramic view of the employees’ effort to transform an ail-ing company into a financially and socially sustainable worker cooperative highlights the critical role of EI and its variations in the transformation pro-cess. The next chapter unpacks this role, particularly the variations in EI, by examining three specific issues (or cases) that I identified using the method described in the previous chapter.

NOTES

1. The main objective of SICA was to determine financial non-viability, called sickness, of existing industrial units that make operating loss, and expedite the revival of potentially viable industrial units or closure of unviable units. A quasi-judicial body of experts named the Board for Industrial and Financial Reconstruction (BIFR) was set up in January 1987, with the authority to decide and declare whether an industrial unit is sick and if it is sick to decide and enforce the preventive, ameliora-tive, remedial, and other measure with respect to such companies. The BIFR became functional from 15th May 1987. The Board of Directors of a company that suspects the company to be sick could make a reference to the BIFR for getting the company declared as sick, which would make the company eligible for various benefits and concession from financial institutions. After receiving the reference, BIFR would make an inquiry for determining whether any industrial company had become sick.


48 Chapter Four

BIFR may order any operating agency to conduct the inquiry on its behalf. In the in-quiry if BIFR finds the company sick and that it is not feasible for the sick company to make its net worth exceed the accumulated losses within a reasonable time and that it is necessary or expedient in the public interest to revive the company, it can ask the operating agency to prepare a scheme providing measures to revive the company.

2. Gherao is a Hindi word that means “surround” or “to besiege.” It is a commonly used means of demonstrating worker protest by surrounding employ ers or employer representatives and locking them in, refusing to let them leave until the workers’ demands are met.


49

Chapter Five

Unpacking the Rubrics of Employee Involvement in the Transformation

The series of events and actors that I described in the previous chapter formed the web of the context in which the process of employee involvement un-folded. In this chapter, I investigate the dynamics of this unfolding by explor-ing the following questions that I posed in the introductory chapter.

1. How did EI vary in NCJM during the employee ownership period?2. How did the EI variation come about?

To facilitate the exploration, I chose three relatively independent issues (or cases) that (1) offered rich data (for example, in terms of the events that the employees could recall well and those that had been comparatively bet-ter documented than others) and (2) were substantive enough to capture the complexities and nuances of EI variation (for the list of criteria I employed to choose the three issues, see chapter 2). These three issues were (1) Dis-ciplinary Process, (2) The Plant Level Consultative Committee (hereafter, “PLCC”), and (3) Workload Change.

In the subsequent pages, I analyze these three issues as cases that spanned the five periods that I identified in the previous chapter. The qualitative data used in the construction of these three cases is primarily in the form of in-terviews with workers (supplemented with observational and archival data), union leaders, and staff members including the management. In order to keep the interview sources ordered, I have used a numbering mechanism that in-volves classifying each employee as a numerical code (1, 2, 3, 4 . . . ). These codes do not represent a hierarchical ordering of interviewees. Rather, they represent a method to identify the taxonomy of interviewees in a way that protects their identity.


50 Chapter Five

CASE 1: DISCIPLINING: A STORY OF UNDULATING ENTHUSIASM

This case narrates the evolution of the disciplinary process over the decade, and provides an analysis of employee involvement in the disciplinary process starting with a brief description of the disciplinary process during the Family Ownership period.

Disciplinary Process during the Family Ownership (FO) Period

According to the labor officers, unlike during the Employee Ownership (EO) period, disciplinary issues and the demand for related information were the key issues of discord during the Family Ownership (FO) period. Worker disciplinary cases were referred to the labor office. After the cases were registered and taken up by the labor office, union representatives represented the workers in the cases. These cases were then settled between the unions and the labor office. The concerned staff on the shop floor seldom played any role in the settlement, and the workers had no direct role. However, attempts for settlement in the labor office (and later by the top management) usually ended in litigation or altercations and unions’ demand for more information, which the management invariably denied. Altercations and litigation led to union protests and demonstrations that would disturb work. The documents at the labor office showed an increasing number of disciplinary cases during the later period (1980–1986). The documents portrayed the reason for this increase generally as workers’ unrest owing to irregular payments. The man-agement attributed the irregular payments to the poor financial health of the company. A representative disciplinary scenario would be the 1982 closure of a foundry unit following worker unrest.

The management’s decision to increase the workload in the foundry unit by reducing the number of workers irked the workers in the unit. They staged demonstrations and disrupted work. Consequently, the management termi-nated some workers’ employment. The unions demanded detailed explana-tions for the management’s decision, which the management was unwilling to accede to. Finally, the unions moved the labor court. After a seven-month-long legal battle, the unit was reopened with a 40 percent reduction in worker strength. It is important to note that the unions had perceived management’s sharing of information regarding disciplinary actions as limited, and this seems to be one of the reasons for union protests and labor unrest as far as disciplinary issues are concerned. This disciplinary process was in contrast with the disciplinary process during the employee ownership period, which I explain going through the five periods identified in the previous chapter.


Unpacking the Rubrics of Employee Involvement in the Transformation 51

Disciplinary Process during the Formative Period

The first change in this period was that disciplinary cases were usually not referred to the labor office. Instead, they were settled at the plant itself among the unions, staff, and workers. According to all the three groups, supervisors’ manhandling of workers came to naught. The severity of punishment also de-clined. The maximum punishment given was suspension (as opposed to ter-mination in the Family Ownership period), which occurred rarely. The usual punishment given was seating—a punitive act of making the deviant sit in his/her workplace without any job and payment for a period that usually var-ied from 2 to 6 hours (maximum) out of 8 hours of working time. This was in contrast to suspension for 2 to 7 days meted out during the Family Ownership period. Disciplinary actions were rarely documented, which indicated a shift of disciplinary actions from a formal space (characterized by documentation of actions and enforcement of written rules, etc.) to an informal space. There-fore, this part of the study is constructed mainly through employee interviews that reflect the opinions and views of different groups—unions, workers, staff including management (but excluding top management).

Regarding the changes in disciplinary process, the labor officer remarked, “Right from the beginning of the cooperative, there were no more cases esca-lated to the labor office.” As one staff member expressed, “We got rid of that formality. The unions were cooperative and we settled the matter together at the plant level itself.” Staff on the shop floor reported that they generally tried to convince the workers while taking disciplinary action. Gradually, two different styles of disciplining evolved. The first involved the staff concerned speaking directly to the deviant worker, elucidating the aftermath of his/her “misdemeanor.” After this, the staff proposed the disciplinary action. The deviant then approached the union representatives, and returned to the staff along with the union representative to assist the worker. The trio settled the matter through discussions.

Some staff followed a different style. In this second style, the staff spoke to the deviant and simultaneously contacted the union representatives directly or asked the deviant to come with a union representative, if he/she was dis-satisfied. Subsequently, the matter was settled through discussions between the staff and the union representative mostly in the presence of the deviant. Staff conveyed that most workers accepted the shop floor decisions that the staff and the unions made consensually.

Union representatives’ opinions were also not different. Sitting in the labor office, one union representative recalled “The cases were resolved in the plant itself by the union [representatives] and the staff together. Initially, not much disciplinary action was required.” Some union representatives perceived this initial change as a shift from formality to informality, which,


52 Chapter Five

they felt, inspired all to maintain proper discipline. For example, one union representative commented, “Disciplining was friendly; not very official and serious, but through intense discussions.”

Workers felt the same as the above two groups. For example, here is one representative comment, “At that time, unions were very sincere and honest as were our superiors. When we went wrong, they explained the problem to us, and convinced us about the correctness of the actions to be taken. Then, all of us worked together to correct the situation.” Many workers recollected that whenever problems came up, staff spoke to them directly or through the unions. They then approached the unions to assist them or to get the punish-ment reduced. Finally, they (the workers) accepted whatever decisions the staff and the unions took together.

In sum, according to all the three groups, in general, staff took disciplinary decisions in consultation with the unions. Staff and unions then explained the decision to the workers, and convinced them. Subsequently, workers usually accepted the consultative decision. Compared to the disciplinary process during the FO period, there was a significant increase in information sharing among and between staff, unions, and workers. These comparative changes in the disciplinary process seem to be similar to the comparative changes in the disciplinary process that occurred in other worker cooperatives that were formed from limited ownership companies. For example, Hoffmann (2001) narrates the comparative changes in the disciplinary process in a worker cooperative that was formed from a government-owned mine, British Coal. While under government ownership, the disciplinary issues, for example, em-ployee grievances were resolved according to a rigid set of formal rules, the cooperative resolved disputes informally and in a flexible manner that gave more voice to workers and unions. In NCJM, along with such changes, as described next, there was also a significant increase in employee involvement in the disciplinary process and in maintaining discipline.

Workers, in general, tried to maintain discipline, and showed an increased interest in their work. For example, as per staff reports, punctuality gradually became the norm and discipline was the buzzword. Workers came and left their workplace at designated times, stopped taking breaks for idle chitchat, and took more interest in their work and in excellence. In their interviews, both union representatives and staff praised the punctuality and self-regula-tion that workers showed in the initial period. They commented that workers stopped complaining about the “misbehavior” of staff. Some representative interview excerpts follow:

There was a noticeable change in worker attitude. . . . Even in disciplinary matters, they had a very cordial relationship with us [staff]. They would never mention our names to the unions. There was no more [worker] protest. I think



they had started trusting our words. If we justified our [disciplinary] actions, say seating, they would not challenge it; rather, they were willing to listen. Mostly, there was no need for even seating. Most of them maintained discipline them-selves. (Supervisory staff 2)

Check with the time clerks. They [workers] were so punctual. We had no late-comers for a good time . . . yes, until everything went for a toss with that event [referring to the Shramik Samiti movement]. The unions played a key role in developing worker confidence, indicating that workers were capable of and should practice self-discipline. (Managerial staff 5)

They [workers] displayed their enthusiasm in almost everything such as . . . maintaining discipline. In the later years, [19]88–89, we didn’t need to con-vince them about the need to maintain discipline. They had started thinking of the cooperative as their own, our own. I think we really succeeded then [at that point in time] in making them understand that they, I mean we all, were equally owners of the company. They had started believing it. The enthusiasm just fol-lowed. Look at their punctuality at that time, talk to the staff, they didn’t have any major disciplinary issues. We (unions) saw staff as our family members, and all of us worked together for our cooperative . . . even in the case of disciplinary actions. (Union leader 6)

Regarding the change in the unions’ approach to the disciplinary process, most staff members interpreted it as a commendable involvement. As men-tioned earlier, staff explained that during the FO period, unions were an-tagonistic toward the management, and by extension toward staff, since they perceived staff as a part of management. Therefore, at that time, the unions al-ways protested against staff’s disciplinary actions. However, at the beginning of the cooperative period, unions adopted a cooperative approach towards the management, and in turn, staff. Unions became sincere in maintaining disci-pline, and stopped protesting against the disciplinary acts of staff. They also started assisting staff in maintaining discipline. A majority of the staff had the same explanation—that initially unions were sincere in maintaining dis-cipline. Staff was convinced about the change in the unions’ approach when they (staff) saw the unions putting in “united (and) good” effort in re-opening the mills “standing up along with the management.”

For example, here is a representative comment from the interview of a supervisory staff member (Supervisory Staff Member 20) who was infamous for his union apathy: “Well! Realizing all the efforts that unions put into re-opening the Mills, I also felt that we should respect even the worker unions. At their request, very often, I decided not to give out any punishment.”

Regarding the increased interest in disciplinary processes, all union mem-bers responded in the same voice: they had strong belief 1 in the top manage-


54 Chapter Five

ment’s words that if unions put forth good efforts, the cooperative would become a great success. The dream of the fame that success would fetch them, particularly in the wake of cooperative failures that were happening around (Bhowmik and Sarker 2002), inspired the union members. Below is a representative interview excerpt:

We hoped to become pioneers in this state. We were highly inspired by the op-portunity to make it [NCJM cooperative] a success, a confidence that the MD developed in us. We saw the support that the workers and even staff gave us. We lacked nothing but materials and money; we thought we could all tide over the difficult times. . . . So, we put our hearts into it, whether it was discipline or anything else. (Union leader 7)

Similarly, workers’ feeling of ownership (of the cooperative) helped increase the EI as the interview and group discussion excerpts given below indicate.

We believed that this is our own company. We got that paper saying so (refer-ring to share). So, it was like our own shop (analogy to street shops) and we worked for it. We expected some money [profit] from it. We worked sincerely, very hard. (Worker 10)

Below is an excerpt from a group discussion:

We just believed them (unions and management). We didn’t know what it [re-ferring to share] meant. But, we believed what they told us . . . that we all were owners. So, we also believed what they told us later . . . that if you work hard, you will be able to make profits. (Worker 1)

Saab,2 we believed both the leaders [unions] and our superiors. Whatever they said was final. (Worker 2)

We believed that our own money was in (invested). We were like the kirana [street shop] owners. (Worker 5)

In short, according to all three entities—staff, unions, and workers—there was an increase in the involvement of workers and unions. This increased EI seems to emanate from workers’ trust in management and unions, and unions’ trust in management. This was coupled with increased information sharing between workers and the management, including unions. It also seems that the union’s increased information sharing led to increased worker trust in the management, union, and generally in the idea of a cooperative production and ownership.

However, some of the staff members had a different opinion about the change in the role of unions in relation to disciplinary process. They inter-



preted consultation with unions as not a voluntary consultation but a union intervention and intrusion. Below are some representative comments:

Even during [family ownership] period, these guys [unions] wanted us to pro-vide all kinds of information. Now, they not only wanted information but started poking their nose in everything including disciplinary matters. They would ask you all kinds of questions, and put the worker on the spot as if the unions were the patrons of the worker. Even the worker would ask you many questions. I am not saying that this was wrong. Look, this was a cooperative, not a family business any more. Many of us understood this. But, the unions played the role of labor officers or managers. This was unacceptable. (Supervisory staff 5)

By this time, they [unions] were so excited that they became a part of the man-agement and started interfering in most matters . . . disciplinary matters were no exception. I think they were using their AUAC membership (status) as an excuse to interfere in all matters. However, it was not all bad. They maintained discipline, and asked their members and other workers to maintain discipline as well. That part was of course helpful. (Clerical staff 3)

Thus, some staff members felt that the unions had started fiddling with the disciplinary processes during the initial period using their close con-tacts with the top management as a source of power to influence decisions regarding workers’ discipline. Interestingly, among the workers also there was a minority that interpreted the unions’ changed approach to disciplinary actions as detrimental to workers and a result of the nexus between unions and staff that was absent during the FO period. Below are some representa-tive comments:

From the beginning, unions began to support the staff to punish us. They slowly became a team, and started coming down upon us. We couldn’t understand what was going on. We felt that they had suddenly started speaking a foreign language. We couldn’t understand how we could become the owners, and even how [the previous family owners] could just leave such a huge factory just like that. Even now, some of us are unclear. (Worker 40)

Earlier (referring to the FO period) they (unions and labor office staff) were playing cat and mouse games. Soon, they (unions) started moving with the MD and other bosses, and started behaving like them (bosses). When we had prob-lems with some staff members, the unions used to represent us. They continued this later, almost until [Shramik Samiti leader] bhai3 called for us to unite against the cheating unions. (Worker 49)

As the above quotes indicate, most of these workers who were unclear or apprehensive about the transformation of the family-owned company into a


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cooperative, took an active part in the Shramik Samiti movement that signifi-cantly affected the disciplinary process.

Disciplinary Process during the Shramik Samiti Period

Interestingly, as the previous quotes imply, many of these workers who par-ticipated actively in the Shramik Samiti movement had been skeptical about the idea of a worker cooperative right from its inception. Also, many of them were latecomers to the cooperative. For example, below is a representative worker interview excerpt:

We did not understand what they meant by “cooperative”; nor did we under-stand how we could be the owners. How could that be possible? We know that a few things had happened before we returned (from native place). You know, when the [family owners] left, we had to get back to our hometowns. We left in hordes. You tell us, bhai,4 who would have taken care of our families? We didn’t want to die here or beg. But, then, by the time we came back we heard this talk . . . about the cooperative, and that we were also a part of the company now. They (unions) showed us some papers; we agreed to do what the others also did. But, we were unsure what all of this meant. We didn’t have any idea . . . what our bhai (referring to the Shramik Samiti leader) told us made more sense to us that time. . . . Then, you know, bhai, slowly, we stopped coming to work. (Worker 25)

Thus, although in the beginning of the formative period, workers’ involve-ment in the disciplinary process, work, and other organizational issues was higher than it was during the succeeding Family Ownership period, a few months before the Shramik Samiti formation, worker involvement in the disciplinary process started dipping. Pointing to the dip in worker enthusi-asm in maintaining discipline, the MD’s note stated, “The initial (worker) enthusiasm is waning. Workers are not willing to maintain discipline as they did in the beginning. Their interest in work and confidence in the union are gradually eroding.”

During the interviews, many staff members described how worker enthusi-asm in maintaining discipline went down. Here is a representative interview quote:

They seemed to be in a really bad mood. Many of them started coming late to work and leaving early. If you asked them to spin the bob or root out properly, they would pretend that they had heard you, but the moment you left, they would do what they wanted and sometimes stop working. . . . They would sometimes disturb others who were working, and engage them in idle chit-chat. I remember well, Bhai, we really had a tough time. (Supervisory staff 15)



Similarly, a union representative (union leader 30) commented during his interview:

By that time [a Shramik Samiti leader] had just started his accusations and al-legations. Many of our bhais believed him completely. They started calling us cheats; they were apprehensive that we had been looting their money along with the management. Many of them demanded that we stop intervening in the disci-plinary process and told us that we had no right to do so. They told us that they would do what they liked (with the work). And they did. Those who worked on the Hessians would always come late, which affected (badly) the carpet unit also, and late coming soon spread. There were many instances like this. They lost interest in the cooperative, and all the talk about discipline sounded hollow to them.

As these quotes illustrate, workers lost interest in maintaining discipline. Moreover, workers were acerbic in their remarks regarding discipline pertain-ing to this period. A representative quote follows:

At that time, these people (union representatives) and some superiors started cheating us. We also showed our strength. Bhai, we went back to our familiar ways of retaliating (secretly disrupting the work). (Worker 50)

Workers slowly started opposing the new role of the unions in the dis-ciplinary process, even while many unions tried to explain the disciplinary actions in detail (as they had done in the previous period) and convince them, and were trying to lessen the gravity of the punitive steps that the staff took. Further, workers asked staff to take disciplinary action against union mem-bers’ “misdemeanors” and “intervention.” As the PLCC minutes showed, worker representatives expressed their concern over “unions interfering in disciplining” and due to lack of discipline, “production workers are losing interest in their work.”

During an interview, a worker representative recalled that in the PLCC, worker representatives had asked staff to discipline union representatives, saying that the union representatives often used flimsy excuses to not work in the plant during the work hours. They questioned the union member, and many union members could not provide convincing reasons for their absence from work. Therefore, in informal discussions, the demand to discipline the union members grewstronger and the worker representatives kept raising this demand in the PLCC meetings. However, many staff members were unable to discipline the union representatives. Workers then started standing up against some staff members also. Surprisingly, workers still cooperated with the staff members whom they perceived as “good” even though these staff members were also unable to discipline the unions. Therefore, the workers


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seem concerned more about the honesty of the staff than their competence to discipline. For example, below is a part of a group discussion with 12 workers in the worker colony.

They (“good” staff) were not corrupt, they can’t be. They were very good; we know that they will not do anything wrong. (Worker 1) [Others nodded their heads in affirmation.]

Corrupt . . . . Meaning? (Field researcher)

Bhai, they did nothing wrong with our money. They would not steal or use our money for something else. See, the leaders [unions] misused it for unnecessary travel, as did our superiors. When we go and ask for a loan, there is no money. But these people seem to have enough money to travel and dine in restaurants. What does it mean? They were simply cheating us. They told us lies to cover up all these (wrongdoings). (Worker 2)

Right bhai, we did not listen to those guys. We felt that they had cheated us. (Worker 3)

Interestingly, it seems that the dip in worker involvement led to some changes in the disciplinary process that the cooperative had adopted at the beginning of the formative period. Many workers stopped approaching the unions for settling disciplinary cases, and most of the staff members who had been contacting the unions earlier (in disciplinary issues) also started deal-ing directly with the workers. In their interviews, staff members and workers pointed out that during this period, workers had started arguing their case directly with staff, and that many times workers did not abide by staff’s deci-sion. They kept on asking for justification for the disciplinary actions.

Some representative interview excerpts follow:

They did not show any more interest in disciplinary matters. They had lost in-terest in the work too. For example, they started moving out of their workplace frequently during duty time, and did not take much care anymore to keep their machines clean, etc. (Supervisory staff 1)

Whenever we proposed any disciplinary action, say seating or even a mild scolding, they would immediately start arguing, and would not agree with or obey us. This was a significant change in how they responded. Many of them had a feeling that the management including some of us had been misappropriat-ing their money. But, if you try to prove your innocence, they wouldn’t listen. (Supervisory staff 2)



Some staff took disciplinary action including suspension against workers who disrupted work. However, over time, just like the workers, staff also started losing interest in maintaining discipline. Below are some representa-tive interview excerpts:

It is true that most of us lost interest in maintaining discipline. Why should we take pains to explain our actions to them? Why should we be interested in main-taining discipline when they (workers) did not believe us? (Supervisory staff 3)

We are also human beings. The company is not just ours but theirs too. If they could not understand it, what could we do? I think by that time many of us had crossed our threshold. We were as sincere as they were. Even regarding disciplinary matters, say, giving a seating or admonishing, our dealings were ex-tremely friendly. Then they started treating us like enemies, always finding fault with the way we dealt with them. Later, they joined the Shramik Samiti [union]. It was hard to understand what they gained from such behavior; I think, neither did they. Anyway, they should have been as sincere as we were in maintaining discipline and interest [in work]. So, naturally, we also lost interest in maintain-ing any discipline . . . and even in our work. (Supervisory staff 10)

The PLCC minutes stated, “staff members are neglecting their duty to maintain worker discipline and are reluctant to discuss the issues with work-ers in detail.” With reference to this point in the minutes, during an interview, one union representative (Union leader 30) commented, “Unions were try-ing to cooperate with the staff to instill discipline but the staff lost interest in doing so. They were no more willing to put in any effort into explaining the matters to workers or even to us. Our feeling (unions) was that they had lost confidence in the cooperative.” Eventually, many union representatives admitted that finally the unions had also lost interest in maintaining any dis-cipline when workers stopped believing in them. Some illustrative excerpts from union leaders’ interviews follow:

By that time we felt that the workers had just deserted us. They did not believe us. In spite of our efforts to share information with them, they felt that we were not telling them the full story. Yes, we were unable to tell them every detail. It was impossible for anyone to do so when so much was happening around us. In fact, it was hard even for us to understand the situation. But, the workers would not accept this. So, slowly, we also lost our patience in explaining the facts to them. (Union leader 35)

They were totally against us. They strongly believed that we had been stealing their wages, so much so that they manhandled many of us. Yes, it is true that


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some of the staff and union members were not handling the PF issues and travel expenses properly. So, the workers’ mistrust was justified. We could do noth-ing. I think ultimately each of us [unions] started favoring our own members. Some of us pushed the staff members to get, say, PF, for our members while it was denied to others. Some of us did try to explain our actions, but the workers would not listen to us; perhaps it was hard for them to understand what we were trying to convey. So, workers just lost their faith in us. (Union leader 20)

In short, it seems that workers lost their trust in the management and the unions. This, in turn, led to a decrease in their involvement although there was significant sharing of information between workers and the management-union group. The Shramik Samiti seems to have been a manifestation of this impaired worker trust. Certainly, the Shramik Samiti gave an adverse jolt to employee involvement, particularly worker involvement, in disciplinary pro-cess. This impact peaked during Shramik Samiti demonstrations, and went on for some more time. As mentioned earlier, the main allegation of the Shramik Samiti was that the unions and the management were reluctant to share cru-cial information since the management and unions together had been misap-propriating and stealing their wages and investment in the cooperative. These allegations made a lot more sense to workers than the increasingly limited explanations that they received from the unions as well as the staff.

However, later, the BIFR meeting with workers and the Shramik Samiti’s explanation (after they participated in Board meetings) to workers damp-ened worker skepticism. This, in turn, led to an increase in employee involvement, and worker involvement in particular, in the disciplinary process, to which I turn next.

Disciplinary Process during the Stable Period

After the explanation of the Shramik Samiti leader and his attempt to respond to workers’ questions about the functioning of the cooperative, particularly its financial challenges, it took a few months for workers to respond as a collective. According to Prem, there was talk in the worker colony about the Shramik Samiti’s explanations. Most of them had started feeling a little uneasy about what had happened and their protests and work disturbances in particular. Given below is a part of a group discussion that reproduces workers’ recall:

We realized that bhai [the Shramik Samiti leader] had exaggerated things, he might have been trying to trick us or perhaps he did not really know much (about the happenings in the cooperative). But, by then we could get some genu-ine information from the authority [referring to BIFR]. (Worker 1)



(Interrupting) I think he [Shramik Samiti leader] was innocent. Just like most of us, he also did not know much. He did speak on our behalf, but there were many things we did not know. When we did get the information, for example, that the government had asked us [the cooperative] to improve quickly and that the agency [referring to BIFR] was helping us to do so, we got back to work. Many of us left the union [referring to the Shramik Samiti]. Membership did not seem necessary, nor was it useful. (Worker 2)

(Interrupting) No, dear bhai, it’s not that it was really unnecessary but [Shramik Samiti leader] bhai sort of misled us. Anyway, we set up a meeting with those officials [BIFR personnel]. We were unsure about what had been happening. The unions and our superiors [staff members] told us many phony stories, which we could not understand. (Worker 3)

But then we all felt like having done something [that] we could have avoided (indicating joining the Shramik Samiti). Right bhai? (Worker 1) [Others nodded their heads in affirmation.]

Anyway, by then, the leaders’ behavior had changed; it was like in the early days of the cooperative [referring to the formative period]. They now started working in the plant . . . they went out only when it was necessary. They ad-mitted that they had not been able to fully understand what had been going on. There had been some financial impropriety though not as much as the [Shramik Samiti leader] had told us. Our confidence in them was restored and we thought we could work together again. Isn’t that right? [Others nodded their heads.] (Worker 3)

Thus, gradually, the workers in general started accusing the Shramik Samiti leaders of misleading them. The accusations gained momentum. This led to workers’ pelting stones5 at the Shramik Samiti leaders. Subse-quently, workers resumed taking greater interest in work and disciplinary matters. As a result, production rose to unprecedented levels (see Appendix D). Meanwhile, the Shramik Samiti was accepted into the mainstream and all unions stood united in supporting the management and staff. The MD appreciated this unity and support in a note: “Unions stood together to catapult New Central Jute Mills to a high position.” Further, as mentioned in the previous chapter, the unions took a collective decision to stay away from various strikes including industry-wide strikes. Again, from the MD’s note: “All unions agreed to keep New Central outside the purview of the industry-wide strike in 1991–1992 demonstrating the awareness that worker ownership was different from private ownership.” The note went on to praise the care that workers, staff, and especially unions took in their work. The increased enthusiasm was reflected in the maintenance of discipline


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too. The following is an illustrative incident that I reconstructed from the interview of the people involved and my field notes. The incident illustrates the change in disciplinary process during these days.

One worker who was widely considered recalcitrant came late to his workplace on three consecutive days and left a little early. The staff on duty noticed this, and warned him on the third day that the following day he would be given three hours seating. Irked by the warning, the worker screamed, “If your child is unwell, won’t you take leave?” However, the staff member was certain that the worker’s child was not ill. After duty (on the third day), the worker approached one union representative. The union leader along with the worker met the staff after his duty time was over. The leader convinced the staff members that what the worker said was partly true, and asked the staff about their views and suggestions while requesting them to reduce the worker’s seating time. Then the staff explained how the worker’s late com-ing affected other work, and in turn, the whole production. Consequently, the worker admitted that he could have avoided leaving early and he requested a one-hour seating. Finally, the three of them settled on a two-hour seating.

Similar incidents showed that the workers resumed approaching the unions for settling disciplinary cases and accepting the decisions taken by the staff in consultation with the union representatives.

In short, there was again a significant increase of EI in the disciplinary process. There was also cooperation between workers, unions, and staff in developing and maintaining discipline. Yet, unlike in the formative period, initially the staff did not make any effort to explain their disciplinary action to workers. However, as the above-described incident highlights, unions re-sumed taking workers to staff and then asking for staff’s explanation regard-ing the disciplinary action. Gradually, staff also resumed explaining why they had acted in particular ways, particularly when workers showed an interest in disciplinary matters, and the overall EI increased as the interview excerpts given below illustrate.

Again we had a good time with them [staff and unions]. All of us worked to-gether. We [workers] took interest in our work. I remember, we used to keep our machines clean and in proper condition. The hemming department did their job with great care. We didn’t want any rejection. We felt like coming on time and were willing to work late. (Worker 5)

If we did something that was not good, they [staff members] would explain what it meant for all of us. But, this happened over a period, rather slowly. Initially, our unions helped us understand these things. Later our superiors also started explaining their actions to us. This change was really good. Look, the baling [a process of pressing the sewed sack] was much better then. The workers in the



winding section worked really hard. We didn’t want to waste our time. None of us even took part in the [industry-wide] strike. (Worker 6)

I think this [the increased EI] was an effect of (worker) contrition. They [work-ers] realized that they had done something wrong [referring to the Shramik Samiti movement]. Then they compensated for it with increased sincere efforts. Like in the early period [referring to the formative period], we regained enthu-siasm. Better discipline was maintained. We felt that the workers needed to be educated about their actions and the consequences. Perhaps if they had known about the effects of their actions [joining the Shramik Samiti movement], they might have not done so. We felt that educating them would lead to greater en-thusiasm on their part. (Managerial staff 12)

Thus, the staff attributed the favorable changes in disciplinary process to workers’ realization of their “mistake” and the consequent remorse. Staff also happily concluded that the Shramik Samiti incident had taught the unions a lesson—that if they became corrupt, divided or dishonest and if they showed favoritism, workers would take them to task and consequently, they would lose control over the workers. This understanding, according to the staff members, brought the unions back into their earlier sincere and unified state.

Consequently, workers started obeying the unions and thus the unions acquired control again. Staff realized that they could easily control workers using the unions. This realization brought back staff to their earlier state of consulting with the unions. Since payments were now regular, and unions and staff were working in a united fashion without corruption and favorit-ism, workers also took an interest in disciplinary activities. Some illustrative interview excerpts follow:

I think the main reason for workers’ regaining their interest is simply prompt payment. They disrupted normal working when they did not get their wages. When they started getting their wages on time, they came back to work. That is it. (Supervisory staff 7)

By that time the unions realized that they had to keep their word or else they would face the workers’ wrath. The unions stopped using meetings as an excuse to shirk their duties. They became more serious about their work. We also felt that they [unions] could regain their control over workers. Look, in disciplinary matters, they [workers] started seeking the unions’ help. So, it was easy for us to discipline workers through the unions as we had done earlier. (Supervisory staff 8)

Unions now had better control over the workers. That of course helped us in disciplining the workers. The unions were more honest, knowing that other-wise, they would have to face dire consequences from the workers. For work-


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ers, the main issue was getting their payment. Since they had started getting their payments on time, they got back to work. Perhaps, better clarity in terms of what had been happening also helped them understand the situation better. (Supervisory staff 5)

Meanwhile, the unions also understood that the staff consulting them about disciplinary matters was based on the staff’s perception that the unions had regained control over the workers. I provide some representative comments below.

At that time they [workers] came back to us with their complaints [disciplinary matters] and we took them to the staff. The situation had definitely improved. It was easy on the staff as well, since they could easily maintain [worker] disci-pline with our help. (Union leader 1)

As had happened earlier, the workers came back to us with their problems, which we would take to the staff. Again disciplining was becoming a more consultative process. We motivated them by saying that if all of us worked hard, we could get even better wages. This time, they started believing us. That was a great feeling. They showed more interest in their work. I think the disrup-tion [referring to the Shramik Samiti movement] was mainly due to the lack of consistent payments. They thought that the concept of “cooperative” meant that they would get their wages regularly without any problem. . . . But, when this [the regular wage payment] did not happen, they joined the Shramik Samiti. So, when they were paid on time, they got back to work whole heartedly. This helped us also to put in more effort into self-discipline. All of us decided not to participate in industry-wide strikes, even in the all-India strike despite immense pressure from our [political] unions to participate. (Union leader 4)

Most unions as well as staff attributed the reason for workers’ resump-tion of work with increased interest (i.e., increased EI) to the resumption of regular payment. It is true that the payment of wages/salary was inconsistent during the Shramik Samiti movement, and that for workers, irregularity of payment was a central issue. Therefore, at this stage it may be tempting to conclude that variation in EI, particularly worker involvement was signifi-cantly dependent on the regularity of payment of wages. However, as we will see later, it is only part of the story.

In short, the Shramik Samiti movement perhaps helped articulate work-ers’ questions and apprehensions, particularly about financial management, more collectively, publicly, and forcibly. The resultant increase in infor-mation sharing through channels such as the BIFR, which workers saw as authentic, reliable, and credible, along with the regular payment of wages, helped to repair workers’ mistrust or their loss of trust in the cooperative



and the management. The manifestation of this repaired trust was perhaps the reason for the increased EI.

Apart from maintaining discipline at the workplace, unions’ and workers’ interpretations of staying away from industry-wide strikes as a symbol of maintaining discipline were also a signal of the increased EI in matters related to discipline. The interpretation implied that, conversely, now, unions and workers did not view joining the industry-wide strike as an expression of soli-darity, which was the case during the FO period, but as an act of indiscipline.

However, the cooperative could not sustain the high level of involvement, as its financial burden grew further. As described in the previous chapter, from 1993 onward, the cooperative started facing some setbacks in acquiring quality raw material and in selling its products. For financial sustainability, the cooperative was expected to progress as per the estimates provided by an external agency as per IRBI’s directive. Since the cooperative could not make the estimated financial progress, financiers became reluctant to sanc-tion funds. This, in turn, led to delays in wage and salary payments. In the beginning, workers accepted the delays and irregularity in wage payments without any complaints. Later, toward the middle or end of 1994, they started disrupting work, grumbling mainly against the delay in payment.

Meanwhile, as the Managing Director’s (MD’s) note mentions, “To avoid such agitation the cooperative is compelled to maintain workers’ payment in priority over all other needs. . . . This means against all odds, that the co-operative is determined to disburse wages and salary regularly for the next several months.” However, at this time, contrary to management’s expecta-tion, the regularity in payment failed to evoke workers’ interest in their work or in company affairs such as disciplinary processes. Moreover, the minutes of the board meeting pointed to financial mismanagement, news of which had reached the workers through the grapevine. The employee interviews indicated workers’ apprehensions that some union representatives and staff continued with their corrupt practices. Workers’ doubts (about corruption and mishandling of finances) culminated in frequent agitations and interruptions in work processes (for details refer to chapter 3, “The Turbulent Period”). These developments also had an effect on the day-to-day disciplining process.

Disciplinary Process during the Turbulent Period

As happened earlier during the Shramik Samiti movement, the first effect was that the workers and staff stopped consulting unions in disciplinary cases. This led the union representatives to make such comments in the PLCC meeting that, “Staff members no longer respect union representatives” (PLCC minutes).


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While exploring this point during a concerned union representative’s in-terview, he deplored the fact that the staff kept the unions out of disciplinary decisions due to which (also) unions lost face with the worker mass. He went on to state, “The Company had a good time when these people (staff) listened to us. . . . Anyway, later they stopped taking us seriously due to the loss of our control on the workers.”

Interestingly, when the unions tried to maintain their influence on disciplin-ary processes by taking workers to staff or representing workers, workers ob-jected to it. Here are some representative statements from the PLCC minutes:

Unions’ interference in administration and disciplining should be curbed. Work-ers no more need unions’ help in this matter. (Worker representatives)

Unions should leave all administrative activities (including disciplinary actions) in the hands of management. (A union representative)

Unions should stop fighting with staff on disciplinary matters. Since workers do not want the union to interfere in administrative matters, unions should not intervene in decisions regarding discipline. (Staff representatives)

In addition, workers and some union representatives asked staff members to discipline some union members. The PLCC document reads:

Many union members are being paid despite not doing any work. They should be urged to work regularly. Otherwise, it is difficult to urge others to work.

However, staff was unable to discipline these union members, and the staff expressed their helplessness in a later PLCC meeting:

(Although we are) asked to take disciplinary action, when staff takes action against some workmen, the unions interfere. Moreover, unions make allega-tions to the MD by listing the names of staff members. The staff feels that in such situations, it is impossible for them to ask union members to maintain dis-cipline. Hence, union representatives should discipline themselves first. (Staff representatives)

Even though some unions tried to interfere in disciplinary activities, staff tried to consult directly with workers. Consequently, workers’ direct influ-ence on disciplinary decisions increased. Yet, workers seemed to have lost interest in maintaining discipline. For example, one middle manager narrated the following incident (from my field notes).

One day, a shop floor worker came two hours late. When the staff on duty asked him the reason, he informed Rajan [the staff] that he had been sleeping.



Then, Rajan threatened him with a four-hour seating and a one-hour payment cut. The worker started arguing for a two-hour payment cut as an alternative punishment. The argument went one for almost an hour. Then, while watching all these negotiations, I (the reporter of this incident) intervened. In the end, however, we yielded to the worker’s demand.6 Most of us were quite enthu-siastic about instilling work discipline and maintaining it, but the workers seemed to be losing steam.

Although workers lost interest in maintaining discipline, unlike the Sh-ramik Samiti movement period, as the above incident illustrates, this time the staff was more enthusiastic about instilling discipline. One PLCC meeting showered commendations on staff members’ efforts to instill and maintain discipline. With regard to the shop floor staff, workers considered staff more sincere than the unions in maintaining discipline and understanding workers’ struggles. A worker (Worker 39) commented:

Earlier I went to the union leaders, but later on, it was enough to approach our superiors. They did a better job (than the unions) of understanding our situa-tions and explaining things well. Their interest was also genuine. Unlike the bhais from the unions, they came on time and did their work sincerely and then asked us to follow their style.

Another worker said with certainty:

They punished us only when we did something wrong. Once again, they helped us to understand the issues . . . like the undesirable effect of our actions.

Although workers in general did not object to a staff member’s disciplinary actions and influenced disciplinary decisions directly, they did not take any active interest in maintaining discipline. Instead, they did so mainly for the sake of staff members.

Following is a representative remark from a supervisory staff member (Supervisory staff 9) during an interview: “We did a better job now as com-pared to earlier [referring to the stable period], of explaining various issues, such as the possibility of being paid regularly, to the workers. That was their main concern. But, their (workers’) heart wasn’t in work or in any issues like discipline. Since we insisted on maintaining discipline, they did so. Unlike in the earlier period, they now maintained discipline just to please us.”

Many workers also shared this opinion as is borne out by a representative excerpt from a worker’s interview:

Somehow we had lost interest in it (maintaining discipline). Everything looked wrong or seemed like it was going wrong. We couldn’t figure out what was


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happening and were lost. But, many of them (staff) seemed very sincere, and wanted to help us. So, we pushed ourselves to put in some effort (mechanically) . . . just for them [the staff]. (Worker 28)

As time passed, workers stopped trying to maintain any discipline. More-over, as described in the previous chapter, when the payment of wages be-came irregular (due to the growing financial burden), workers increasingly started disrupting work; this eventually took the form of gherao, pelting stones, and manhandling. These developments led to a note from the MD (April 1995) that stated, “The workers are aware of their rights but are not willing to accept responsibilities as owners of the company; while, due to the changed complexion of the company, it is no longer possible to adopt the usual methods of instilling discipline.”

In short, during the turbulent period, initially staff and workers together took disciplinary decisions keeping the unions out, while the unions tried to influence the disciplinary process. Although workers could significantly influence disciplinary decisions and staff voluntarily shared information with workers, the workers lost interest in maintaining discipline while staff became more particular about doing so. It appears that regarding disciplinary issues the workers had some faith in the staff but not in the unions.

However, during the interviews, staff, unions, and workers attributed the reason for workers’ lack of enthusiasm in the disciplinary processes to ir-regularity in the payment of wages. Some representative interview and group discussion excerpts follow:

Again payments were delayed (of wages and salaries). I think this infuriated the workers. The disruption in the work and other incidents were just the aftermath. Look, if the company had been financially sound enough to make regular pay-ments, there would not have been any problem at all. Now, we have become more convinced about the importance of regular payment. What do you think? (Clerical staff 2)

Good point. Were the wages being paid regularly when the work disruption began? (Field researcher)

Yes; actually to eliminate the [labor] unrest, the company tried very hard to make regular [wage] payments. All of us finally work for money, right? When you know you will get your payment if you work, there is no reason to stop working. That is the issue, the default in payment. (Clerical staff 2)

They all were against us as if we had been the trouble makers. They were abu-sive and accused us of looting their money, cheating them with the support of the management, corruption, etc. That was again a very tough time. We had to



literally hide from them. Even the management was afraid of worker protests and rage. That is why in the AUAC we decided not to discuss the IRBI proposal (to reduce wages) with them [workers]. Truly the company did not have any money. But, they were not in a mood to understand this. They just wanted their payment. That is it. If we had had enough money, it would have been another golden period [referring to the stable period]. Anyway, by this time, we had lost the workers’ confidence and any potential to pay them their wages. Even if the workers were told that they would get their wages in time if they put in the work, they would not buy it. They wouldn’t even listen to you. (Union leader 2)

From a group discussion:

We felt that all through they [referring to unions and management] had been lying to us. We were not sure whether we could get our wages at all. We knew that something was going on since the authorities (referring to IRBI officials) were visiting. There were some discussions. Then (unexpectedly) the contrac-tors came in, and we scared them away. (Worker 12)

We think they had started playing their dirty games again, right? [Others nod-ded their heads.] Some of the older workers [referring to retired workers] got their money, but the others didn’t. Why? They paid only the union members. So, they could not face us. They told us that there was no money to pay our wages. They seemed to have enough money to pay their own people and their own contractors. (Worker 13)

So we accosted them [the union leaders] and asked for our money. We worked; we worked sincerely, and we have families to feed. They had to pay; there was no escape. When you ask them, they only have phony explanations! (Worker 14—interrupting Worker 13)

How could we believe their explanations, when some of us saw those guys tak-ing bribes for releasing our own funds? They mishandled our money, giving us all kinds of false reasons. So, we were very angry. (Worker 15)

Thus, it seems that beyond the issues of regular payment, workers were concerned about trust (who and what they could believe), particularly when they perceived the management and unions as untrustworthy. The Managing Director’s note captures part of this issue in relation to the unions: “Multiplic-ity of unions and gradual erosion of workers’ confidence in them have been the main reasons for frequent work interruption.”

Prem, in our conversations, recalled his poignant memory of this period: “I would wake up to see my mother busy cleaning pots and pans, for what, I wondered, for there was no breakfast . . . and lunch was too thin to cook. I was about to rush to the school . . . then papa came in with some friends . . .


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[. . . he is] back home earlier, so, without work, I thought. . . . I strained to listen, and I overheard papa saying to his friends, ‘it’s not just the issue of money . . . but more painful is this puzzle: how could our own people behave like this . . . this is just cheating.’ Rushing to school on an empty stomach, I wondered who these people were and what the puzzle actually was.”

Interestingly, as work disruption gained more momentum, some unions also joined the workers (see the previous chapterfor an overview). They at-tributed the reasons for this act as follows:

Only now did we realize that top management had been manipulating us in order to control the workers. When they told us that we were also decision-makers like them, we took them at their word, and distanced ourselves from workers. This was our biggest mistake, and we paid for it with the loss of worker confidence in us. (Union leader 6)

In sum, during the turbulent period, workers did not trust the unions while they retained their trust in the staff. The lack of trust, perhaps, resulted in the significant reduction in EI, particularly in disciplining, al-though there was significant information sharing around the disciplinary process between workers and management (including staff), and in general, between unions and workers.

As mentioned in the previous chapter, finally this culminated in violent work disruptions, followed by the resignation of the MD and the appointment of a new MD and President. This marked not only the advent of the new lead-ership period but also a new disciplinary process.

Disciplinary Process during the New Leadership Period

The new President initiated changes in the disciplinary process. He tight-ened the disciplinary process right from the very beginning of his tenure. For example, he started moving around in all departments, and openly warned latecomers including staff, union representatives, and workers alike. He suspended on the spot, one worker who was sleeping during his duty hours. In addition, he caught two more workers while they were steal-ing some goods. During group discussions and interviews, many workers narrated these incidents, praising the President’s sincerity in matters related to discipline. Below is a representative narration that a worker presented during a group discussion:

Bhai, you should have been there. Saab [President] is really strict. We want people like him: very strict and very sincere. Right? [Others nodded their heads in affirmation.] Look at how he has caught so many cheats in such a



short period: Shambhu, Ram bhai, . . . and then Tharpan—he is so close to Das bhai [one Union leader]. Shambhu has been stealing things for many years, we suspect with the support of the management; many of us know this. Now, it is our money that these guys are looting. Saab [President] tries to take care of these things well. Also, he knows what to do, and has the guts to do it. He is really good.

In due course, the President unraveled an act of forgery and raised this is-sue in the Board meeting:

One Mr. BM had been drawing wages in the name of another man for the last seven to eight years. This discrepancy was detected when BM was indulging in some undisciplined activities in the mills, and he was punished by the manage-ment. The President sought the Board’s decision as to what action should be taken against BM. After detailed deliberations, the Board decided that since he had worked in the mills, his bonus and wages may be paid. However, no retire-ment benefits in the name of HP (the real employee) should be given to him. The solution worked out was that he may be put off the job for 15 days for his act of indiscipline and may be given a fresh appointment subsequently. He would, however, lose his seniority for all purposes.

In contrast, during the FO period, when a similar forgery had occurred, the management had considered it a criminal offense. The management asked the personnel officer to deal with the case with utmost seriousness. Finally, the person’s employment was terminated without any payment for his labor, and the case was reported to the local police.

In the meantime, the President encouraged the staff to discipline workers and union representatives and assured them of his support. When some staff members took disciplinary action against some workers and union members, they approached the President. However, he clarified that such complaints in which action was already taken by staff would not be entertained after the fact. Also, he neither took the pains to justify or explain his disciplinary ac-tions to anyone nor did he ask or encourage the staff to do so. Yet, only a few staff took interest in taking any disciplinary action.

During interviews, the staff attributed the reason for their apathy toward instilling discipline as the following:

He [referring to the President] would ask us to go ahead and act. But, most of the time, the miscreants are union members, whom we have to work with after all. The President can say anything, and if any problem comes up, he can even leave the company for a better job. That is not possible for us. Also, if any issue comes up, he will have his own way of dealing with it . . . something we don’t have. So, it’s wise not to take the risk. (Supervisory staff 13)


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Look at what he did first. He started disciplining us and the unions. This is a situation where we can lose face. Later we felt . . . let him maintain the overall discipline. (Supervisory staff 11)

He [referring to President] is very clever. He chipped in at the right time. The workers thought or think that the staff cannot discipline the unions. In such situ-ations, it becomes very tough for you to act, right? Then, he comes and shows them (the workers) that he can do it very easily. He has been trying to win over the workers. In this game, why should we be his pawn? We know that workers have the illusion that he is going to save the company and them. So, they work sincerely and maintain the discipline very well. (Managerial staff 3)

As the last quote indicates, staff in general attributed the reason for work-ers’ enthusiasm in maintaining discipline to workers’ confidence in the Presi-dent. Unions also made the same attribution. For example, below are some representative interview excerpts.

Look, you can easily figure out that they [workers] simply believe him [the President]. They look upon him as their savior and also that of the cooperative. So, now they have regained their interest in the work. Yes, he is very capable, sincere, and strict; we too support him. He may prove beneficial to everyone. (Union leader 10)

Whether he is skilled or not, he appears to be so, at least to the workers. They believe him and whatever he says. Look, when he told them that they might not get their wages, they did not create any hassles. He is clever. He seems to have gained their confidence. But, who knows what his intentions are. We want to wait and watch. He doesn’t seem to be that genuine. (Union leader 12)

As the last excerpts mention, unlike staff and some unions, workers main-tained discipline with a high-level of enthusiasm. Below are some examples from my direct observations (as noted in my field notes).

When some workers went on chatting with friends or shopkeepers during duty hours, some of the other workers caught them and took them back to work. This was not done with a view to saving them (the “culprits”) from any disciplinary action by staff. Instead, when I asked them, the workers asserted that they did it in their own interest. Some workers did the same to the union representatives. They tried to follow them, and drag them back to work by putting pressure on them, by talking to them in a friendly but sarcastic man-ner, frequently in public. Some workers, while doing their work, were seen correcting their co-workers.

Since workers were interested in maintaining discipline, many staff mem-bers were using “good” workers to discipline co-workers. For example, when



a staff member noticed that a worker had been working in a perfunctory manner, he directed another worker to ask and help the “apathetic” worker to perform the task properly. In the interviews, many staff members stated that in similar situations during the earlier periods, they had rebuked the “miscre-ant,” and had taken appropriate disciplinary action. Now, they just wanted not to be caught by the President. The easy way that they adopted was asking the workers who showed an interest in maintaining discipline (whom they called “excited workers”) to instill discipline in other workers. However, for workers, the “excitement” seemed a sincere expression of their interest in maintaining discipline and stemmed from the optimism that the President might bring them a bright future. This optimism, in turn, was based on their confidence in the President as the following interview excerpts highlight.

Initially, all of us were apprehensive that saab was going to take us to task. We did not protest out of fear. But, then, we didn’t do our work sincerely. We tried to disrupt the work whenever we could. Later, we realized that he was trustworthy and honest and was here for our benefit. He set an example for us by working hard himself. When he asked us to be good [maintain discipline], he was tough on himself [maintained discipline]. We can believe him. (Worker 18)

All the interviewed workers mentioned the confidence that they had in the President as the basic reason for the revival of interest in their work and in other issues such as disciplinary processes.

He could do what others couldn’t. He controlled the unions. He never discrimi-nates among staff, workers, and union representatives. (Worker 15)

He punished only those who deserved it. Look, I too once got a seating and a severe scolding. (Worker 1)

In sum, during the new leadership period, staff did not show significant interest in the disciplinary process although the President assured them of his support, and signaled it through his acts such as not entertaining any complaints against any disciplinary actions taken by the staff. In contrast, workers’ interest in maintaining discipline increased significantly, although there was less information sharing with regard to disciplinary matters with workers. It seems that workers’ trust in the President was one of the reasons that workers regained their interest in maintaining discipline.

The table below summarizes the variation in EI in the disciplinary process over the decade. It shows that EI alternated between high and low levels during the decade in the case of all three groups, except for staff and unions, during the new leadership period.


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Table 5.1. EI Variation in Disciplinary Processes

Employee group �Period �

Staff Union Workers

Formative (compared to FO) + + +Shramik Samiti (compared to Formative) – – –Stable (compared to Shramik Samiti) + + +Turbulent (compared to Stable) – – –New leadership (compared to Turbulent) – – and +a +

aEI is – and + since unions were divided in their support to the President, and in turn, some of the unions showed high enthusiasm in the disciplinary processes while others were indifferent.

Prima facie, it seems then that the issues central to variation of EI in the disciplinary process were information sharing and employees’ trust in the management and or unions. Keeping the same approach of analyzing the case primarily through the recall of the three main groups’ lived experience—staff’s, unions,’ and workers’—we next take up the PLCC issue.

CASE 2: THE PLANT LEVEL CONSULTATIVE COMMITTEE: THE EMERGENCE AND DECLINE OF A

“DEMOCRATIC DECISION-MAKING FORUM”

This section describes the formation of a new “democratic decision-making forum” (as the MD called it), the Plant Level Consultative Committee (PLCC), as a mechanism for management to share information with workers, and for increasing the potential worker influence on plant level decisions re-garding organizational change. The expressed expectation was that the com-mittee would elicit EI in the organizational transformation. I follow the same chronological sequence that I employed in narrating the story of disciplining, starting with a brief description of organizational communication channels and their use during the FO period.

Organizational Communication Channels during the FO Period

At that time, we were the nerve center of communication between the manage-ment and employees, I mean workers and unions. The unions could meet the management only if we could not settle the labor issues at our level. Of course, there were many committees like works committee, canteen committees, etc. but they seemed to exist only for name’s sake. Neither the unions nor the work-ers were interested in these committees. Some of them would meet when the management forced them to do so. Still, they were quite useful. The manage-



ment could use these committees to get some information from the employees. That is what these were. (Labor Officer 1)

One of the labor officers thus summarized the state of affairs when I asked him about the communication channels during the FO period. However, after the takeover, employees wanted to have a different organizational arrange-ment, which led to the formation of the PLCC.

Formation of the PLCC

During 1988–1989 the change in the economic-legal ownership from family-owned into worker-owned had created a lot of enthusiasm as well as confu-sion for workers. As described in the previous chapter, the idea of equity ownership and shareholding were largely foreign to them. Therefore, many of them approached their unions to gain some clarity, particularly on the possibility of being paid regularly or in other words the financial capacity of the cooperative to pay workers their wages regularly. However, as the work-ers mentioned in their interviews, many of them were not satisfied with the unions’ assurances on this. Meanwhile, some union leaders claimed to have observed some production workers grumbling directly to the MD that the unions were not taking up their issues with the management or representing their interests effectively. Workers further complained that since there was a lack of representation from the production department in the unions, the unions were unaware of shop floor level problems. The minutes of the union committee meetings also recorded this point: “the workers told the union representatives that they were not able to understand technical problems at the top floor level.”

Subsequently, in the meetings of the unions with its members, according to the minutes of these meetings, workers urged that the unions should take along with them some worker representatives from the shop floor when they discussed plant level matters with the management in committees such as the AUAC. Here are some representative remarks from a group discus-sion with workers:

The leaders were unable to understand our problems. They had plenty of other things to do. We did not know or understand what those things were. Sometimes they would share these (information about their tasks) with us. But, bhai, how can we understand all these things? Anyway, we felt that they did not have the time to focus on our issues. So, we wanted people from our department who knew our problems well to speak [on our behalf] with the management. (Worker 20)


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At that time what were your major problems? (Field researcher)

What bhai? Our main concern was the payment of our wages, wasn’t it? (Many in the group nodded their heads in affirmation.) Yes, there were a number of problems; bad roots in (raw) jute, pinion cracks in looms, but we were more worried about whether we would have some money to buy food for our family, not just now, but later too. (Worker 25)

When I asked about this point in the interviews, the majority of the inter-viewed workers mentioned that they had apprehensions about getting timely wages, and consequently, they wanted to take up this issue with the manage-ment. A representative excerpt from a workers’ interview follows.

That is when we felt that we should present our issues to the management. We had no representative from our shop floor in the unions. We had been working hard. Yet we were growing unsure about whether we would get even our wages [regularly]. When we have someone who can really understand our daily issues, they can convince the management and even push them to do something for us. (Worker 30)

Thus, perhaps, workers thought that they would be able to put some pressure on the management, using the PLCC, to get their wages in time. Further, they hoped that some workers from the shop floor would be able to push this agenda well, which they suspected the unions were not doing: “Really saab, we wanted to ask them [the management] about our money, wages, loans, etc. We don’t think the unions were doing this. (Worker 15)

As per the minutes of a joint union meeting, the unions increasingly felt that there was a deterioration of worker confidence in the unions and in the idea of worker cooperatives. Regarding this development and the formation of the PLCC, the MD responded in an interview:

I felt that the staff members and the unions were not competent to develop con-fidence among the workers by convincing them properly (of the need to bear with the irregular payment of wages). So, I thought it would be good to give the workers a chance to influence plant level decisions, and bring their problems to the management so that the workers would be convinced that their issues were heard and this is truly a worker cooperative. . . . You know, this is a big change for each of us. As you may know, the essence of managing change is empower-ment and communication.

The MD’s note regarding the formation of the PLCC describes this point clearly. In the beginning of the note, he expresses his hope that the PLCC, which he calls a democratic decision-making system, would generate confi-



dence among the employees in the management and in the functioning of the cooperative through the discussion of worker issues with the management.

The salient points in the outline of the PLCC that was attached to this note were as follows:

• The PLCC is formed with a view to creating a sense of belonging and con-fidence among the employees in the functioning of the company.

• It should be advisory in nature and recommendatory in function.• It should help in achieving two-way communication and in removing mis-

understandings between the shop floor management and the workers.• It should suggest measures to stop the pilferage of the materials of the

company and other corrupt practices.

Meanwhile, the MD had asked the personnel manager and one of the mill managers to conduct a quick and short study on creating participatory mechanisms. In their interviews, the managers told me that to conduct this study, they went through a few articles published in professional magazines, and spoke with some other managers, mostly in business corporations, and a few union leaders. Note that the workers were not consulted in this process. Finally, the managers came out with a note. The note recommended forming the PLCC, suggesting the following: “such participatory forums would be helpful for the exchange of information between the management and work-ers. In due course, if the forum is used properly to discuss appropriate issues, it will also be useful in redressing workers’ grievances, motivating them to expend more efforts and be more responsible. Hence, gradually, such a fo-rum will serve as a tool to promote workers’ interest in their work and other issues, if utilized judiciously.” The increased interest in work, the managers hoped, “in turn will help to increase the production of the cooperative and thus the businesses.” Based on this study and discussions with the unions and workers, the AUAC (in practice, the MD) finally decided to form a plant level consultative committee.

Subsequently, the MD prepared a note delineating the structure of the PLCC, which was shared in the AUAC meeting and with other managerial staff. The note recommended that “the committee shall consist of 15 members including the chairman and the secretary. Each signatory union functioning in the mills should nominate one member from among the employees of the company to the committee. Similarly, the management should also co-opt four representatives (staff representatives) to the committee. The Managing Director of the company shall be the chairman of the committee.” However, in practice, since the MD was not available most of the time in the plant but had to be at the head office, the mill manager or the personnel manager chaired the meetings.


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Thus, the PLCC was formed in October, 1989. As the MD suggested in his note, each union nominated its representatives including some workers from the production department. The PLCC was alive with discussions about issues such as departmental transfer, production bottlenecks, and retirement policies for plant workers. However, many times, the AUAC took the PLCC recommendations as suggestions and the AUAC (in practice the MD) made the actual decisions. This was particularly true in the case of policy decisions. For example, the AUAC significantly modified the PLCC recommendations regarding the retirement policy for plant workers. It even rejected many PLCC recommendations. However, the management shared the AUAC deci-sions with the PLCC, and the PLCC, in turn, discussed them. Thus, in prac-tice, the PLCC functioned as an information sharing mechanism.

Gradually, the worker representatives started raising the issue of getting their wages regularly. However, based on the interviews and the minutes of the meeting, it seems that the discussions did not go any further. The staff and the unions kept saying that if all the employees worked hard, the coopera-tive would be financially successful, generating profit for every employee to share. As the following representative interview excerpts illustrate, the lack of detailed discussion was partly due to a lack of knowledge about financial matters and partly due to the loss of staff’s and unions’ interest in the PLCC.

The initial months were very good; perhaps, because we did not discuss any dif-ficult issues [referring to payment of wages and financial matters]. I mean things that we do not know much about. We discussed issues like plant operations, production output requirement, etc. Almost everyone participated in these. . . . Then we felt that the PLCC discussions did not have much of an effect. (Managerial staff 10)

Meaning? (Field researcher)

We would recommend something but the AUAC would always override it. There did not seem to be much point in recommending anything. What was the use? Maybe there was some value to the discussions but it was not clear. So, we [referring to staff] slowly lost interest in the discussions. . . . Later, the worker representatives raised the wage issue but by then we had lost the enthusiasm to discuss it. Anyway, we had nothing new to share. The discussion would have been a sheer waste. So, it seemed that (it was) better not to have it at all. This is what most of us felt then. (Managerial staff 10)

It seemed that the AUAC had replaced the old management. We were no more like owners or even staff. The PLCC was a good start, but then it turned out to be just a place for the AUAC to hand out its directives or information about its decisions . . . we lost interest, and then many discussions were just for name’s



sake. We did not care what it meant. Anyway, the PLCC did not meet at all most of the time during the Shramik Samiti unrest. . . . Regarding the wage issues we had nothing more to say; we had lost interest by then. (Supervisory staff 12)

The initial period, almost until the Shramik Samiti started spreading rumors, was very good. We had many discussions around important issues such as produc-tion targets, sales, etc. However, then they started blaming us. We felt that we were being cornered by all. No one was willing to believe us, neither the staff nor the workers. They saw us as corrupt and cheats, and that too just due to the rumors doing the rounds. So, we lost interest in most issues though the PLCC was still under our control. . . . Then some members (of the PLCC) started rais-ing the wage issue, yes, mainly due to the pressure that workers put on them. They [workers] had been asking us about these issues all the time. We ourselves did not have much clarity. And we had nothing more to add. So, we couldn’t discuss these issues much [in the PLCC]. (Union leader 2)

Meanwhile, during 1990, as discussed in detail in the previous chapter, the Shramik Samiti movement was taking shape. As per the PLCC minutes, pilferage and indiscipline had increased significantly. Moreover, in gen-eral, workers were up against the unions and the management. During this period, most times the PLCC meetings were not held. The reason cited for this was general work disruption. Many staff members felt that during that time the unions were unable to control the workers. In addition, the work-ers started complaining to the MD and other staff members that the unions nominated their own committee members or highly committed union mem-bers instead of the common workers to the PLCC. This resulted in many workers perceiving the PLCC as yet another management-union committee and in some cases, even as the management-union coalition’s smokescreen to blind worker eyes to the coalition’s misdeeds. Following are some illus-trative worker comments:

What was the PLCC at that time [in the beginning]? Just their [management and unions] meetings! There was no one from our side. They sent their own members to the meetings, I mean initially. For us, it was just another union-management meeting like they have in Howrah [referring to the AUAC]. (Worker 20)

Initially, all of us were enthusiastic about it [the PLCC]. But, some of us were able to see its true colors only after [Shramik Samiti leader] told us. Anyway, by that time [referring to the Shramik Samiti movement] we felt that they [re-ferring to union-management coalition] were trying to trick us. [The Shramik Samiti leader] opened our eyes to their [the coalition’s] wrongdoings, cheating, etc. When he told us that committees like the PLCC were a trick to cover up all these misdeeds, we believed it. Yes, there was some truth in it. (Worker 12)


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Bhai, they should have included some of us from the shop floor. For many of us it was just another name for the management-union committee. No big differ-ence.. . . Yes, we got it changed later. Then, look, we all had a wonderful time [referring to the stable period]. (Worker 13)

As the complaint that the unions did not send workers from the shop floor to the PLCC gained strength, in the joint union meetings, some of the unions decided to replace their PLCC nominees with “common workers.” By the time the Shramik Samiti was co-opted to the mainstream unions, the unions had replaced their PLCC nominees. As one of the union leaders speculates below, perhaps, the replacement was an attempt to regain worker confidence in the unions.

In the meeting some of us strongly suggested that the unions should replace their nominees, who were known to be adamant followers (of those particular unions), with members particularly from the shop floor. With the Shramik Samiti issue, workers had lost their confidence in the unions. So, it was very necessary for the unions to take such steps. Else, it would have been fatal for the cooperative and for all of us. (Union leader 6)

Some of these confidence-building measures such as the one above and the co-opting of the Shramik Samiti helped the cooperative to move to a more stable period.

The Renaissance of the PLCC: The Stable Period

The PLCC meetings resumed and were once again live with a number of discussions that even extended over many meetings. In the PLCC meetings, the unions also started sharing the information from the AUAC frequently, while in the previous periods, the top management shared AUAC information only when they were present in the PLCC meetings or when such informa-tion was shared through some notes or memos from the AUAC. Thus, as one staff member comments (in an interview excerpt) below, this time the unions seemed to have taken a significant interest in the PLCC.

It could be due to the Shramik Samiti’s allegations, I don’t know, there was a visible change in their [unions’] approach. They started attending the PLCC meetings regularly, would listen to our comments and suggestions, and take them up in the AUAC and with the workers outside the PLCC. Their effort was commendable. I think, they started learning fast during the period after the Shramik Samiti [incidents]. (Managerial staff 3)



Like the unions, workers were also equally active in the PLCC and other committees. Some supporting interview quotes follow:

Many times there were good suggestions [in the PLCC] like ways to bring in the local fabric patterns into our carpet designs, use of some locally designed but effective pinions, some improvements in rooting, etc. They, no, all of us, were very enthusiastic about these. (Managerial staff 5)

Contrary to our expectations during that period, the unions and workers came up with some important shop floor problems and wonderful suggestions. Some of them, we realized, were really very capable. (Managerial staff 8)

The issues of bonus and wages were frequently discussed, as many worker representatives put them forth. However, at the same time, issues about wast-age and production problems also were taken up. Based on an analysis of the PLCC minutes, below I describe some of the most frequently discussed issues to highlight the increase in EI and information sharing and their vari-ous aspects.

At the union members’ and worker representatives’ initiation, many times there were discussions about control of resource wastage that in-cluded unnecessary usage of electricity and water. Some staff members and worker representatives pointed out the possibilities of restricting the use of certain raw materials such as wood for furniture and coal for furnaces to re-duce the cost and the adverse environmental impact. There were also many discussions around increasing both machine and production efficiency. For example, one worker representative initiated a discussion on the deteriorat-ing efficiency of winding looms. In another PLCC meeting, some worker representatives brought up the mistakes in the machine setup and the utilization of the machine. The management representatives agreed to cor-rect them, working along with the workers. The PLCC minutes frequently recorded union representatives’ and worker representatives’ requests for production targets and sales related information.

Another striking point is that during this period, increasingly more and more financial information was shared at the request of worker representa-tives. For example, the PLCC chair gave an explanation regarding disburse-ment and further utilization of funds received from different sources under the BIFR scheme. He also provided an assurance that copies in the local ver-nacular language would be given to the unions, which they could share with the workers. The unions shared some such memos and notes in the vernacular and simplified the language with the workers. Following are some representa-tive worker comments on this change:


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During that time they (unions) paid more attention to us. Many of our problems were discussed even outside the mills. They gave us some notes, helped us understand them, and put some effort into clarifying our doubts. They looked sincere. (Worker 25)

At that time we were satisfied. The leaders were very good. They started spend-ing time with us, here in the plant, that is, they were with us. We could ask them many questions, and they would try to answer them. We would share our concerns with our superiors and our leaders. We knew they could take them up somewhere. Maybe not now, but sometime later, like in the plant meeting [PLCC]. (Worker 19)

In group discussions, the workers recalled that during that time they took utmost care to produce quality products. Some staff remembered that both they and the workers were enthusiastic about the new product mix and there were even discussions about the improvements to the new product mix, identifying new markets, exports, etc. Sometimes workers initiated such discussions. Staff recalled that many union representatives as well as worker representatives used to ask the production staff about their problems on the shop floor, and had taken up these issues in the PLCC meetings. They ap-peared happy about such developments. For example, according to the PLCC meeting minutes, a union representative raised the need for proper sales plan-ning, and stated that this information was to be given to the production staff at the earliest. It was mentioned that due to lack of proper sales planning, the production staff was unable to monitor production as per the demand. During the interview, one of the production staff members had mentioned that he had asked the union leader to raise this issue in the PLCC.

The PLCC minutes pointed to a significant increase in employee in-volvement in their work during this period. For example, there was a com-mendation of the interest of the staff and workers, the cooperation between them—mentioned as “better and constructive.” At the same time, some de-partments were advised to similarly come up “with a better and constructive relationship.” In another PLCC meeting, the committee members praised the willingness of some permanent workers to be transferred to other departments even though they were uncomfortable with the decision and the new tasks were not as pleasant.

In sum, staff, unions, and workers perceived and used the PLCC as an information sharing mechanism. The increased information sharing included various aspects of information sharing such as varieties of issues covered (e.g., sales, production, design, finance, etc.), frequency of sharing (increased frequency), medium of sharing (simplified language, direct sharing), and choice of sharing (voluntary and as per request), varieties of location at which



the information sharing occurred (e.g., within the PLCC, union office, plant, etc.). Workers seem to have started trusting the unions and the management again. Perhaps, mechanisms such as the PLCC might have helped them re-gain their trust. This was associated with an increased involvement of not only workers but staff and unions also.

My young informant, Prem, recalled having seen his father’s happy face every day during this period, though it was not very explicit. He was sur-prised to see this difference. His father was happy if Prem accompanied him on his bicycle to the market and other nearby locations. Earlier, he had overheard the same father talking with his mother in a tense voice about even going back to their hometown. He recalled the fear he had had about not being able to go to school or going to a new school in his hometown. Now, everything looked bright. Yet, owing to past experiences, Prem was skeptical. He wondered how long it would stay so. Prem’s suspicion was realistic as the next section on the PLCC bears out.

The Turbulence and the Subsequent Demise of the PLCC

During 1995–1996 the continuous default in wage payment again brought misery into workers’ lives. Prem recalled that he watched many families in-creasingly buying on credit, vegetables and other grocery items from the local vendors, and there was increased bargaining over the prices. Many times, the borrowing and the price negotiations resulted in friction between the buyers and the sellers, which sometimes even spilled over to the worker families. Prem himself had to attend school without having lunch or breakfast. Because of all these developments, in several PLCC meetings, worker representatives expressed their concerns about their payments, but the Chairman asked them to avoid that issue, reminding them that the committee was not meant for the discussion of these issues. Meanwhile, according to some PLCC members, the workers used to ask them whether they had raised and discussed the pay-ment issue. If the issue was not raised or discussed, the workers blamed the representatives that they had not taken care of the workers’ problems. Work-ers started staying away from the representatives who did not take up the issue of payment in the PLCC meetings. Thus, workers put pressure on the representatives to discuss the payment issue. As the PLCC minutes revealed, the PLCC discussions during this period revolved mainly around three is-sues. In descending order of frequency they were (1) payment, (2) unions’ interference in administrative activities (that included disciplinary actions), and (3) irregular supply of raw materials. The three groups involved in the PLCC—the worker representatives, union representatives, and staff repre-sentatives—raised these issues several times. While worker representatives


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raised all three issues, the union representatives stuck to the first and third issue, and the staff representatives focused more on the second issue.

The three groups were expecting the management to come up with some solutions to all these problems, which the management could not do in an ef-fective manner. Consequently, at least some worker representatives as well as workers in general started losing faith in the PLCC. The following is a worker representative’s comment in this regard:

Management did not keep their word many times. If something was not pos-sible, they should have told us so with reasons. Sometimes, they would agree with us in one meeting, and we would wait for the implementation to take place in the subsequent meetings. But, we found that the implementation of many issues did not happen . . . for example, take the assurance of providing raw jute supply. They couldn’t pressure the government, I think, for any further cut [subsidy] or find alternative sources. (Worker 28)

Many workers felt that neither the management nor the unions were concerned about workers or their issues. An often-repeated comment during the inter-view was “We felt that they were discussing something else in that (PLCC), telling us lies. Neither of them was worried about us, our lives, and our issues (mainly wage payment).”

Based on these developments, the MD and the union representatives perceived that the reasons for the deterioration in workers’ interest (in their work and in the company affairs) were mainly owing to irregular payment. In addition, they felt that more democratic decision-making could re-activate workers’ interest. Union representatives explicitly stated these inferences in the PLCC meetings. For example, thus reads the collective opinion of union representatives in the PLCC minutes:

If wages are paid properly, production will increase since workers would work more earnestly. To increase the production, particular points should be found out where the production is low. Subsequently, the management should call a meeting, and discuss with the workmen of the concerned departments how the performance could be improved.

In another PLCC meeting, the union representatives pointed out that, “de-partmental meetings should be held with line workers, helpers, and selected workmen to sort out problems. . . . The management should listen to the concerned workers. Only regular wage payment and continuous discussion can improve the performance.” Consequently, management held meetings with line workers and some select workers. In these meetings, the manage-ment yielded to many of the worker demands, including the most pressing



one—regular payment of wages. Regarding this point, the MD’s note stated, “To avoid [worker] agitation, the cooperative is compelled to maintain work-ers’ payment in priority over all other needs.” In an interview, the MD com-mented on this issue:

I had thought that if decision-making is made more democratic it will make a big difference. I found that this was not completely true. They [workers] were more worried about their wages. They could not understand the situation. Maybe they needed more training.

Interestingly, neither payments nor “the democratic decision making” process could prevent workers’ involvement from being eroded. Work was disrupted many times. The weekly meetings of the PLCC were not held from 22 July 1995 to 27 August 1995 (almost one month). The issues discussed in the subsequent PLCC meetings reflected the concerns over the deterioration of workers’ trust in unions, conflict between unions and staff.

For example, in one meeting a worker representative pointed out that many union members were taking wages without doing any work. He asked the management to urge them to work regularly. He stated that otherwise it would be difficult to urge other workers to work. Subsequently, many PLCC members expressed concern over the growing distrust between workers and unions, and between unions and management (meaning the entire staff). There were repeated requests by worker representatives for information regarding production targets that fell on deaf ears. According to some staff members and union representatives, gradually, the PLCC became a stage for the staff and the unions and workers to fight with each other. Many times, union representatives pointed out that the decisions of the meeting were not implemented and that the top management acted contrary to the PLCC rec-ommendations. However, the worker mass was not concerned about what was happening either to PLCC decisions or to the PLCC itself.

Finally, as described in the previous chapter, citing the reason that the PLCC became a forum for fights between the workers and the management (including staff), the MD annulled it in 1996. When asked about the demise of committees such as the PLCC, the then MD replied:

The real problem was the lack of penetration of a cooperative vision. Most of the union leaders played leadership roles to achieve social status before the employees. They were not sincere and honest. Many senior staff members were also not competent enough to handle a cooperative, and we could not bind everyone with the strong values of the cooperative or the cooperative’s vision due to lack of time and training. This germinated mistrust and the bind-ing force became feeble.


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However, staff attributed the reason for the loss of their interest in the PLCC (and work) to lack of top management’s confidence in them, unions’ holding them accountable for issues beyond their control, and unions’ attempt to control staff through the PLCC. Some illustrative comments follow.

The story was the same. Again, they [unions] wanted to play boss [to us]. PLCC was just a means for that. Then we opposed (unions playing boss). The opposi-tion slowly turned into a fight. Unfortunately, we felt that we did not get any support (in this fight) even from the top. The top management was more con-cerned with the unions and workers. So, we had no support, not even from the workers. We explained (our decisions and actions), we helped all these people [referring to workers and unions] but then they should reciprocate. They had done so in the beginning but not anymore. (Clerical staff 2)

The PLCC became a place to dump some responsibility on us. Then they would ask in the next meeting and we had to update. What are we then? The unions were not responsible. They had to be responsible first. Look, they resumed their cheating and corruption and that cost them the worker support. They [work-ers] turned, in the end, against these guys. Worse, the company could not give wages regularly (to the employees). So, the meeting [PLCC] had no meaning for workers. It was all just for name’s sake. The unions should have understood that many of the things they asked us to do were beyond us. I mean, they knew it. But, then, they started acting like leaders in front of the workers. The unions would go and declare in the AUAC that we had promised to do something in the PLCC. Then when it was not done, the management would think that we were incapable. The workers would think that we were dumb. Then, no one had any confidence in us. (Managerial staff 21)

The main problem for the workers and even for us was the lack of (regular) payment. Then, see, the unions’ and some staff members’ dubious acts brought back the workers’ doubts. I think they [workers] were never really convinced (about the liabilities of the company and unions’ and management’s honesty). They just pretended (that they believed). They were worried about their wages, the possibility that their money could be snatched away; then there were rumors about the mishandling of dues, PF, etc. There were all kinds of stories about corruption. Had there been enough money for payment or even proper payment (of wages), all these would not have been an issue. It is true that some unions and staff favored some people. Anyway, they [workers and unions] lost inter-est in all the committees and other activities. Workers even turned violent. The unions should have developed worker confidence. Then, committees like the PLCC would have worked well. (Managerial staff 16)

Thus, while staff members attributed the reason for decreased worker involvement primarily to lack of sustained payment and impaired trust, the



unions attributed it to lack of management’s skill in getting workers their wages regularly and their unwillingness to yield to worker control. Illustra-tive interview excerpts follow.

The issue is that they [management] should have listened to workers from the beginning itself. They would declare in the PLCC that they would do so and so, and then when workers asked, we had to tell them that it was not done. Even when workers had some suggestions, they [staff or management] would pretend to listen to them. They were unwilling to implement any of the suggestions. They want things under their control. Cooperative is different. . . . Then the main issue was that even the Board [of Directors] couldn’t find ways to make prompt payment [to the workers]. They could press the state [local government] or even other parties to avoid default in payment. This is what we felt. They were not able to do so. That was the real issue. (Union leader 4)

We should have more avenues for worker voices. We had some like the PLCC. Then, they [staff] wouldn’t really care for worker voice. Anyway, if we had had some means to sustain the payment, everything would have been fine. Even top management couldn’t do anything in this regard. We needed people with better skills, (and) then we could have been more successful. Look at the [current] MD. He has that kind of skill, like the skill to find new markets and generate some money. So, we will be better off. But, I don’t know if this is good enough. (Union leader 7)

Workers made sense of the PLCC and its demise slightly differently, their main concern being regular wages, which they linked to trustworthy unions and management.

During the early days [referring to the stable period], all of them [unions and staff] were good, sincere. Look, we had the PLCC. They helped us with many things, explained many things to us. There was no distortion (in the explana-tions). But, then we again heard about their cheating. We ourselves faced problems. When you asked for some loan for your daughter’s marriage, you were not sure whether you would get anything. They would tell us that we would get something; finally, you wouldn’t get even your money [wages]. You work and you get nothing. Then, if you are close to some staff or unions, you can get something. . . . So we demanded that these things should be discussed in the meetings [PLCC and other meetings]; but they would do something else altogether and come back to tell us lies. (Worker 20)

If we had got our payment, we would have worked (sincerely). We did not know if we would get anything at all; we just worked. How could we live? How could you feed your children? (Worker 2)


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But, you said earlier that your wages were paid for many months even when there were protests, right? (Field researcher)

Yes, but, then how do you know that you would get it later too? Look, all this had happened earlier [consistent and regular payment of wages]. Then, there were problems again. These guys mishandled the funds and all of us lost our money. The same things were recurring. We know from our own experience . . . they would assure you and then they would steal it secretly. (Worker 2)

Most of the interviewed workers replied in the same manner. It seems, then, that their doubts in the honesty of the union and the management heightened their apprehension that they would not get their dues or even their wages in future. They did not find either the management or the unions reli-able in this respect. They felt that top management along with the unions was mishandling finances and they felt that this was the reason why the workers were not being paid promptly despite achieving the production targets. How-ever, to eliminate such suspicions, the management and the unions (workers) explained the financial status of the cooperative in the PLCC and to workers at large. Following is an excerpt from a group discussion:

Look, we worked hard. They told us (as a result) that we had done very well. So, we must have got a lot of money, right. Then, where is it now? Where did it disappear? (Worker 20)

Did you get any answer from the plant meetings? (Field researcher)

Yes; they said, we have huge debts. Maybe we have. But, then if they did not cheat, that [debt] wouldn’t be much, right bhai? [Others nodded their heads in affirmation.] But, earlier in the meetings they were good, they would discuss our issues. But, then they started all the mischief. They wouldn’t want to discuss those things, right? (Worker 10)

Yes; yes; see, they would tell us half-truths. It’s like Yudhishta7 during the battle, you know? They appear honest, but then they would hide something. Then, the meetings were all so . . . to tell us half-truths. (Worker 13)

(Interrupting) They couldn’t believe us; else they would tell us everything, right bhai? [The others nodded.] They did the same thing some time ago. How can we believe them now? They could tell you all kinds of stories when they come back from the meetings. (Worker 14)

(Interrupting) Bhai, proper payment for some time is okay. But, what about future payment—we don’t know. How could we believe that we would get our



dues and wages in the future, with these people cheating us, right? [The others nodded.] Then, what is the need for committees? (Worker 13)

Thus, according to the workers, the lack of sustained wage payment was the main reason for the decrease in their involvement in the PLCC and their work. They also blamed the dishonest dealings of the unions and the manage-ment for the delay in the payment of wages. More importantly, for workers, their lack of trust in the management and the unions generated an uncertainty about consistent future payments. This uncertainty, in turn, led to a decrease in their involvement. Hence, to understand the dip in EI, we need to explore the variation of worker trust in unions and management. I explore these points further with the next case that focuses on the increase in workload.

CASE 3: THE WORKLOAD INCREASE: AN EXPERIMENTATION WITH REGULAR

WAGES AS THE WORK MOTIVATOR

Over the decade (1987–1988 to 1997–1998), NCJM reduced the number of its employees from 11,200 (1987 level) to approximately 7,400 [1998 level]. Consequently, the workload per employee increased. There was also a re-distribution of workload. This section details how the three groups—staff, unions and workers—made sense of and responded to the workload increase and the changes in the manning pattern during the cooperative period and the implications thereof. There was no significant attempt to increase the work-load during 1987–1992, the formative period. The first significant attempt to increase the workload occurred in 1993, which is roughly the beginning of the stable period.

Worker Involvement in Workload Change during the Stable Period

As mentioned in the case background (see the previous chapter), it was in March 1993 that the operating agency of the revival scheme, IRBI, proposed a reduction in employee numbers in its review meeting with the management and the unions. It insisted that without such a step, the scheme would not be financially viable. The IRBI suggested that restructuring the workload would cut down employment costs and increase the operational efficiency of the co-operative. In line with these instructions, the cooperative started restructuring its workload in December 1993.

As the MD had suggested in the AUAC meeting, the initial step was a dis-cussion with the staff and worker representatives. The union representatives


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brought up the issue in the next PLCC meeting. They emphasized the need for work restructuring, particularly reduction of employee count, and said that it was mandatory, since the IRBI had instructed the cooperative to do so. Meanwhile, the top management had a talk with the concerned higher offi-cers, while the unions discussed the issues with the workers stressing the need for workload change. The unions convinced the workers that for the survival of the cooperative, and in turn of the employees (most workers interpreted employees’ survival as consistent future payment), workload change was necessary. After repeated discussions, most workers agreed. Meanwhile, the top management had been articulating the required changes with the help of the staff, which they documented as a proposal.

The Proposed Changes

The management identified the following possible changes, and informed the unions about these changes, giving them a copy of the proposal in the AUAC meeting.

1. Employment of contingent contract labor (as opposed to permanent or ca-sual employees) in the export yarn section, the decorative fabric weaving section, and sack sewing section. This measure involved the employment of 550 persons on which the calculated saving in wages8 and other em-ployment costs was about 65 percent. This was equivalent to a reduction of 300 permanent employees.

2. Incorporation of a product development center under the quality control department. The anticipated consequence was an increase of the quality control department’s workload by 50 percent. The MD had discussed this restructuring with the quality control staff, and had convinced them about the change. After this, the MD informed the unions in the AUAC meeting.

3. Reduction of the man-machine ratio from 1 to 0.5 in the production de-partment by increasing the number of looms to be operated by a worker from one to two.

The AUAC discussed all the proposed changes. According to the minutes of the AUAC meeting, the union representatives did not make any changes in the proposed draft, citing the reason that these were all technical matters in which the staff had more competence. After the AUAC meeting, the MD prepared a note for the staff and union representatives, specifically assuring them that the savings from the workload changes would be utilized initially for capital expen-diture and subsequently for gradual reduction of employee-based dues. These steps, the employees thought, would lead to prompt and consistent future pay-



ment of wages and salaries. Meanwhile, the union representatives informed the workers about the proposed changes. However, now, workers opposed the de-cision to increase the workload. Due to lack of time and constant pressure from the IRBI, the unions and the management did not have the time to change the workers minds. Instead, management, with the help of the unions, went ahead with the plan of workload change, and began the implementation in 1994.

Implementation of the Changes

During the implementation phase, both staff and unions worked in unison, and expressed significant interest in implementing the changes. Some exam-ples based on company documents, minutes of union meetings, and employee interviews follow.

In most cases, the restructuring initiatives resulted in increased workload for the staff. Thus, they had to take up more responsibility without any ad-ditional pecuniary or other tangible benefits. Staff members held informal meetings in each department, and subsequently settled on the share of respon-sibilities that each one would take.

We discussed the plans in groups. . . . Most people seemed enthusiastic . . . we were also happy that the implementation details were left to us . . . we discussed some of these issues with the union leaders as well . . . finally, it worked quite well. (Managerial staff 13)

Not that everyone readily agreed to assume the additional responsibilities . . . there was some opposition. But, they also yielded when they saw others volun-tarily agreeing to cover for them . . . even union leaders were ready to take up any additional job or responsibility. (Managerial staff 16)

As seen in the interview quotes above, during interviews, most staff mem-bers said that these meetings worked very effectively since only a few refused to take up more responsibilities. After finalizing the distribution of responsi-bilities, the staff generated a plan that described each additional task, the staff member responsible, and his/her responsibilities. The taskforce submitted its report to the respective heads of each department. In the case of readjusting the manning pattern of workers, the staff finalized the departmental transfers to be made and the allotment of new/additional jobs to workers, etc., after discussing these matters with the union representatives. During these discus-sions, many union representatives agreed to take up additional tasks, and they did so as promised.

Having heard about the finalization of the decisions to implement changes, workers once again conveyed their disagreement to the union members (in


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union meetings and informal conversations) and staff (in informal conversa-tions). At this stage, the unions started holding meetings with workers, both formally and informally, in the worker colony. They informed workers about the assurance of future payments by the MD, and explained how workload changes would improve the financial health of the cooperative. Then, the production workers suggested that instead of operating two machines, they would work harder to increase the production from one machine itself. They also opposed the need for any redeployment. The union representatives tried to convince the workers that if they wanted wages on time, they had to con-cede to the workload changes. In addition, they showed some papers to the workers demonstrating that they had discussed various alternatives with the central trade union leaders,9 and found no other viable solution. Finally, the workers yielded. The implementation had already started while these meet-ings were going on. Workers had also approached the staff to clarify their doubts regarding the benefits that the workload change would bring about and the assurance of future payment.

Even though workers had opposed the changes earlier, subsequent to all these meetings, they took interest in workload change implementation. For example, the PLCC minutes documented the praise for some permanent workers’ willingness to be transferred to new departments and/or to take up additional or new tasks, which was challenging given the absence of any training program and their advanced age (average age being 45 years). As the union meeting minutes documented and the interviewees reported, the unions had clearly told the workers that those who were transferred to new jobs had three weeks’ time to pick up the new jobs. During interviews, some union representatives disclosed that actually the management and unions had colluded to transfer some rebellious workers to tough jobs. Yet, these workers did not protest but toiled earnestly to pick up the new skills. When the new workers had some difficulties in the new jobs, other workers took special care to train them. In addition, the workers who were earlier unwilling to help the contract employees started helping them gradually.

However, the cooperative could sustain this high level of employee in-volvement in workload change for no longer than a year. Prem had a color-ful picture of his father’s (a worker) and some unions members’ experience related to the workload increase during this turbulent period as described in the following section.

The Downturn during the Turbulent Period

Prem and I continued to spend time with each other. He had come to regard me as a confidante and he felt quite comfortable with me now. While sitting



next to me on a cement bench under a banyan tree, Prem seemed to be lost in his thoughts. I was wondering what was passing through his mind. At the same time, I was growing a little nervous about the long silence of about five minutes amidst the rackety sound of bicycles passing by us. By this time, I was used to Prem’s long silences. Sometimes, he would lapse into them thinking of something, or perhaps trying to collect his thoughts. Normally, I would just sit with him and share in his silence. This time, however, he had a vacant stare that alarmed me slightly. I shook him gently and asked him, “My dear friend, Prem, tell me something. What is going on in your mind?” And he resumed talking with me. “I told you earlier, right, bhayya (brother), about Tharpan uncle. (Prem had narrated to me the thick friendship between Tharpan, a union leader, and his father). In the evenings, sometimes, they [Tharpan and Prem’s father] would sit there (pointing to a muddy dwarf wall) and chat for some time. Those days, I remember, there were a couple of more people like Charan uncle and Praveen uncle [both were union leaders]. One day, I started just biking around them, alone. You know, I just hated joining the other boys; I just don’t enjoy it.” Prem went on to explain what the other boys did in the evenings and why he did not like to join them. I was more interested in what he had heard of the conversation between the elders, so I steered the conversation in this direction. He continued, “So, I was keen to listen to their [his fathers’ and the union leaders’] conversations. My father was telling them that at his age if they asked him and his friends to work on two machines, it would be very difficult. Then, Tharpan uncle told him that if he wanted to give his family a good life, he had to agree. There was no other way. You should have seen my father’s face. He was so lost in thought that his face was devoid of expression. Maybe, you know, he was thinking about me, the money he had been spending on me and my brother, mama, and all. Then he asked them if they had discussed the matter with anyone else. They showed him some papers and then they mentioned some names that I was not familiar with.”

Prem recounted these names and I realized he was referring to the names of the Central Trade Union leaders. Prem continued, “I couldn’t hear much of the conversation well. So, I went home to drink water and then came back to see what they were doing. When I came back, I heard my father asking them repeatedly whether it meant that all of them [workers] would get their wages regularly. They said yes, and that delighted my father. He assured them that he would also discuss this with his other friends. He then had many discus-sions with Shankar uncle, Shamboo uncle, and others (colleagues of his fa-ther). Then onward I found them increasingly happy. For many months, they looked very cheerful. They would greet me. Tharpan uncle would visit my father now and then. They had a nice time. Then, you know, one day I found


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my father quarreling with Tharpan uncle. At first, it was a sort of mild teas-ing. They met near the vegetable market. I was somewhere near. My father called out to him [Tharpan] and told him, ‘You put us in trouble. Look what has happened, now, it has become very difficult to buy daily groceries. We have no money left.’ This teasing went on for some time.”

Prem then proceeded to narrate various incidents that finally led to an altercation between Tharpan and his father that showed the mistrust between the union leaders and the workers, and the management and workers, par-ticularly regarding the sustained payment of wages. Prem continued, “I was feeling so sad for my father. He is very sincere, I know, he has been so. He loves us. But, then Tharpan uncle and all the others are good men. However, by this time, they were no more good friends. I still remember that in some of the last conversations [that Tharpan had with his father and others], they [union leaders] were telling my father and friends that if they did not care for Tharpan uncle and his friends’ suggestions, the company would close down soon, and all of us would be in trouble. However, from my father’s and others’ response, I figured out that they didn’t take it very seriously. They did not believe the other uncles. My father and friends were, maybe, naive. Look, then all sorts of trouble and violence followed. I wish, I really wish, I could have made both of them understand, and if they could work together again. But then, I am just a boy. They didn’t even know and even now they don’t know that I know these things.” After this long narration, Prem sighed. I could see the relief on his face. He kept on smiling at me.

During 1995–1996, as Prem recalled and I have mentioned earlier, the payment of wages became irregular. Moreover, the workers had doubts regarding the handling of finances by the top management and the unions. They accused the top management and unions of using workload change as a trick to increase workers’ workload. The workers felt that it had not helped the cooperative achieve any further growth and that their expectations of being regularly paid had not been met. Workers started losing interest in the work and grumbling about the increased workload. In the PLCC, worker representatives were not interested in discussing the workload change issue. Rather, they repeatedly stated that the workers had some demands that the management should discuss with the workers outside the PLCC. They held such meetings as a pre-condition to discussing workload related issues in the PLCC. At this stage, the MD thought that if more workers were given the chance to participate in workload change implementation, it would stimulate workers’ interest. As a result, management held a few meetings with more workers. In these meetings, workers put forth their demands but when management asked workers’ opinion about further reshuffling and an increase in the number of looms, they protested and showed no interest in



having such a discussion. For example, the minutes of management’s meet-ing with shifters and sliver feeders documented workers’ demand for more facilities (for meeting workload increase/change) such as (1) iron plates on damaged floor, (2) extra hard carts, and (3) sufficient number of sliver cons (a particular type of spindle on which cotton threads are wound). However, when it came to discussions about the changed responsibilities, workers did not show any interest. Although many staff took pains to convince the work-ers that the workload change had led to some progress that was beneficial to all employees, the workers did not pay much attention. They were more concerned about their future payments.

Gradually, the unions also lost interest in the workload change while staff retained their interest. For example, in the case of reducing the man-machine ratio further (for example, by increasing the number of looms handled by each worker at a time), the unions did not show much interest in eliciting workers’ cooperation as they had done in the earlier time frames. In the AUAC meeting, the MD had requested the union leaders to take up this issue with workers and discuss it in detail in order to get their feedback. He men-tioned that depending on workers’ feedback, they could subsequently deal with IRBI’s suggestion to increase the workload further. The unions agreed that the man-machine ratio in NCJM was below industry norms. However, they lost interest in changing the workload again to increase the efficiency of the company and were not willing to discuss the issue with the workers.

The union leaders attributed the loss of their interest in workload change to their feeling of being manipulated by the top management. Some union lead-ers attributed it to the loss of workers’ confidence in unions and the later mis-trust between workers and unions. Some illustrative interview quotes follow:

By this time we felt that we had just been pawns in the top management’s hands. The management in general had been using us to control workers and get the company to function smoothly. Smooth functioning is necessary for all of us. But, then, if you feel that you have been used, it is not comfortable. That makes you lose steam, right? We could figure this out only toward the end. So, you can see, then, we also joined the protests. (Union leader 2)

As it had happened earlier, they [workers] again lost confidence in us. We couldn’t perhaps deal with them properly. But, you know, we have been dealing with them for years. During the [family owners’] time we had no problem in understanding them [workers]. Look, all of us are workers. We are not different. We are all the same. But, then, I don’t know how this happened. They stopped believing whatever we said. Then we also started losing interest. If they don’t trust you, how can you discuss the workload increase with them, which they were opposing [that time]? It’s impossible. Then, we were growing suspicious


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about whether the top management would sustain its support to us, particularly when the workers turned against us. (Union leader 9)

Regarding the workers’ opposition to workload increase, the union mem-bers felt that it had to do with the inability of the management and unions to provide any assurances to the workers. Below are some illustrative in-terview quotes:

By this time they were unsure if their hard work would fetch them any money at all. They had lost that faith. Yes. Neither the management nor we could create that confidence in them. We tried our level best, we tried to convince them, share with them whatever pieces of information we got, but we failed miserably. They [workers] would work only if they were sure that they would get their wages. It is a little selfish, but you know, none of us has such great family back up in terms of financial resources to make that sacrifice. You have to understand it. (Union leader 7)

Earlier, they believed that if they worked hard it would give them enough money [to live on]. That certainly showed up in their sincere work. But then, by this time [referring to the turbulent period], they just lost that confidence. They didn’t believe anyone. We spent a lot of time with them explaining the situation as well as the consequences if we didn’t increase the workload; they would pre-tend they were listening, but then they wouldn’t agree or they simply refused to understand. They were very adamant. (Union leader 4)

Although the increased information sharing by the management and the unions helped to increase workers’ involvement in the beginning, later when the workers started perceiving management and unions as untrust-worthy, the information sharing sounded hollow. Some illustrative inter-view excerpts follow:

Look, bhai, in the beginning, they [unions and management] did not hide any-thing [mainly information] from us. They explained the issues clearly, and took pains to make sure that we understood them well. We felt it. . . . Look, they told us how much money the company got from the agency (referring to BIFR), how much we had spent, how much was in the form of loans [temporary loans of the employees], etc. So, when they told us that only if we accepted the increase [of the workload] the company would prosper and we would get our wages on time, we believed them. So, we took interest in our work. But, then we see them again shirking duties and misusing our money. . . . So, now, we never know, even if one puts in the effort, whether one will get any wages at all. (Worker 10)

That time we believed that they [the management and unions] would not hide anything intentionally from us. They might make some mistakes; okay; but



not intentionally. They assured us that we would get our wages on time; yes, we should wait; fine. But, then they started misusing our money. What does it mean? They increased our loads, and then wanted to steal our money secretly, telling us lies. They told us a lot, but all lies. So, who can believe their assurance of (future) payment? (Worker 16)

In sum, both workers and unions showed significant interest in the work-load change during the stable period. However, both of them lost this interest during the turbulent period. Although both management and unions shared a significant amount of information about the workload change with the work-ers, contrary to the management’s and unions’ expectation, it did not lead to increased EI. The unions attributed the reason for the dip in their interest to a feeling of being manipulated by the management and the loss of workers’ confidence in unions. However, workers attributed the reason for the decline in their interest to the uncertainty around future payment of wages, which in turn, they linked to their trust in unions and management.

Interestingly, in the period that followed, the new leadership period, we can see just the opposite of what had happened to the relationship between infor-mation sharing and EI during the turbulent period. Although the management did not share much information with the workers about workload change and other issues, workers exhibited a significant increase in their involvement in workload change and other organizational issues.

The Revival: Worker Involvement in Workload Change during the New Leadership Period

Manpower reduction and workload change were continued in the New Lead-ership Period. The Board of Directors instructed the President to retire 500 workers in a phased manner commencing from 22 May 1997. The retire-ment initiative increased the workload of the remaining workers who were retained. The maximum personnel who were retired were from the security department. Other affected departments were office (clerical staff) and pro-duction (workers). Simultaneously, the Board resumed drafting a proposal for continuing a workload change exercise. The main objective, as per the Board minutes was to increase the work efficiency of the cooperative.

Following were the main changes that the Board suggested during this period.

1. Reduction in the man-machine ratio by increasing the number of looms that one worker had to handle from 2 to 2.5.

2. Rationalization10 of manpower through retirement and redeployment of personnel.


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The Board made the President responsible for carrying out the proposed changes. Subsequently, the President discussed his implementation plan in the AUAC meeting, and elicited the unions’ suggestions. Union members made only a few minor suggestions that the President accommodated in his plan. Subsequently, the AUAC finalized the implementation plan.

The Implementation Process

As per the plan, the officers in the quality department had to conduct a pilot work-study (which the Board had suggested). The objective was to identify the workers who were not operating at 90 percent productivity level and the looms and spinning frames that were running at a lower efficiency (less than 80 per-cent) due to lack of maintenance of the machinery. Meanwhile, the President once again elicited the unions’ suggestions on the implementation plan in a joint union meeting. Suggestion-cum-complaint boxes were installed in the plant to elicit workers’ opinions and suggestions on workload change and other company issues. In addition, the President asked the workers to inform their HODs and/or union representatives if they wanted to be transferred to some other department. Cooperation from the workers’ side was remarkable.

Many suggestions as well as complaints were posted. Some workers sug-gested redeployment of the workers in the Machine Manufacturing Division (MMD) to the production department since work in the MMD was less. Further, these workers themselves elicited the MMD workers’ consent, and coordinated their transfer to the production department. Workers posted a few suggestions on how to reduce the cost of production by modifying some work methods, by balancing workload across machines and departments (workload balancing) and to increase the income of the company by utilizing its own assets. An interesting example is the suggestion to sell fish available in the four ponds in the company premises. Besides this, some workers gave their consent to be transferred to the departments where more workers were required. In addition, despite being informed that their performance was be-ing evaluated, workers gave full cooperation to the earlier mentioned work-study. Thus, during the President’s tenure, there was a significant increase in employee involvement in workload change. However, compared to the workload change efforts in the earlier periods, during this period, there was significantly less sharing of information with workers regarding workload change. Hence, it is important to examine the potential reasons for this sig-nificant increase in worker involvement in workload change. The following interview excerpts reveal the reasons that staff perceived.

He (President) is such a great orator that he could easily convince the workers. Somehow, they believed him and continue to believe him. When he said, you



work hard and then you get money, they just believed him. If they were assured of their money, they would put in the efforts. (Managerial staff 10)

Look, this has been their logic always. If you pay now, I will work now. If you can’t pay now, I won’t work now. It’s very simple to understand. . . . But, when he [President] tells them to do so, they just obey, mostly. I don’t know, maybe he is too intimidating or skilled in convincing them, just like our politicians. Many of them consider him their savior. They just took him at his word when he assured them of their wages. (Clerical staff 1)

In short, the staff perceived the President’s convincing assurance of future payment as the key to an increase in worker involvement in workload change. The unions repeated this reason.

I think they believe that they will get their payments regularly. They just be-lieve his words. It was the same story in the beginning of the cooperative. They believed us. Then we lost their confidence when we couldn’t generate enough money (to pay wages). (Union leader 12)

Somehow, now, they got a feeling that their payment was assured. He [Presi-dent] could convince them so. But, I am not sure how long it will last. Now, they have been paid for some time, so the President will not have to worry. It is the MD who toiled (for making regular payment). Now, let there be a default (in payment), and then he [President] will see their true colors! They will lose confidence in him, I bet! (Union leader 2)

From these conversations, it might appear that belief (or lack of it) in future payment alone was the single factor driving variations in worker involvement. However, as described in the previous chapter, later, during the President’s tenure, the cooperative could not pay worker wages regularly for almost three months. Yet, contrary to the predictions of many employees, not only was there no disruption in work, but there was also no significant difference in worker involvement in organizational issues such as workload change.

Given this contradiction, it is even more interesting to understand varia-tions in worker involvement from the workers’ viewpoint as I do next using some representative interview excerpts.

I told you earlier also, Saab [President] looks honest and hardworking. Look, he comes to the company earlier than everyone else, and starts working from then until everyone else leaves. This is unlike our union leaders. Saab could also be like them, right? He doesn’t do so. You can see it for yourself. Then, if he asks you to work hard, you have got to work, right? He sets an example. He told us that he also doesn’t get money [payment] when we don’t; yet he works, so, you’ve got to work, whether you get money or not should not be an issue. (Worker 11)


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You are right [responding to the field researcher’s question about whether the workers had got any wages for the past few months]; we don’t know whether we will get money [wages] even if we put in hard work now. Look, we didn’t get money for a few months, right? That is okay. He [President] told us that he would try hard (to get regular wages) but he is not sure. He couldn’t assure us (future payment). But, we know he will try his best. Then, how can you stop working hard? He does what he says he will do. (Worker 20)

As these quotes illustrate, perhaps, for workers, the assurance of future payment alone was not a significant factor for increasing their involvement in work and other issues such as workload change. It seems their involve-ment in workload change and other such issues was contingent on a feeling and a perception of the trustworthiness of the management and unions. The President’s interview also points in this direction:

My gut feeling is that just payment alone may not be the issue. They are looking up to you but you have to be one of them. That creates a bond, a trust between you and them. If they oppose you, let it be. They may have a reason for their op-position. So, you’ve to listen and see what and how you can build on their points. . . . See, when we suggested increasing production workers’ load, they suddenly suggested transfer of MMD (workers). We thought that they were resisting the workload change. So, I told them that that was not a good idea but assured them that we would get back to them. Whatever you think, if you don’t want to lose them, you then have to get back to them, and we did. We realized that they had a point . . . when we told them that their idea seemed fine, they volunteered to take care of it . . . thus they gain some confidence in you, and in the cooperative.

If building this trustworthiness is an important factor as the workers’ and the President’s interviews suggest, then it is important to find out the signifi-cant indicators of trustworthiness. I will explore this point in the next chapter, after examining below whether this point holds good for other cases that we have explored so far. In other words, in the following section, I will compare the three cases to understand the emerging pattern. Before doing so, as I did with other cases, below, I summarize the main points of my exploration of EI variation in workload change.

Worker involvement in workload change experienced a rise and fall during the stable and the turbulent periods consecutively. Subsequently, it increased again during the new leadership period, the President’s tenure. Paradoxically, with the increased information sharing regarding workload change during the turbulent period, unexpectedly worker involvement in workload change fell. In contrast, with reduced information sharing regarding workload change, worker involvement rose during the new leadership period. Although it seems that the uncertainty around future regular payment of wages was a key driver



of the EI variation, an equally plausible or perhaps more significant driver seems to be perceived and felt trustworthiness of the management and unions.

Similar to the case of workload change, as I summarize next, in other cases as well, worker trust in unions and management and management’s and unions’ information sharing with workers seem to influence EI, creating some variations in it. Interestingly, there is a lack of linear association be-tween information sharing and worker involvement. This means an increase (or decrease) in information sharing may not lead to a corresponding increase (or decrease) in EI; instead, the opposite may happen, increase in information sharing may be associated with a decrease in EI. A brief summary of each case given below highlights these points.

SUMMARY OF CASES

First, in table 5.2, I summarize the variation in the involvement of unions and workers in the three issues over the decade 1987–1998.

The table clearly shows that there were swings in the involvement of unions and workers over the decade. Based on the preceding analytic description of the three cases, below I summarize the significant factors or themes that emerged in relation to the variation in employee involvement over the decade.

In the initial formative periods, as the company transitioned from family ownership to employee ownership, the transfer of ownership from the family

Table 5.2. Variation in EI between 1987 and 1998

Disciplinary Processes

Employee group �Period �

Union Workers

Formative (compared to FO) + +Shramik Samiti (compared to Formative) – –Stable (compared to Shramik Samiti) + +Turbulent (compared to Stable) – –New leadership (compared to Turbulent) – +

PLCC

Shramik Samiti (compared to Formative) – –Stable (compared to Shramik Samiti) + +Turbulent (compared to Stable) – –

Workload Change

Stable (compared to FO) + +Turbulent (compared to Stable) – –New leadership (compared to Turbulent) – +


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owners to the employees generated enthusiasm and involvement in various organizational issues such as disciplinary processes and PLCC. Scholars of worker cooperatives describe this sudden surge in EI as a honeymoon effect (Blasi 1989). However, the awareness about the transfer and its implications were confined to unions and the management. It had not percolated down to the workers yet. Instead, the workers were left to figure it out themselves. Gradually, unions and management started sharing more and more infor-mation with the workers, sensitizing them about the change in ownership. This increased information sharing seems to have generated worker trust in unions, management, and the cooperative. Workers seem to have believed that the unions and the management were reliable, and would protect work-ers’ interest. Associated with such increase in information sharing and trust was an increase in employee involvement, particularly worker involvement (see column two of table 5.3).

Table 5.3. The Emerging Central Themes

Period �Issue �

FO to Formative

Formative to Shramik Samiti

Shramik Samiti to Stable

Stable to Turbulent

Turbulent to New Leadership

Discipline aIS+, Trust+, EI+

IS+, Trust–, EI– IS+, Trust+, EI+

IS+, Trust–, EI–

IS–, Trust+, EI+

PLCC IS+, Trust+, EI+

IS–, Trust–, EI– IS+, Trust+, EI+

IS–, Trust–, EI–

Non-existent

Workload change

Non-existent Non-existent IS+, Trust+, EI+

IS+, Trust–, EI–

IS–, Trust+, EI+

aNote: Acronyms—IS=Information Sharing, EI= Employee Involvement

However, as the cooperative moved to the following period, notwithstand-ing the increased information sharing regarding disciplinary processes, work-ers’ trust in the unions and the management, and in turn their involvement in the disciplinary process reduced significantly, particularly during the Shramik Samiti movement. Perhaps, this dip in involvement was contagious—EI in PLCC also came down, and subsequently the information sharing between the two groups regarding PLCC related issues diminished significantly.

During the stable period, related to all three issues—discipline, PLCC, and workload change—there was a significant increase in information sharing. This was associated with increased trust among unions, staff, workers, and between workers and management. These two factors seem to have resulted in increased EI.

We see a turnabout in the following turbulent period. Overall, there was a depletion of worker trust in the management and unions and unions’ trust in the management. Although there was significant information sharing between the management-union group and workers around disciplinary



matters and workload change, this did not yield an increase in EI. Quite contrarily, EI decreased significantly.

Surprisingly, during the following period of new leadership, despite re-duced information sharing between the management and workers, worker involvement in disciplinary matters and workload change was significantly high. Compared to the previous period, the significant difference was the high level of worker trust in the management, particularly the President. Thus, worker trust could be a critical factor that might explain the surprising relationship between information sharing and EI. This suspicion gains more strength if we notice the two other instances (see, table 5.3: row 1 column 3 and row 1 column 5) that I have described above, wherein increased informa-tion sharing between the management-union group and workers was associ-ated with decrease in EI and depleted employee trust (in either the manage-ment or the unions or both).

The table (5.3) thus suggests a strong positive association between em-ployee trust (in the management, unions or both) and EI, irrespective of variation in information sharing. It encourages us to suspect a weak positive association between trust and information sharing, and between information sharing and EI. This conjecture is interesting since the received wisdom on employee involvement in managing organizational transformation or broadly organizational change as well as on employee involvement in employee-owned organizations (such as worker cooperatives) in general suggests the opposite (Aoki 1993; Morgan and Zeffane 2003; Innocenti, Pilati, and Peluso 2011). Thus, this research suggests that in managing organizational change effectively, managers should share information with other employees to in-crease trust, which in turn, would elicit and sustain EI in the change process. Therefore, exploring the role of information sharing, employee trust, and variation in EI is theoretically promising, and has practical implications. In the next chapter, I explore the role of information sharing and trust in elicit-ing and sustaining EI in organizational change, since they turned out to be the central themes across the three cases that can generate theoretical and practical insights into the dynamics of transforming an ailing family-owned business into a worker cooperative through collective efforts.

NOTES

1. All italicizations are mine. I italicize certain phrases or words within an inter-view excerpt or other kinds of data to highlight them.

2. Saab is a Hindi word meaning boss.3. Bhai is a Hindi word meaning brother.


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4. Since bhai is a Hindi word meaning brother, in this context, it indicates that I was considered a close friend almost like a brother.

5. Workers physically manhandled the Shramik Samiti leaders and threw stones at them. The intention was not to demonstrate brute force or vengeance, but more to demonstrate a judgment of their perceived lack of ethics.

6. I crosschecked this narration with the staff and the worker concerned.7. “Yudhishtara” is a cultural reference to a mythological character in the Hindu

holy epic, “The Mahabharata.” Yudhishtara, the Crown Prince, was known for his strict adherence to the truth and was upheld as a role model of truth and upright-ness. During one of the holy wars that he fought, in order to defeat the enemy, the only way to weaken the enemy was to lie to the enemy’s war strategist/guru and to weaken their morale. Yudhishtara was placed in a moral dilemma—on one side were his values of truth and uprightness—on the other side was victory and he was stuck in a catch-22 situation. After much deliberation, Yudhishtara found a solution for his moral dilemma by finding a middle ground and carefully won the battle by telling a series of partial truths and leaving out several important details. In this way, he cleverly maintained his own values of truth and did not lie outright, yet he had to maneuver information cleverly in a way that involved avoiding all information that involved telling a lie.

8. As of December 1994, the wage for a permanent worker was INR 145 per day while for a contract worker it was only INR 50 per day.

9. Central trade union leaders are the top echelons at the State level and National level Trade Union secretariat. In general, workers had kept these leaders in high esteem.

10. Rationalization of workforce refers to the layoff of workers in a strategic man-ner to increase the efficiency of production in that particular department.


105

Chapter Six

The Tangled Tapestry of Information Sharing and Worker Expectation1

The analyses across the cases that I presented in the previous chapter pointed to the need for further exploring the role of both information sharing and worker trust in the management and unions, in eliciting and sustaining EI in organizational transformation efforts at NCJM. In this chapter, I explore this point, examining how the management and unions attempted to elicit worker involvement in organizational transformation. Subsequently, I also examine how worker cooperatives such as NCJM can sustain a high level of EI. Of the five questions that I posed in the first chapter, these are the two remaining questions that need to be explored.

At the outset, note that worker cooperatives are formed with the express idea that they promote workplace democracy through worker ownership. Thus, according to the existing literature, worker ownership remains among the “most promising devices” of institutionalizing workplace democracy (Paton 1989; Russell et al. 1979). However, evidence suggests that employee ownership by itself does not automatically lead to a high level of continuous employee involvement (Gunderson et al. 1995; Pierce et al. 1991). Thus, this study is in the context of a legal-economic arrangement that claims to privi-lege workplace democracy yet may not automatically result in workplace de-mocracy. The previous chapters suggest that the role of trust and information sharing may be the link between a participatory legal-economic arrangement and the outcome of workplace democracy in terms of increased EI.

THE CONTESTED TERRAIN OF INFORMATION SHARING

In the case of NCJM, it appears that variation in EI, particularly worker in-volvement, occurred around information sharing and employee trust in the


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management, as documented in the previous chapter. During the formative period, workers had to try and understand the “new way” of functioning on their own. The codified nature of the legal and financial intricacies involved in the transformation of a family-owned company into a cooperative under-taking (Batstone 1979) as well as the mistrust laden sociopolitical situation prevailing in the industry (see chapter 2 and chapter 4) resulted in confusion and skepticism. Although the management and the unions shared information with the workers, including the information that workers were looking for, paradoxically, it did not evoke workers’ interest in work.

On the contrary, it seems that suspicions about the veracity of manage-ment’s and unions’ explanations led to the Shramik Samiti disturbance and work disruptions. This development further resulted in eventual manage-ment reluctance in sharing “sensitive” information such as financial details. In contrast, during the stable period, even while the conditions of the jute industry remained precarious (for details, see chapter 2 and chapter 4); NCJM was commended as a “model” for employee involvement by the local media (Bartaman 17 January 1993; Hindustan Times 13 June 1993) and research scholars (Bhaumik 1992). Compared to the previous period, the significant observable difference during this phase was in the man-ner of information sharing among the management, the unions, and the workers—the management was more sensitive to the workers’ need for specific, simplified, and open information.

The management distributed explanatory notes on how the funds that the cooperative obtained from various financial institutions were utilized. In ad-dition, the management also distributed joint memoranda addressing work-related and other organizational issues in the local vernacular language among the workers. The management also encouraged the discussion of such issues through informal channels such as after work discussions in the workers’ col-ony. Yet rumors about the financial mishandling and behavior of some of the union members and staff members again raised doubts about the functioning of the cooperative in the workers’ minds. However, these initiatives gradually re-sulted in arguments about disciplinary decisions and acts, frequent walkout by the workers from the PLCC meetings, strong opposition to workload change, and subsequent work disruptions during the turbulent period. Thus, during this time, not only did the increased information sharing not lead to increased EI, but instead, to the management’s surprise, there was a significant drop in EI. Interestingly, during the following period, the New Leadership Period, we find the opposite pattern. Although the management, particularly the President, did not share much information regarding disciplinary processes and workload change with the workers, workers showed a high level of involvement in these issues as well as enthusiasm in their work. Thus, as indicated in the previous


The Tangled Tapestry of Information Sharing and Worker Expectation 107

chapter (see table 5.3) and explained so far, the relationship of EI with infor-mation sharing was intriguing. Therefore, prima facie, information sharing seems to be a “contested terrain” (Edwards 1979) around which waxing and waning of employee involvement happened at NCJM.

INFORMATION SHARING AND WORKER INVOLVEMENT

One central element of participative institutions is sharing of information (Cornforth et al. 1988; Lawler 1989). Authors have been advocating “open book management” (Davis 1998), that is, sharing the state of financial health of even conventional enterprises with employees including frontline workers, for enhancing organizational commitment (Case 1996). It is suggested that while authority based organizations thrive on limiting the flow of informa-tion for “efficiency” purposes, democratic organizations can function only if information is freely available, particularly information about the activities of the management (Pendleton, Wilson, and Wright 1998; Pierce, Rubenfeld, and Morgan 1991; Varman 1999). Based on a large sample in 37 Employee Stock Ownership Program (ESOP) companies, Klein (1987) found that the communication to employees regarding ESOP is one of the factors that led to satisfaction. When reluctant managers in Belgium’s worker councils with-held management level information from the workers after World War II, the workers withdrew from further attempts at participation, and the system essentially died (Potvin 1958). Bernstein (1976) stresses sharing management level information as one of the essential components to sustain employee participation in organizational activities.

Information helps in building the larger perspective of the employees, in the sense that they get a wider view of the organization and the impetus behind organizational change. A number of studies on organizational change have highlighted the critical role of information sharing, conceptualized as communicating organizational change, in eliciting employee involvement in organizational change in the context of both limited-ownership corpora-tions (Lewis 2007; 2014) and worker cooperatives (Ng 2009). Strauss (1988) mentions that the management in US worker cooperatives offered informa-tion regarding various organizational activities to even unions at the time of adversity. More importantly, in worker cooperatives, the practice of sharing information with employees has the potential of keeping in check the activi-ties of the management and holding them accountable to the owners of the company, that is, the employees in general. Thus, it facilitates the emergence of a worker voice that could influence the process of transformation, enabling a more democratic participation (Deetz and Brown 2004).


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Yet, there is a fear that too much information may lead to inefficiency, as workers may end up wasting their time in analyzing the information. Moreover, they may not even have the ability to understand all the tech-nicalities involved (Cornforth et al. 1988). It may also lead to leaking out “company secrets”! Such arguments have two implications: (1) they create and legitimize management’s right to keep information to itself, and (2) they presume a privileged view that management knows what information workers would need, and in turn, what workers could legitimately expect in case management is willing to share information with them. However, as Legendre (1983) brings out in his case on Parisian office workers, there can be a mismatch between information that workers expect and that the management provides.

Again, the above-mentioned arguments with regard to workers’ ineffi-ciency to analyze the information that the management provides in particular, assume that management has the expertise (and in turn efficiently processes the information) while workers don’t. Batstone (1979) highlights the power-laden nature of experts and expertise and argues that the whole discourse of experts may be in such a manner that it, in fact, may lead to greater concentra-tion of power in experts’ hands as organizational structures are democratized. He stresses that certain expertise may need to be “decodified” and made amenable to lay people for implementing true democracy in worker coopera-tives. Since Batstone’s work, many scholars have supported this argument and pointed to the need for demystifying and simplifying “technicalized” information (Whyte and Whyte 1991).

Rothschild and Whitt (1989) explore the “organizational dilemmas” that democracy brings to a “collectivist organization” as opposed to a bureaucratic organization, which has fundamentally different standards. Based on case studies of five cooperative workplaces, they present nine structural condi-tions that facilitate “collectivist-democratic modes” of organization, and yet each of them represents a significant organizational predicament. Rothschild and Whitt (1989) emphasize the role of mutual criticism that can curb politi-cal inequalities and build morale as well as the role of diffusion of technical knowledge. According to them, information sharing leads to common under-standing and facilitates building loyalty in the group and commitment to car-rying out the objectives of the organization. They also stress that collectivist organizations and democracy can be promoted by demystification and diffu-sion of knowledge at the workplace as well as in society.

The point that emerges from the literature and that the NCJM case study signifies is that information sharing is a crucial issue in the process of build-ing up employee commitment and EI, even in a worker-owned organization (see figure 6.1). Yet the moot question remains—what needs to be the na-



ture and content of this information and how should it be shared to sustain employee involvement?

The NCJM case analysis suggests that evolving employee expectation of information sharing is the missing link in understanding the relationship be-tween information sharing and employee involvement.

It is not that no information sharing was occurring during the later turbu-lent period. In fact, the information channels were in place and were live with discussions on issues such as employing contract labor, utilization of funds, workload change, etc. However, the nature and content of information sharing and employees’ expectation regarding such information sharing was different from that of the previous periods. There were considerable disparities in the expectations vis-à-vis information sharing between the management and the employees. The primary contention here is that expectations are dynamic by their very nature and a mismatch or gap between the management’s expecta-tion from workers through information sharing and workers’ expectation of information sharing evolved over the course of time at NCJM.

MANAGEMENT’S EXPECTATION OF INFORMATION SHARING

The management perceived the committees and meetings as a platform for sharing information so as to enhance worker interest in work (but not beyond work). For example, recall that during the formation of the PLCC, when the MD asked the personnel manager and one of the mill managers to conduct a quick study on creating participatory mechanisms, the managers had sug-gested the following: “such participatory forums would serve as a tool to pro-mote worker interest in their work and other issues, if utilized judiciously,” which “in turn will help increase the production of the cooperative and thus the business.” Based on these “primary grounds,” they advocated instituting participatory mechanisms “for exchange of information between the manage-

Figure 6.1. Role of Information Sharing in Creating Employee Involvement


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ment and workers” and to “redress their (workers’) grievances.” Again, in his interviews and notes, the MD indicated his expectations that the formation of the PLCC as an information sharing platform (or mechanism) would increase worker enthusiasm in work and other organizational issues. Similarly, most staff articulated the expectation that the changed style of disciplining from the earlier times of disciplinary action without discussing with workers to consultation with workers and convincing them of the disciplinary actions would reflect “as an increased worker interest in work.” Again, a similar “management-oriented” approach is evident in handling the issue of work-load increase. The unions feared that discussing such an issue with workers at an early stage would invite their protest. However, the management perceived that unless workers were convinced about this issue, they would resist it and further disturb the work setup, and hence asked the unions to hold frequent meetings with workers.

It appears then that the management considered information sharing pri-marily as an instrument to elicit worker involvement. Many conversations with the management and staff repeatedly illustrate such instrumental think-ing on participation at the NCJM. For example, recall the management’s and staff’s response to the work disruptions that occurred even after the manage-ment shared information with the workers significantly. As the personnel manager put it succinctly in an interview (reproduced from chapter 4), “since we openly discuss even the financial issues with them (workers), to that extent at least they should cooperate with us, if not as owners.” This manage-ment expectation of immediate reciprocity in terms of EI is evident in other instances also. For example, subsequent to the Shramik Samiti movement, when workers’ involvement in organizational issues such as disciplinary pro-cesses and PLCC went up, the staff interpreted it as reciprocal gesture to the effort they had invested in sharing information with the workers.

Interestingly, staff felt that the lack of worker involvement was the rea-son for the drop in their interest in disciplinary matters during the Shramik Samiti movement. Thus, on the one hand staff interpreted the Shramik Samiti movement as an unethical disturbance that pushed workers to violate the norm of reciprocity (in terms of worker involvement corresponding to staff’s information sharing). On the other hand, they (as well as the MD) claimed to have learned from the Shramik Samiti movement and other work disruptions that workers needed more “education” and “training.” Recalling the staff comment that characterized the Shramik Samiti movement and other such work disruption as a “bad thing” that workers did due to “ignorance” about the norm of instrumental reciprocity (e.g., “we explained . . . so they should reciprocate . . . that didn’t occur . . . means they need training”). Thus, the management (including staff) expected that sharing of information would



lead to greater worker involvement in organizational issues and in turn, result in enhanced productivity and quality at work.

When this expectation was not met within a particular period or imme-diately after the sharing of information, the management was disappointed with the worker involvement. For example, look at the variations in staff involvement. Whenever information sharing did not show up as an increase in worker involvement, there was a reduction in staff involvement. They justi-fied this reduction as a response to the lack of reciprocity from workers and/or unions in terms of their involvement, even after the staff shared informa-tion with them. Thus, it seems that the management expected reciprocity to its sharing of information with the workers in terms of an immediate increase in worker involvement. This development is again reflected in the mill manag-ers’ and the personnel manager’s remarks that the General Manager endorsed in his note to union leaders: since workers were given chances “to influence plant level decisions” and to have “free discussions” with the management and staff, the management expected that “workers would take up their re-sponsibilities as owners to increase throughput.” Thus, the management has immediate instrumental expectations from the information that they share.

In sum, for management, information sharing was a means to elicit worker and union involvement. Based on this instrumental logic, management developed the following expectation. To the extent it shared information, in particular the information that it considered sensitive such as financial information, with the workers and unions, workers and unions should have exhibited involvement in their work and other organizational issues such as disciplinary processes, the PLCC, and workload change. Further, manage-ment also expected such worker involvement soon after information sharing.

Contrary to these instrumental immediate expectations, the management often found that “workers . . . are not willing to take up their responsibility for increasing the production,” though even “higher-up matters” were being shared with them. This gives rise to the following question. Why did worker involvement not rise to or sustain itself at a level that the management ex-pected, even when the management shared information with workers? A close examination of the worker expectation of information sharing across the three change efforts may help answer this question.

WORKER EXPECTATION OF INFORMATION SHARING

In the beginning, gate meetings and worker participation in the disciplinary process helped create the requisite atmosphere for positive engagement, in spite of early suspicions. According to most workers whom I interviewed and


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the PLCC minutes, as workers began participating in the PLCC, they devel-oped two expectations. These expectations were (1) they hoped to get more clarity about the functioning of the cooperative, and (2) more importantly, they also expected the management to be willing to openly share the prob-lems regarding employees’ investments, funds flow, wage payments, produc-tion targets, sales information, and so on. These expectations were not met, as the management was not willing to discuss these issues. The disappointment took the form of protests and work disturbances culminating in the formation of the Shramik Samiti. For example, recall how the Shramik Samiti leader de-scribed his motivation to form and lead the Shramik Samiti movement. When he felt a lack of sharing of information regarding issues such as employment of contract labor, the possibility of making regular payment of wages, and future work for regular employees that had significant implications for them (and therefore he expected the management to discuss these with employees), he initiated the Shramik Samiti movement. His stated objective was to protect himself and others from the potentially undesirable consequences of manage-ment decisions on such issues. The Shramik Samiti leaders and members took the lack of discussion or information sharing regarding such important issues as a lack of management’s trust in workers.

On the other hand, as the interviews, group discussions, and the minutes of the various meetings indicate, initially, many workers interpreted the willing-ness of the management to form the PLCC with a promise to share plant level information, as a sign of the management’s trust in workers. However, when worker representatives put forth issues such as wage payment for discussion, the management did not want them to discuss the financial aspects. Matters got compounded due to the prevailing situation, where the unions and staff members were getting financial allowances for attending meetings and some of them were not regular in attending to their shop-floor work. Though the management and the unions later attempted to retrieve the situation by shar-ing information regarding financial issues with the workers, the latter took them to task for lying and hiding information.

As most workers expressed in interviews and group discussions, it was only after the co-optation of the Shramik Samiti and briefing by BIFR rep-resentatives and the Shramik Samiti leader that workers were reassured of certain happenings, particularly propriety in financial matters, at the higher levels. Thus, the Shramik Samiti disturbance stopped only after workers were convinced of the truthfulness of the information that the management and the unions shared with them before the Shramik Samiti disturbance. During the New Leadership Period, the management created a different image in the minds of workers through various instances, such as the catching of forgery, unbiased disciplinary actions, and open sharing of information regarding



difficulties in paying wages regularly. Workers interpreted these actions as the signals or indicators of the President’s competence, honesty, openness, and concern (for workers) or in other words2 trustworthiness (Mishra 1996; Whitener et al. 1998). Such trustworthiness seems to be one of the keys to the cultural transformation that Blasi et al. (2003) suggest as a requisite condition to produce better firm performance in the case of employee-owned organiza-tions. Melman (2001) consider sacceptance of such trustworthiness or mutual trust—“the shared belief (or confidence) in the honesty, integrity, reliability and justness of the men and women with whom decision making is shared” (p. 435)—as a core value of workplace democracy.

This acceptance of trustworthiness is evident in the way workers re-sponded to the President’s suggestions and implementation of workload increase. Unlike in the previous exercise of workload increase, the majority of workers who were present in the gate meeting conceded to the workload increase without any resistance. Subsequently, many workers contributed with their efforts even when the President informed them of the chances of irregular and delayed wage payments. They interpreted this open shar-ing of information as an expression of the President’s trustworthiness. The results of my case analyses that I presented in the previous chapter and have summarized below (see tables 6.1, 6.2, and 6.3) reveal various aspects of this trustworthiness that the workers expect of the management and unions through their sharing of information.

The results clearly indicate the significant influence of workers’ percep-tion of management’s and unions’ trustworthiness (the various dimensions of trustworthiness being competence, concern, openness and reliability) on the variation in worker involvement in the three representative organizational change efforts at NCJM.

Equally important is the pattern of workers’ perception of unions’ and management’s trust in workers in relation to management’s and unions’ in-formation sharing (or its lack) with them. It seems that workers took manage-ment’s and unions’ open (or distorted) and honest (or dishonest) information sharing (or lack of it) as a signal of management’s and unions’ trust (or its lack) in workers. Therefore, for workers, trustworthiness—the concern for understanding worker problems and expectations, subsequent open and hon-est information sharing, reinforced with consistent action (refer to tables 6.1, 6.2, and 6.3)—is a manifestation of the trust that the management and the unions repose in workers. Thus, for workers, as our discussion highlights, and tables 6.1, 6.2, and 6.3 illustrate, information is in the nature of a symbol, an indicator that the management cares for workers and their opinions. More-over, information has to be consistent with actions as well, in order to elicit worker trust in the management. Thus, the worker expectation of information


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sharing is management’s trustworthiness, wherein information sharing is a gesture of management’s trust in workers. This expectation is contradictory to management’s instrumental expectation of information sharing: a recipro-cating worker involvement.

In sum, the management-union-worker information system had gone through progressively new mechanisms and channels in order to deal with the changing situation and expectations. It began with gate meetings by the unions, taking workers into confidence in the disciplinary process, the beginning of the PLCC, formation and co-optation of the Shramik Samiti into the AUAC and the PLCC system, and the initiation of a suggestion-cum-complaint box by the new President. Yet, they were clearly inadequate

Table 6.1. The Main Factors Affecting Worker Involvement in Disciplinary Processes

Periods Factors

Formative Period (1987–1989)

EI+

Workers’ feeling of economic-legal ownership; Workers’ belief in the unions’ and management’s assurance regarding the bright future of the cooperative � Reliability and concern of unions and management

Disconcerted Period (1989–1991)

EI–

Workers’ belief that the management, unions, and staff were hiding some secrets regarding workers’ economic-legal ownership since they did not believe workers � Openness of unions and management (questioned); Workers’ perception of management’s and unions’ lack of trust in them

Workers’ found inconsistency between unions’ words and actions regarding discipline � Reliability of unions (questioned)

Stable Period (1991–1994)

EI+

Workers’ belief that union and management became honest about the dealing and handling of finance � Honesty of management and unions

Open information sharing by BIFR supported by unions and management, which workers saw as a signal of unions’ and management’s concern for workers and trust in them � Openness of BIFR; concern of unions and management; Workers’ perception of management’s and unions’ trust in them

Turbulent Period (1994–1996)

EI–

Workers’ belief that the unions and management were telling them lies regarding financial matters particularly payment of wages since they did not trust workers � Openness of unions and management (questioned); Workers’ perception of management’s and unions’ lack of trust in workers

New Leadership Period (1996–1998)

EI+

Workers’ belief that the President would take care of their interest in disciplining � Concern of the President

Workers’ belief that the President would keep up his commitment to the workers about the payment �Reliability of the President


Table 6.2. The Main Factors Affecting Worker Involvement in the PLCC

Period Factors


EI–

Workers lost the belief in the PLCC representatives (unions) that they would take up workers’ problems in the PLCC as they had promised since they did not have any concern for workers � Reliability and concern of unions (questioned)

Also, workers’ feeling that the PLCC representatives would not care about their (workers’) interest � Concern of unions (questioned)


EI+

Workers believed that unions were taking up workers’ problems as they (unions) had promised �

Reliability of unionsWorkers believed that unions took care of their interest �

Concern of unionsWorkers believed that the information shared through the

PLCC was undistorted since management and unions trusted workers � Openness of unions and management; Workers’ perception of management’s and unions’ trust in workers


EI–

Workers’ disbelief in unions’ explanations about the handling of financial matters like the investment of the workers in the cooperative, the pension fund etc. � Openness of unions (questioned)

Additionally, the workers believed that the information shared through the PLCC was distorted � Openness of unions and management (questioned); Workers’ perception of management’s and unions’ lack of trust in workers

Table 6.3. The Main Factors Affecting Worker Involvement in Workload Change

Period Factors


EI+

Workers believed that the top management would keep up its commitment to them � Reliability of top management


EI–

Workers felt that the management and unions were giving them distorted information since they did not care for workers � Workers’ perception of management’s and unions’ lack of concern for workers


EI+

Workers believed that the President was capable of taking care of the “payment problem” � President’scompetence

And that he would take care of workers’ interests � President’s concern

And that he shared information about chances of irregular payment since he believed in workers, and was concerned about them � Workers’ perception of President’s concern for workers and confidence in them.


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in eliciting continuous worker involvement. This happened due to the mis-match between workers’ expectations of information sharing vis-à-vis the management’s expectations of information sharing that evolved over time. This mismatch generated contradictory information sharing-expectation loops, two different loops for management and workers respectively (see figure 6.2), which I explain next.

INFORMATION SHARING—EXPECTATION LOOPS FOR MANAGEMENT AND WORKERS

As happened during the formative period as well as at the start of new initiatives (e.g., workload increase), in the beginning, the management may share information with workers about the organizational change and change efforts in many ways. At NCJM, these included (1) creation of

Figure 6.2. Contested Terrain of Information Sharing between Management and Workers at NCJM



new communication channels such as the PLCC, (2) change in style of disciplinary process from top-down disciplinary action to consultation, and (3) increased involvement of unions and employees in the decision making processes regarding workload increase at different levels such as the policy level and the daily operational level. However, the underlying instrumental expectation will be reciprocity of worker involvement, particularly soon after management’s information sharing with workers (refer figure 6.2, box # 1). This instrumental logic underlies much of the practitioners’ and aca-demicians’ discourses on organizational change (Deetz 1992). For example, in the context of organizational change, organizational communication or information sharing with employees regarding change is advocated as a tool to enhance EI (Thomas et al. 2009; Zatzick and Iverson 2011) and to avoid “undesirable” worker responses such as cynicism toward organizational change (Reichers et al. 1997). However, as we have already seen, for work-ers, information sharing may be a gesture of management’s trust in work-ers (refer figure 6.2, box # A). Thus, as the experience at NCJM indicates, contrary to management expectations, worker involvement may not happen in quick succession, which the management may interpret as lack of worker involvement (refer to figure 6.2, box # 2).

Information sharing initiatives may encounter the apathetic attitude of workers, as happened during the initial phase of workload change and during the Shramik Samiti disturbance. Although the implications and the modalities of the proposal to employ contract labor in the textile division were discussed a-priori with worker representatives and workers, workers still did not take any interest either in that particular issue or in their own work. Instead, they joined the Shramik Samiti disturbance and subsequent work disruptions. As Welsh et al. (1993:73–74) point out, “even though workers had been afforded opportunities to express themselves in the past . . . these workers may have been frustrated by what they perceived as a facade of participation, and they reacted negatively when again submitted to an intervention that asked for participative input.” Hence, information sharing per se may not act as an immediate incentive to increase worker involvement. Rather, even if infor-mation is shared, workers may still simply continue with their old style of functioning. Or, as pointed out by a shop-floor worker, and Prem’s narratives of the discussion between his father and union leaders consistently show, it may be that the workers “did not understand the need itself for increasing workload,” though the management and the unions discussed the “compelling need” with the workers. Again, as seen in many instances in the NCJM case, workers may also find it difficult to process information and make sense of it (Pateman 1970) or they may simply distrust the information provided (Fox 1974) (refer to figure 6.2, box # B).


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As Neill (1960) points out, in the case of worker-owned organizations, workers might also have been testing the management as to whether the management was consistent in its deeds, and whether they were willing to share the information (which earlier was the privilege of the management only) openly (without exception) and honestly (without distortion). For ex-ample, during the formative period in NCJM, workers seemed to be testing the willingness of the management to share financial information. However, at a later date, when the management and the unions actually shared such information with them, workers dismissed it as “phony.” Sometimes, at workers’ requests, financial matters were discussed and explanatory notes were distributed to them. However, the union members’ behavior, such as deliberately shirking work in the name of meetings and striking “secret deals” with the management fed into the atmosphere of suspicion. Workers noticed the inconsistency between the professed intentions of the man-agement and unions and their actions. This observation deepened worker distrust. Recall the often-asked question that workers posed during many group discussions and interviews: how could they believe unions’ and man-agement’s explanation, when some of them saw management and/or unions taking bribes for releasing workers’ own funds?

Thus, workers interpreted management’s and unions’ acts as mishandling of workers’ money, and the subsequent explanations that the management and unions gave as simple lies or at best half-truths. Workers also felt that this had happened because management and unions “had no faith in us.” This indicates that workers had been not only interpreting management’s and unions’ information sharing with them as a signal of the management’s and unions’ trust in workers (refer to figure 6.2, box # A) but also testing the management’s and unions’ trustworthiness (refer to figure 6.2, box # B). However, such trustworthiness is precarious, given the prevalent hierarchy in society and the actual power distance even within the cooperative (Fox 1974). This point is particularly important in the Indian context since India is as-sessed high on power distance (Singh 1990). Moreover, as mentioned earlier, for information sharing to be effective as a signal of trust, information has to be consistent with the actions as well.

Yet, on the obverse, if management expectations of worker involvement and worker productivity are not fulfilled, it may lead to withholding of infor-mation by the management and further breakdown of the positive loop that had just begun because of information sharing (refer to figure 6.2, box # 3, 4, 5). Recall that during the Shramik Samiti disturbance and the later part of the turbulent period, when the “work disruptions” and “lack of interest in work” continued even after the discussion of some contentious issues in committees such as the PLCC, the management became reluctant to share further details



(especially financial) in the PLCC. Such situations may eventually result in a deadlock of communication between the two parties as happened in the cancelation of discussion forums such as the PLCC. While management may make an accusation that workers do not respond to the information shared, for workers, as mentioned earlier, it is more of an issue of gesture and a signal that management perceives their opinion as important and trusts them with information that earlier they were not privy to. However, even if the “right” signals are given, it is not necessary that they immediately bring tangible actions as results. Given the history of suspicion and lack of trust between management and workers, and the distance in hierarchy, it may be some time before managerial gestures lead to an actual change in worker behavior. The point is that participation has its own “costs” as well for a worker, like carry-ing the psychological weight of the company, inter-personal conflicts, never-ending meetings, and so on (Cornforth et al. 1988; Rothschild-Whitt 1979). This is another reason why management’s gestures may not immediately result in corresponding positive feedback from workers. One of the new roles that Cornforth et al. (1988) propose for managers in cooperatives is that of an “educator.” For instance, they relate that the management accountant in one of the cooperatives that they had studied put in a lot of effort to simplify the accounts so that they became comprehensible to a worker. However, it was only two years later that he was able to say: “Now people are speaking about it (accounts) as if it is (their) second nature.”

Hence, management must take account of the phase lag between their ac-tions in institutionalizing structures for worker involvement and the actual positive effect on worker behavior. Authors of studies on worker owned organizations have stressed the need for a special commitment by manage-ment in institutionalizing organizational democracy (Bernstein 1976). For example, Varman and Chakrabarti (2004) have discussed the need for or-ganizational slack in institutionalizing democratic processes. The difficulty is that such slack is often not available to those cooperatives that have been formed by “reluctant entrepreneurs” (Paton 1989) primarily to save their jobs, which is the case with NCJM. Yet once they are formed, and given that they may continue to be in a difficult situation, it is important to stress that there may be a significant change in workers’ expectation of the man-agement. The complication is that, in spite of the change in their expecta-tions, workers may continue apparently to behave in the same manner as before the transfer of ownership! One of the ways in which such organiza-tions, which otherwise are in a tight situation, may be able to create slack is through continuous information dissemination, even if all the information is not immediately translated into action, and even if workers are not com-petent enough to process it and make sense. The information disseminated


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may become more of a symbol that management trusts workers and may play a role in changing worker behavior in due course. Moreover, since for workers, information sharing is a symbol of trust that management reposes in the former, the information that workers consider critical assumes more importance. As pointed out earlier, this calls for a fine sensitivity and con-cern from management regarding worker expectations of the nature and content of information to be shared with them. However, this brings us back to the second aspect that this case study signifies—the evolving nature of worker expectation, which I describe next.

THE EVOLVING NATURE OF WORKER EXPECTATION

To begin with, workers’ expectations might be only that the cooperative runs as an economic entity, which makes “profits” and “saves” their jobs. How-ever, as gradually the idea of their changed status sinks in, both individually and collectively, workers may demand more influence and more information, such as “fund distribution,” “details of financial handling,” and so on. Yet the difficulty remains that if there is a lack of commitment from manage-ment, given the limitations of worker skills and competence, frustration may quickly set in, which may lead to distrust and withdrawal by the workers. For instance, at NCJM, the Shramik Samiti disturbance itself was an offshoot of the workers’ disappointment with the PLCC. Also, during the turbulent pe-riod, when the management did not show any interest in discussing financial matters with the workers, for the workers it was a reflection of the manage-ment’s lack of interest in “considering” workers’ views and “discussing our (workers’) problems.” The result was “a growing distrust between the work-ers and the management and the workers and the unions.”

Hence, trust-based ties between management and workers can be achieved only if worker expectations can be matched by management action—to be-gin with, by sharing information in a sustained manner (see figure 6.3 for the nexus). Such sustained information sharing serves as a manifestation of the ideological commitment beyond instrumental intentions, which Melman (2001) pointed out as critical to realizing genuine worker participation. In a participant observation-based study of an alternative health organization, which claimed that every member was equal in the organization, Kleinman (1996) shows the subtle ways in which gender divide and practitioner-office staff divide operate and through which societal norms of domination and power are reinforced. Kleinman (1996) brings out the processes and the dominant ideology behind which practitioners stonewall any debate with the office staff on bringing any change to the traditional roles that carry



their own notions of superiority-inferiority, competence-incompetence, and so on. However, then, this feeling of we vs. they, thwarting the am-bitions of the staff group either to become part-practitioners or insisting that practitioner-volunteers do some staff work quickly leads to increas-ing distrust between the two sides. The spiraling distrust further results in withdrawal and even quitting of the organization by valued members. Fair process, according to Kim and Mauborgne (1997) requires “engagement,” “explanation” and “expectation clarity” that evidently has information shar-ing as its core element. Once this happens, people cooperate willingly. It is only matching evolving expectations with information sharing that may lead to trust-based ties between management and workers. Such trust-based interaction, in turn, could lead to sustained participation and involvement in a worker cooperative such as NCJM.

So far we have been focusing exclusively on worker trust. However, to the extent that trust occurs in interaction, it is likely that it affects the other groups or actors participating in the relationship (Schoorman et al. 2007). In the case of NCJM, other actors included unions, staff, and top management. The case study analyses of the variation in involvement of these other actors that I present below suggest that a perception that the other party considered a particular actor (e.g., unions) trustworthy significantly affected the involve-ment of that particular actor in organizational issues.

On the one hand the results of the analyses reinforce my earlier proposition that the most significant factor that affected workers’ (including unions’) in-volvement is their perception of management’s trustworthiness (Morgan and Zeffane 2003). For example, apart from workers’ trust in the management,

Figure 6.3. The Relationship between Worker Expectation, Information Sharing, and Worker Trust


Table 6.4. The Main Factors Affecting Staff’s and Unions’ Involvement in Disciplinary Processes

Period vs. Group Staff Unions

Formative Period (1987–1989)

(EI+) Staff’s perception about workers’ belief that staff would take care of workers’ interest in disciplinary issues � Concern of staff

(EI+) Staff’s belief that unions and workers would not take undue advantage by disturbing the disciplinary process � Concern of unions and workers

(EI+) Unions’ feeling of economic-legal ownership:

Unions’ belief in the competence of the top management and in its concern about the employees of the cooperative � Competence and concern of management


(EI–) Staff’s perception of workers’ belief that staff was telling them lies regarding financial matters � Openness of staff (questioned by workers)

Staff’s perception of workers’ belief that staff was corrupt and not paying any attention to the workers’ interest � Concern of staff (questioned by workers)

(EI–) Workers’ allegation that while unions were asking workers to maintain discipline, they did not maintain it indicating an inconsistency between words and deeds � Reliability of unions (questioned by workers)


EI+ Staff’s belief that they were again perceived as open and reliable through information sharing by the source that sowed the doubt � Openness of staff

(EI+) Unions’ perception of workers’ belief that the unions became honest and willing to share information more openly � Openness of unions (as perceived by workers)


EI– Staff’s perception of workers’ belief that staff was corrupt and not paying any attention to the workers’ interest � Concern of staff (questioned by workers)

(EI–) Unions’ feeling of being manipulated by the top management with no respect for unions’ interest � Concern of the management (questioned by unions)

Unions’ perception of workers’ disbelief in unions’ sincerity and openness in sharing information � Openness and concern of unions (questioned by workers)


(EI–) Staff did not believe that others, especially the President, would act according to his assurance � Reliability of the President (questioned)

(EI+) Some unions’ belief in the capability and sincerity of the President in bettering the cooperative for everyone � Competence and openness of the President

(EI–) Other unions’ belief that the President was crafty and might go back on his promises � Openness and reliability of the President (questioned)



as mentioned earlier, the unions’ trust in the management (for example, top management as well as the President) affected their involvement, an increased trust being associated with an increased involvement. On the other hand, the analyses also indicate that unions’ as well as staff’s perception that the work-ers considered them trustworthy resulted in an increase in unions’ and staff’s involvement. Conversely, staff’s and unions’ perception that workers did not repose their trust in the unions and staff led to a significant drop in unions’ and staff’s involvement. Thus, similar to the case of workers, a perception of being considered trustworthy (or not) significantly affected the involve-ment of staff and unions in the organizational change although for workers the signal of their trustworthiness was the management’s and unions’ sharing of information with workers. Overall, the analyses highlight the mutuality of trustworthiness in affecting employee involvement in organizational change.

CONCLUSION

As the decade-long history shows, a worker cooperative such as NCJM faces tremendous odds. To name a few, these odds include (1) a baggage of colo-nialism, where for generations, workers have become used to a parent-child relationship both at the shop-floor as well as the union office (Chakrabarty 1996), (2) a “sunset” industry like jute that is reeling under the onslaught of “manmade” fibers, (3) an institution-like cooperative that is facing the rising tide of globalization, and (4) the weight of a massive size of several thousands of employees where an individual may find it hard to find his or her own identity. Yet, this case signifies the possibility that if management can look beyond the immediate and the instrumental, there are possibilities of generating and harnessing collective energy, which happened at NCJM in patches during the decade that I explored here. Given that NCJM is so short of material resources and there is no respite from “market forces,” informa-tion sharing and appropriate mechanisms around it have the possibility of becoming the trigger for employee involvement, which in turn may lead to the building of “workplace democracy” (Zwerdling 1984).

NOTES

1. This chapter is adapted largely from Kandathil, G. & Varman, R. (2007). “Con-tradictions of Employee Involvement, Information Sharing and Expectations: A Case Study of an Indian Worker Cooperative.” Economic and Industrial Democracy 28(1): 140–174. © 2007 SAGE Publications Ltd.


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2. In a relationship between two or more groups, perceived trustworthiness is a person’s or group’s (e.g., workers’) perception of the other persons or groups (e.g., management or unions) that they deserve of trust based on the perceiving person’s or group’s (e.g., workers’) beliefs (shared belief in the case of group such as workers) about the other group. These beliefs include (Mishra 1996; Whitener et al. 1998):

1. Belief in the competence of the other grou p that because of that group’s capability, it will not go wrong in its dealings that affect the believing group.

2. Belief in the openness of the other group that because of its sincerity toward the believing group, it will not hide anything (for example, information) from the believing group that affects the believing group.

3. Belief in the concern of the other group that it will not take undue advantage or betray the believing group; moreover, it will take care of the believing group’s interests also.

4. Belief in the reliability of the other group that it will do exactly as it says that it will do (consistent between word and deed). In other words, it will keep up its commitments to the believing group.


125

Chapter Seven

Looking Backward, Looking Forward

We are coming to a momentous pause in this journey of exploring the world of Prems and their families, and of understanding their efforts to survive and transform companies taken over by workers (CTWs) such as the NCJM. Here, I pause to look back for the insights that this journey created and the di-rections—the way forward—that these insights suggest. The contradictions, the interaction between the opposites within the contradictions and the poten-tial of this interaction to transform, that is to create a new synthesis, emerge as the pattern of the footprints that were created in this journey. I discuss this dialectical pattern next, summarizing the discussions in the previous chapter.

CONTRADICTIONS OF EI IN ORGANIZATIONAL CHANGE

The observable conflict that was intriguing, as we have seen briefly in chapter 4 and in detail in chapter 5, lies in the variation of EI vis-à-vis information sharing. The existing scholarship on EI in organizational change expects that, in general, management’s increased information sharing with employees should lead to increased EI in organizational change (for a review, see Ben-son et al. 2013; Oreg et al. 2011). However, the NCJM transformation story depicts a contrasting picture: increased information sharing leading to both expected increase and unexpected decrease in EI in organizational change. Further, when information sharing decreased, there was an increase in EI. Chapter 6 provides an analysis of this observation, identifying the processes that led to these conflicting outcomes. The argument is that in due course the evolving nature of workers’ expectations of information sharing created a mismatch with management’s expectations of information sharing, and this mismatch created the conflicting outcomes.


126 Chapter Seven

Management’s expectation of information sharing was primarily this: to the extent it shared information, particularly sensitive information to which workers and unions were not privy to during the family ownership period, workers and unions should have increased their involvement in the transfor-mation efforts. Further, the management expected such increased EI in quick succession to the information sharing. In other words, in return for sharing beneficial or privileged information, management expected immediate EI as a reciprocating helpful response. In the context of organizational change, Deetz (1992) considers this expectation as an indicator of an instrumental approach to EI. As discussed in the previous chapter (see figure 6.2), this instrumental approach underpinned the practices of information sharing that the management adopted most times, which led to the breakdown of commu-nication with workers. In turn, this resulted in reduced worker participation in the transformation process, as was evident during the turbulent period. In contrast, as shown again in the previous chapter (see figure 6.2), during the stable period and new leadership period, management’s information sharing practices followed an institutional loop. In this set of practices, management was tolerant toward workers’ testing of management’s trustworthiness, the time workers took to process the information that was shared by the man-agement, creating a signal that management trusted workers. This led to increased EI, irrespective of the quantity of information being shared. Thus, the management followed two contrasting patterns of information sharing practices, one underpinned by an instrumental approach and the other by an institutional approach.

Beyond this contradiction within the information sharing practices of the management, as discussed in the previous chapter, the management’s instru-mental approach also contradicted the institutional approach that workers adopted consistently, on which their expectations of information sharing that evolved over time, came to rest. In the beginning, particularly during the formative period of the cooperative, worker expectation was that the coop-erative would save their job, and perhaps, generate some profit. Thus, as the existing literature argues (and as discussed in chapter 2), during this period, there is an absence of an ideological approach or commitment toward work-place democracy. As scholars have argued consistently (e.g., Meira 2014; Srinivas 1993), for workers, takeover does not seem to be the beginning of an experiment in the democratization of their workplace. However, as the cooperative gained some stability in its operation and workers became aware of this stability, their expectation expanded into gaining influence not only in the daily running of the cooperative but also on broader and long-term issues such as the financial and market strategies of the cooperative. Thus, we see a call from workers to democratize the workplace and include their voices


Looking Backward, Looking Forward 127

in the strategic or firm-level decision-making and policy creations. They looked up to the unions to represent them meaningfully in such processes. This clearly indicates an interest in or a commitment toward representative democracy at the workplace. Accordingly, information sharing also signified or symbolized management’s trust in workers’ competence to influence such matters and workers’ commitment toward such democratization. Thus, for workers, gradually, the meaning of information sharing came to be under-pinned by an ideological approach to workplace democracy that privileges workers’ self-management and worker control, wherein the cooperative was considered as an organizing means to practice workplace democracy (Zwerdling 1984). Moreover, it appears that workers’ sense of their right to influence (through participation), and hence control, the functioning of the cooperative came at least partly from their sense of economic ownership. This point was evident in the comments such as “now, the company belongs to us also,” “as owners we should also know what is happening in the com-pany,” and so on. Hence, the perception of information sharing as a gesture of trust that facilitates worker control (Neill 1960) seems to have penetrated workers’ imagination over time.

This understanding or meaning of information sharing contrasted with the management’s meaning of information sharing. Based on an instrumental approach, they considered information sharing as a means to win employee confidence or agreement in the day-to-day, and perhaps overall, function-ing of the cooperative. Inclusion of worker voice in the functioning of the cooperative was thus considered as a means to generate such confidence and subsequent consent for the change efforts that the management initiated. This is in contrast to considering information sharing as a means to practice work-place democracy that privileges worker control from an equity and employee justice viewpoint. In the context of NCJM, the “democratic forums” that the management (in the NCJM case, represented mostly by the Board of Direc-tors and the AUAC) created could thus be considered as manifestations of the managerial strategy to build employee buy-in for the organizational trans-formation that the management had been planning and implementing. Thus, the contradiction in the meaning of information sharing perhaps points to an-other broader contrast in the conceptualization or meaning of organizational transformation: organizational transformation as a collaborative effort versus organizational transformation as a managerially directed and controlled effort (Boonstra 2008; Weick and Quinn 1999).

When organizational transformation is considered as managerially di-rected and controlled, the responsibility to plan and implement change lies with the management. In other words, the management becomes the change initiator, change leader or change agent, and in turn, workers become the


128 Chapter Seven

change recipients. The recipient will then have only two response choices: (1) oppose or show indifference to change, or (2) embrace and enact the planned changes, at best in the standard, and hence predictable, ways and at worst in the change recipients’ idiosyncratic, and hence unpredictable, ways. For example, at NCJM, both top management and union leaders expected that the workers should increase their involvement in work and support the change plans such as workload change. Workers’ opposition to these plans or the lack of effort to increase their workload was considered largely as a resistance to these planned changes. In this framework of organizational transformation, then, such resistance is considered as undesirable (love for comfort or status quo such as existing workload or regular payment) and hence to be reduced, eliminated or at best won over by the change leaders. Information sharing is considered as a means to accomplish these objectives, particularly to convince workers—the change recipient—of the management-initiated change plans. As a part of convincing workers, their “voices” or rather opinions, called feedback, are elicited. This is the essence of employee consultation (Goodman and Truss 2004; Morgan and Zeffane 2003) as it was played out by the unions in the PLCC, a consultative committee. If workers’ “voices” are different from, particularly conflicting with, the management’s plans, management cajoles workers into a consensus. For example, workers’ opposition to workload increase that the AUAC perceived, and later experi-enced, was seen as an undesirable resistance to change. Similarly, manage-ment considered workers’ and unions’ demands for more information and regular payment usually as a “natural resistance” to accept the uncertainties and chaos informing a worker cooperative. In this context, the “democratic” decision-making forums such as the PLCC were considered a means to smoothen this opposition by convincing them of the changes that were hap-pening in the cooperative and elicit their feedback on these so that the AUAC (or the MD) could make the decisions.

However, as we have seen, through their demand for more information, consultation, and regular payment, unions and workers seemed to signal the need for an institutional approach—an alternative to the management’s in-strumental approach—to understand and implement the transformation plans. Within this institutional approach, the opposing viewpoints raised by unions and worker representatives in the PLCC or by workers in their meetings over workload change were not opposition to change but an eagerness to “air their views and concerns” (Thomas et al. 2011), and be heard. Thus, instead of be-ing change recipients who typically oppose management’s change plans and implementations, workers seem to expect a partnership or collaboration in the process of transformation.



This difference in approach toward organizational transformation further manifested in the values and skills that the two groups—the management, particularly the top management, and workers—seem to privilege. Partly driven by the pressures of external stakeholders such as FIs and IRBI and their standards of efficiency, the top management seemed more focused on completing the change efforts within time and budget. This efficiency focus contrasted with the trust-based negotiation and inclusivity of voices that the workers were expecting and demanding over time. Thus, the management preferred (and hence privileged) skills such as time-bound and cost bound action, systematic planning and controlling (including manipulation of em-ployee voice). Recall that when unions could not convince the workers of the workload increase or the changes in the cooperative in general (which led to the formation of the Shramik Samiti), the management broadly interpreted this as an indication of unions’ incapability. In contrast to the skills that management privileged, workers were more interested in stories about the cooperative, and creation of trust-based ties that appreciated the chaos and uncertainties in solidarity with them. Thus, as summarized in table 7.1 below, perhaps, there were considerable contrasts between the management’s and workers’ conceptualization of organizational transformation.

Table 7.1. Organizational Transformation: Management-controlled and Directed vs. Collaborative

Approach �Dimension �

Transformation as management-directed effort

Transformation as collaboration between management and workers

Actor-process Top management OR managerial employees

Top-downControlled, directed

CollaborativeEvolving in the partnership

between management and workers

Resistance Source: recipients of changeMostly psychologicalIs to be reduced, eliminated, or

manipulated or at best won over

Source: can be change agentsResistance/dissents as resource

valued equally with the dominant voice

Resistance as a form of engagement with change

Success EfficiencyCompleting the change effort

within specified time and budget

Negotiation and trustExpectations and goals evolve

Ethical positions Value-neutralSuppression and masking of or

indifference to moral bases for decisions

Equal value to different positionsRecognize underlying values

(what values and whose values) in decision-making


130 Chapter Seven

In sum, in the transformation efforts in the NCJM cooperative, we see contradictions at multiple levels. Beyond conflicting outcomes—the rise and fall of EI, the contradictions include contrast (1) within management’s enactments of information sharing practices, (2) between management’s and workers’ expectations of information sharing, (3) between management’s and workers’ value-approaches and meanings that informed the expectations and that underpinned the practices, (4) between management’s and workers’ approaches toward the takeover attempt and the transformation efforts, and finally (5) between management’s and workers’ conceptualizations of organi-zational transformation that informed their approaches. The transformation of NCJM evolved through these interlinked contradictions that interacted within a level (e.g., practices) and at multiple levels (such as outcomes, processes or practices, values and meanings).

PRACTICAL IMPLICATIONS

Implications for Practice of Organizational Transformation

The dominant framework on organizational transformation recommends that the transformation should be “managed” (planned and controlled) by the change leaders (typically managerial employees) so that its outcome can be received by the change recipients (typically non-managerial employees). The NCJM case highlights the possibility for a different practical approach to organizational transformation—an approach of collaboration and co-creation.

In the collaborative approach, to begin with, practitioners need to under-stand transformation as a challenging opportunity to develop trust-based ties among various stakeholders of a firm, rather than just hitting the predefined goals. Hence, control of the transformation process will not lie in monitoring deviations from the plans to minimize them but monitoring for potential dam-ages to stakeholders and eliminating or minimizing them. This means, there is no fixed plan that should succeed at any cost and deviation from which should be considered as abnormal and failure. Instead, the art of continuous improvisation lies at the heart of transformation. In this sense, plans are to be treated as guidelines that are formed based on the reasoning that emerged at a point in time, and hence are to be modified as new reasons evolve over time.

To facilitate continuous improvisation—a creative combination of what is available and what is acquired—change participants need the skills of creating interesting stories and listening to stories of people around them, particularly stories on the ongoing transformation. For example, at NCJM, by listening to the stories of workers, the MD came to understand the pressing need for an additional democratic decision-making forum at the plant level



with worker representatives on board. The implication is that participants should be trained to listen to corridor stories that are usually not heard, with the intent to identify the underlying voices since such stories are the carriers of marginalized voices and interests. For example, in the NCJM case, unions and the management were cognizant of the corridor conversations among Shramik Samiti sympathizers (before it evolved into public protests) that highlighted the need for information sharing regarding the overall function-ing of the cooperative. However, they ignored these conversations as rants. Had they listened to such conversations and identified the need for facilitating more worker influence on the transformation process, the cooperative could have avoided the jolt before it entered into a stable period. On the other hand, the President could at least create an image that he was listening to worker stories, which led to substantial worker support for the change (e.g., workload increase) that the President initiated. As we have seen, workers interpreted listening to their stories as an attempt to include their voices in the decision-making processes. Thus, in the context of change, story listening could well be the beginning of including different voices.

Beyond democratic value, there is a functional value attached to inclusion. Inclusion of different voices and the other side of it—the diversity that such inclusion potentially creates—open space for a more creative solution that is necessary for a socially complex problem such as organizational transforma-tion. However, the diversity in decision-making, particularly in an emergency situation, brings in the issue of speed (and hence efficiency) of decision-making. Hence, the potential creativity that a collaborative approach would facilitate might sacrifice efficiency that the dominant “managing change” approach provides. Therefore, effective organizational transformation needs a long-run dynamic balance between the two approaches.

A major issue in creating effective organizational transformation is the is-sue of resistance to change. As discussed above, from a “managing change” perspective, resistance to change is usually considered as pathological, and hence to be eliminated or at best won over by the change leaders and agents. We have seen how the management and the AUAC interpreted workers’ demand for regular payment and more information as partly a resistance to adapt to the uncertainties and chaos around the transformation of the coop-erative. Such interpretation missed the essential expectation about the trans-formation that workers were trying to advance: an assurance that they were trusted and would be trusted with opportunities to influence the processes. Had AUAC and the management considered worker demands as an expres-sion of their eagerness to participate in the transformation process, it is more likely that they would have understood the underlying issue of the symbolic value of information sharing as gesture of trust. Consequently, they would


132 Chapter Seven

have potentially avoided the communication breakdowns. In contrast, in the context of workload increase, the President realized that workers’ suggestion to transfer MMD workers, which was initially interpreted as their resistance to change, was a useful feedback on how to balance the overall workload while increasing workload. This approach to resistance as a useful feedback and an eagerness to participate in the transformation led to increase in work-ers’ involvement in workload increase. Therefore, instead of treating resis-tance and opposition to management-initiated change plans as pathological opposition, if we treat them as useful feedback and an eagerness to influence the transformation process, it could lead to a more creative and inclusive solu-tion. Thus, the effectiveness of transformation can be increased significantly (Ford and Ford 2009; Ford et al. 2008). If we adopt this stance, organizational transformation will evolve as a collaborative co-creation.

Overall, understanding and accepting opposing viewpoints, of course, is a key to practicing workplace democracy, for which a worker cooperative is expected to stand. However, beyond the context of worker cooperatives and workplace democracy, as discussed above, these lessons also have a func-tional appeal since they can lead to a more creative solution. Thus, these les-sons are equally valuable in the broader context of organizational transforma-tion. However, as the NCJM case shows, a functional focus sans normative commitment to workplace democracy could create contradictions at multiple levels. Along these lines, the NCJM case study also brings out some specific practical insights for worker cooperatives and CTW, some of which I have already discussed in the previous chapter. Additional implications follow.

Implications for CTW and Transformation of Worker Cooperatives

During the formation of the NCJM cooperative, ten unions of different politi-cal ideologies (e.g., CITU affiliated to the ruling Marxist party that had more left-wing orientation and INTUC affiliated to the opposition party—Indian National Congress—that had a more right-wing orientation) were operational in the company. Open confrontations between them were not unusual dur-ing the family ownership period. Similarly, there was a high power distance between the management and workers during the family ownership period. Yet, during the takeover, putting aside these differences, unions, workers and management stood united. This unity exerted tremendous force on the state government to become the guarantor and give active support to the coop-erative. This point is important since the approach of the state government toward the NCJM was different from the apathy that the state had shown similar company takeovers (Sen 1995). Therefore, molding such unity is an important requirement for mobilizing resources. In creating unity, the top



management, particularly the MD, played a crucial role. Moreover, without the continuous cooperation between the top management and the unions, it would have been difficult for NCJM to achieve the growth that it had during the stable period, which was a crucial period in the history of NCJM. Thus, as it is argued in various contexts of organizational transformation (Armenakis and Bedeian 1999), the commitment of the top management toward transfor-mation is a necessity for effective transformation. However, in the context of worker cooperatives, in addition, the commitment of the unions is also cru-cial. More importantly, as explained next, this commitment involves striking a balance between two contrasting demands on unions, which is an essential skill required in a takeover-by-workers context.

The increased level of cooperation between the top management (in the NCJM case, specifically the MD) and the unions may throw up its own challenges, as happened in NCJM. In NCJM, the close interaction between the MD and the union leaders through the AUAC often led to a “cold war” between unions and management staff, and unions’ alienation from workers. Many times, the management staff complained that the AUAC was not only making decisions on behalf of the management but also that the unions used this proximity with the MD to boss over the management staff. This appre-hension, for example, partly led to management staff’s attempt to keep the unions out of the discipline-related decisions in the plant. Both top manage-ment and unions have to be more cognizant of such a potential development in worker cooperatives. Further, in NCJM, whenever management staff as-sessed unions’ functioning more as a representation of worker voice, the staff consulted unions and worked along with them. However, when the staff felt that the unions had lost worker confidence, they did not consult unions and worker representatives and instead kept them out of representing workers, for example, in the disciplinary disputes. Therefore, unions have to learn the following: (1) not to step into the management staff’s day-to-day decision-making, if they are not asked to either by workers or staff but step in if it is an emergency situation, and (2) more importantly, not to alienate them from the workers. This is because workers are the stakeholder group that unions are conventionally expected to represent, and unions draw legitimacy for their existence through such representation. I explain this point next.

In NCJM, similar to staff’s assessment of unions, workers also came to consider unions as having been co-opted by the top management. The privileges that the unions enjoyed, and at times misused, reinforced such considerations. Thus, just like the top management, for workers, the unions manifested another hierarchy resting above them. These two hierarchies—the top management and the unions—in workers’ interpretation were committed to preserving the hierarchical existence that gave the top management and the


134 Chapter Seven

unions the privileges that they enjoyed. Thus, workers considered unions as non-committed toward the worker cause that went beyond regular payment of wages to the issue of worker control, associated trust, and self-management. However, from the unions’ viewpoint, most times they were committed to-ward the transformation of NCJM but not as much toward facilitating worker control. To the unions, worker control seemed more during the family owner-ship period, and perhaps less salient after workers’ takeover.

In contrast, when the cooperative’s goals, such as efficiency and finan-cial stability in the long run, were in conflict with workers’ goals, such as democratic functioning and immediate payment of wages, workers expected the unions to function as an agency of worker control. This broadly meant checking the managerial tendency that sacrifices workplace democracy for achieving efficiency. Thus, unions appeared caught between two conflicting commitments and associated demands: the commitment toward working class movement and the commitment toward an efficient and fast transformation of the cooperative into a competitive entity, which came from external market pressure. As numerous case studies on worker cooperatives (Cheney et al. 2014) including those of Indian industrial worker cooperatives (e.g., Isaac et al. 1998) that I cited in chapter 2 show, the transformation of worker coopera-tives is replete with tensions that arise from such contradictions. Hence, an essential skill that union leaders need is the capability to handle such contrast-ing values, roles and the associated demands in a balanced manner, and the ability to resolve the tensions that arise from the contradictions. Without this skill, unions might degenerate into either of the following: (1) an ideological utopian movement that is disconnected from the day-to-day reality of market pressure (e.g., employees’ pressure to have a living wage regularly so as to beat the market pressure), (2) an instrument of the paternalism of the new management in place, and (3) an agent of capitalist modes of production. As the experience with the Basques’ Mondragon cooperative—arguably the largest worker cooperative network in the world—shows (Kasmir 1996), this point is particularly important in large cooperatives since by their sheer number of employees large cooperatives will need representative democracy where the unions’ role becomes decisive (Srinivas 1993).

Such balances are important for not only union leadership but also manage-ment leadership. During the takeover, in the best scenario, as was the case with NCJM, the pressing massive unemployment or some pro-labor attitude might force the management to stand firm with the unions and workers (for an opposite case, see Srinivas 1993). However, as the cooperative is formed and it has to survive the competitive pressures of the market, it is likely that the management would swing more toward a market-oriented approach. The NCJM case illustrates this possibility. As had occurred in NCJM, this would



potentially conflict with the democratic orientation, particularly when the management continues with the market approach based on their experience from the family ownership period. In such contexts, at best, the top manage-ment might develop a paternalistic approach toward workplace democracy, as the NCJM case shows. In sum, like the unions, the management also has to facetheconflicting demands of the capitalistic market and workplace democracy continuously. If the management is incapable of handling such contradictions effectively, it may not be able to collaborate with employees and unions to create an effective transformation. Further, it may end up co-opting the unions, undermining the unions’ potential to help management to strike a balance between the contradictions. Therefore, it is important that the management is also skilled enough to strike a dynamic balance between evolving contradictions.

In sum, during the worker takeover and the subsequent transformation of the worker cooperative, unions and management, particularly top manage-ment, along with workers (see previous chapter for workers’ contradictions) face evolving contradictions and the tensions arising from them. Therefore, members of the cooperative need to be equipped with the capability to handle contradictions effectively, strike a dynamic balance between them, and resolve the tensions arising from such contradictions, without sacrificing democracy. Organizational change scholars have discussed such skills as am-bidexterity, and they suggest various measures to develop such skills both at the individual and collective levels (Birkinshaw and Gibson 2004). Although these suggestions seem to come fundamentally from a pro-employer perspec-tive, perhaps, worker cooperatives need such training along with training in democratic functioning.

Even without such formal training that is typically available to capitalist competitors of worker cooperatives, Indian industrial worker cooperatives that were formed from CTWs have shown that they can turn around sick industries while retaining workplace democracy in a delicate balance. An illustrious example is the case of Kerala Dinesh Beedi (Isaac et al. 1998). A critical success factor in such cases is the support of the government in terms of both policies (that support cooperatives) and initial investment but without intervening in the functioning of the cooperative (Bhowmik and Sarker 2002; Gulati et al. 2002). While such government support is available to private capitalist ownership in many parts of the world, and increasingly so in India, it is progressively becoming unavailable to worker cooperatives, leading to the widespread demise of industrial worker coop-eratives in India (Bhowmik 2006).

Potentially worsening this situation, both state governments and the Union government of India (led by the Bharatiya Janata Party (BJP)), who are ex-


136 Chapter Seven

pressly protectors of democracy—are legislating labor policies that could reduce the chance of company takeover by workers. For example, the Rajas-than government (led by the BJP) eased up labor laws for facilitating better opportunities for doing business (see Business Standard December 20, 2014), a direction in which the union government is reportedly moving.1 This easing up, for example, means, reforming the Industrial Disputes Act 1947, allowing firms employing up to 300 workers to retrench workers or shut their operations without the government’s permission (against the current limit of 100 and the need for government’s permission to shut operations).2 Further, a trade union can be formed only if it gets 30 percent of the workers as members, which is significantly tighter than the earlier case. During the period of this study (1997–1998), any seven members could register for a trade union, which in 2001 was made contingent on gaining 10 percent of the labor force as mem-bers. According to the most recent trade union verification data, the Bharatiya Janata Party (BJP)–led Bharatiya Mazdoor Sangh (BMS) is the biggest labor federation in India with 6.21 million members. This number is almost twice the Communist Party of India-led AITUC’s 3.44m members and more than the Congress-affiliated INTUC’s membership of 3.95m (Trade Unions in 2012, Report of the Labour Bureau: Ministry of Labour & Employment, Government of India). Further, total unionization rates reported by the National Sample Sur-vey 2010 continue to remain low at 8.83 percent (for all workers). Therefore, the 30 percent cap might indirectly favor the BJP-led BMS and put other unions at a disadvantage. In addition, management’s activities such as union-busting and union-resistant strategies (Perrett 2007) make it more difficult, if not im-possible, for other unions and any movement to achieve the 30 percent target. Moreover, the increasing conversion of formal work into informal contractual work and increased labor flexibility employment challenge the trade unions’ membership as well as erosion of social security (Indian labour market profile, 2014). Hence, in effect, the reforms can undermine the chance to form unions, and in turn worker solidarity, that typically leads to worker takeover.

On the other hand, as mentioned above, the reforms have made it easier for firms to dismiss workers. The thrust for privatization that led to privatiz-ing even profit-making public sector units (PSUs) (in addition to the “sick” PSUs that, anyway, are not given to workers for taking over), is making an increasing number of workers dependent on private capitalist corporations with progressively constrained opportunities to air their voices even in case of dismissal. This scenario of increasing demise of worker cooperatives com-bined with the race for supporting capitalist firms through privatization and labor law reforms raises an important question for families such as Prem’s (and perhaps for society at large): Can their dream of living a dignified hu-man experience ever come true?



NOTES

1. “India: Rajasthan’s Labour Reforms—A Taste of Things To Come?,” Sindhu Menon, accessed December 20, 2014. http://www.equaltimes.org/india-rajasthan-s-labour-reforms-a#.VPgNKvmUejk.

2. The Industrial Disputes Act provides the institutional machinery and proce-dures to investigate and settle industrial disputes through negotiations adjudicated by Boards of Conciliation, Labor Courts, or Industrial Tribu nals. The Act stipulates that Government permission must be sought before closure of an establishment, lay off or retrenchment of workers. The Act also provides for the financial compensation of affected workers and defines what constitutes unfair labor practices on behalf of employers, unions and workers, including strikes and lockouts.



139

Appendix A

Various Departments in the NCJM Plant (pre- and post-takeover)

A) Production DepartmentJute HandlingBatching & PreparingSpinningWindingBeamingWeavingFinishingSack SewingCarpet

B) General EngineeringMechanical EngineeringElectrical EngineeringCivil Engineering

C) Quality & Process Control EngineeringD) Machine Manufacturing DivisionE) General Department & CanteenF) Administrative OfficeG) Labor OfficeH) Credit Society (independent of the plant but located in the plant premises)

* All appendices are adapted from the NCJM company documents.



141

Appendix B

Organizational Structure of NCJM after Takeover (as of 1 June 1997)


142 Appendix B

aSpecial Badli: Purely temporary workers who are entitled to get PF.bCasual Badli: Purely temporary workers who are not entitled to get PF.cCharge Hand/Maintenance Surveyor: Workers who are paid monthly on piece rate basis.


143

Appendix C

Production Process Flow Chart


144 Appendix C


145

Appendix D

Post-Takeover Productivity during 1987–1997

Accounting YearGross Sales Turnover

(Crores in INR)Labor Productivity

(MD/Ton)Aggregate

Production (MT)

1987–1988 40.60 56.30 44,7991988–1989 55.40 53.04 53,3541989–1990 61.05 56.26 48,363*1990–1991 75.16 52.34 52,0281991–1992 84.18 53.25 51,2551992–1993 76.27 42.89 49,5911993–1994 84.43 50.33 50,0521994–1995 85.01 56.66 43,6431995–1996 89.77 56.00 37,1731996–1997 41.18 Interrupted Working 15,101

*Low production was attributed to seasonal non-availability of raw materials due to climatic problems.



147

Appendix E

Strike History

Year Type of Strike

1980–1986 NCJM participated in all industry-wide strikes (Total number of strike days = 450)

1987 Nil 1988 Bharat Bandh [means All India strike] (1 day), Bangla Bandh [means regional

strike in West Bengal] (1 day), but Mill partly run during both the strikes1989 Nil 1990 Nil 1991 Nil 1992 Industry-wide strike: Strike in NCJM only for two days remaining three

days—Mill not Affected1993 Bharat Bandh (one day), Mill not affected1994 Industry-wide strike (4 days)—Mill not affected, Bharat Bandh (one day)—

Mill not affected.1995 Industry-wide strike (4 days)—Mill affected 1996 Industry-wide strike (2 days)—Mill affected1997 Industry-wide strike (2 days)—Mill not affected

Total Number of strike days during cooperative period = 8 (compared to 450 days during the same period under family ownership for which the reasons as per company documents were financial constraints and labor unrest). Note that 1995 and 1996 fall in the turbulent period.

Lockout / Strike during Family Ownership Period (1980–1987)

Year Period of Days of Lockout/Strike

1983–1984 78 days1984–1985 Albion—56 days; Lothion—28 days1985–1986 Both units—146 days1986–1987 Both units—327 days



149

Appendix F

Agreements during the Formation of the Cooperative

Agreement on the Employees’ Contribution —Terms of Settlement

1. All employees of all units/establishments of the Company agree to con-tribute toward enhancement of the capital Funds of the company in the following manner:a. Permanent & Special Badlis agree to contribute to the additional Equity

of the company in the following manner: (1) Convert the outstanding of bonus for the year 1984–1985 and 1985–1986 to Equity (2) Convert to Equity the increases in all components of Wage due to DA escalation (except for P.F. & E.S.I. Components) as from, 1986 base for two years from the re-opening of the Mills (3) Such amount out of (2) above may however be given as Term Loan to the Company as may be advised by the IRBI in the Scheme of Reconstruction.

b. The employees (Permanent and Special Badlis) agree to form an In-dustrial cooperative to acquire and hold the Equity in the Company on behalf of the employees.

c. All Badli (Casual) employees will also provide contribution in similar way but the said contribution will be in the form of loan to the company as stated in clause 2 (i) A (C) here in above. However, the possibility of their participation in equity would be considered in due course.

d. Other than the category of workmen employees covered in category A & B here in above all other categories of employees will also agree to contribute toward enhancement of capital funds of the Company on the lines of those applicable for permanent and Special Badlis as in category A (a) here in above and by and large to the extent of per capita contribution Equity for the workmen categories, since in all such cases DA element may not be there or DA element may be different.


150 Appendix F

Agreements during the Formation of the Cooperative

2. The Company will agree to accept such additional Equity and complete all necessary formalities under related Sections of the company’s Act and also formalities for reduction of existing capital to the extent as may be directed by the IRBI in its Scheme of Reconstruction in such manner as required.

3. The employees of the Company will agree to retain with the company such sums of money as may be progressively collected in terms of 1 a. (1) and C, for conversion to Equity of completion of formalities referred to in Clause (ii). However, in case the company does not receive sanction for enhancement of equity or is restrained for any reason whatsoever to issue equity to the employees, then such funds as are to be collected shall be treated as a loan on such terms as may be specified in the Scheme of reconstruction, and the matter would be reviewed once again by all parties.

4. The company will accept such number of the nominees representing employees shareholders decided in the Scheme of Reconstruction to be finalized by the IRBI.

Salient Points in the Agreement made with the Pressing Creditors

1. All the big creditors such as Raw Jute Supplier, store supplier and others would continue to supply all the necessary Inputs on 2 months credit basis at a simple interest of 2 percent.

2. Those who would be interested in trading of finished goods could get the same on market price.

3. The company would deduct the salary, wages and other necessary ex-penses for running of the Mill and the balance would be paid to creditors on installment basis.


151

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159

Index

absenteeism, 157accommodation, rational, 10accountability, 12actions: bound, 129; consistent, 113;

immediate, 18; pragmatic, 36adherence, strict, 104administrative activities, 66, 83administrative matters, 45, 66administrative office, 139affiliation, 2age, average, 33agency, 61, 96, 134; external, 65agents, 131, 134; bargaining, 34;

external, 151agitation, 65, 85agitations, frequent, 65agreement, bipartite, 38agricultural sector, 14ailing, 16, 19AITUC, 136allegation, main, 60allegations, 57, 60, 66all-India strike, 64alternative organization, 156alternative production systems, 152ambidexterity, 135ambitions, 121, 153analysis: document, xix; institutional, 17analytic description, 101

angle, theoretical, 4antagonistic, 53anti-business, 17antithesis, 11apathetic attitude, 117apathy, 16, 71, 132appreciative inquiry, 12, 153approach: changed, 55; command-based,

12; co-operative, 53; dialectical, 11; exploratory, 21; managing change, 131; market-oriented, 134; paternalistic, 135; practical, 130; quantitative, 21

approval, prior, 41, 47attribution, 72AUAC decisions, 78AUAC members, 46AUAC membership, 55

backdrop, xix, 31basis: credit, 37, 150; installment, 37,

150battle, long legal, 50behavioral disorders, 3belief; shared, 113, 124; strong, 53believing, stopped, 59, 95BIFR, quasi-judicial, 38BIFR guidelines, 41BIFR meeting, 60


160 Index

BIFR personnel, 61BIFR representatives, 112BIFR scheme, 81board: new, 41; reconstituted, 42board members, 41, 46board minutes, 46, 97board representatives, 36, 41boards, elected, 15board’s decision, 71boards of conciliation, 137bonus, arrears, 37boundaries, 22, 35boundless trust, xviibox, suggestion-cum-complaint, 114breakdown, 118, 126breakfast, 69, 83bribes, taking, 69, 118broad-based EI, sustaining, 16building ambidexterity, 152building loyalty, 108business, family-owned, 5, 17business corporations, 77business demands, 155

capability, group’s, 124capital, 13, 17, 32, 150capital expenditure, 90capitalism, shared, 9, 153capitalist, 10, 15; bankrupt, 13;

monopoly, 9capitalist business corporations, 41capitalist canon, 151capitalist competitors, 135capitalist corporations, xix; private, 136capitalist domination, 15capitalist modes, 10, 134; dominant, 11carpet designs, 81carpet division, 33carpet production, 24case methodology, 29cases: extreme, 3; selecting, 25case studies, qualitative longitudinal, 5case study analysis, xxcase study research, 152, 157causal sequences, 29

change agent, 127change agents resistance/dissents, 129changed complexion, 68changed status sinks, 120change dynamics, 5change efforts, representative

organizational, 113change initiator, 127change participants, 130change plans, 128change practitioners, 6changes: initial, 51; significant, 58, 119channels, 64, 114; informal, 106China’s booms, 153closure, 23, 38, 47, 50, 137co-constructing change, 6co-creation, 130; collaborative, 132collectivist-democratic modes, 108colonialism, 123colony, 2, 28, 106commendation, 82commitment; conflicting, 134;

enhancing organizational, 107; ideological, 120; member, 16; normative, 132; special, 119

committee meetings and public meetings, 29

committee members, 79, 82committees: canteen, 42, 74;

departmental, 42commonalities, 6communication; change implementation,

154; effective, 45; organizational, 117, 152; two-way, 77

communication breakdowns, 132communication channels, 75; new, 117Communist Party of India, 17compelling need, 117competence, co-operative, 122competence-incompetence, 121competitive entity, 134complex contracts, 37complexities, 25, 49complex social problems, 22conceptualizing involvement, 152


Index 161

conceptual tools, 21conciliation, 137conflict, observable, 125conflictual conceptualization, 12confrontations, 153confused co-operative, 39Congress parties, 19consistency, 6constant source, xviiiconstituencies, 12, 37construction, 49; spontaneous empirical,

11consultation, 52, 62, 110, 117, 128;

voluntary, 55consultative committee, xix, 26, 77, 128consultative process, 64contention, primary, 109contested terrain, 107, 155context: local socio-political, 24; socio-

political, 19; takeover-by-workers, 133

contextual variations, 22continuous critical self-reflection, xviicontract labor, 43, 109, 112, 117;

contingent, 90contradictions, interlinked, 130contradictions of democracy, 156contravention, 46control: acquired, 63; better, 63;

capital, 37; excessive legislative, 15; regained, 64; social, 156

conversations: continuous, 24; corridor, 131

co-operation, 24, 95cooperation, continuous, 133cooperative agency, 38cooperative bylaws, 39cooperative chains, 10cooperative coal, 153cooperative culture, 11cooperative economy, 9, 152cooperative entrepreneurialism, 12, 155cooperative failures, 54cooperative group, 157cooperative highlights, 47

cooperative movements, largest, 14cooperative period, 35, 53, 89, 147cooperative reliability, 114cooperatives: industrial, 14, 38;

plywood, 14cooperative societies, 14cooperative’s vision, 85cooperative vision, 85co-optation, 112coordinator, 2corporate colonization, 152correctness, 52corrupt practices, 65, 77cost: irretrievable sunk, 17; sunk, 35cotton threads, 95coursework, academic, 1co-workers, 72CPM, 18creation, 116, 129creative combination, 130creative process, 10creativity, potential, 131Credit Society, 139crisis, 23, 41, 154CTW dynamics, 12CTW literature, 11CTW movements, 10CTWs, survival, 15CTWs in Latin America, 12CTW transformations, 13culture, 12, 16; hierarchical, 17, 26curiosity, 1, 4cynicism, managing, 155

damages, potential, 130data: archival, 49; basic raw, 28;

collected, 28; qualitative, 49data collection techniques, xix, 29data documents, 29data sources, 22, 29data triangulation, 27, 29dearness allowance, 40decisions: consultative, 52; discipline-

related, 133; plant level, 45, 74decoding resistance to change, 152


162 Index

degeneration thesis, 11, 13, 152demands: contrasting, 133; face the

conflicting, 135democracy: internal, 12, 15;

organizational, 119, 155; representative, 127, 134

democratic: additional, 130; internal, 15the democratic decision making process,

85democratic forums, 127democratic organizations, 107democratic orientation, 135democratic participation, 107democratic practices, 12; new, 11democratic processes, 13, 16democratic theory, 154democratic value, 12, 131democratize, 126demonstrations, 40, 50; staged, 50demystification, 108departmental/plant level, 42departmental transfers, 78, 91departments: affected, 97; hemming,

62; important, 24; new, 92; quality, 98; quality control, 90; security, 97; spinning, 42

design, 82, 156developments, organizational, 12dilemmas, organizational, 108direction, 93, 100, 136disagreements, 47, 91disappointment, 112, 120disciplinary action: taking, 51; top-

down, 117disciplinary actions, included, 83disciplinary acts, 53disciplinary decisions, influenced, 67disciplinary disputes, 133disciplinary processes, new, 70discipline co-workers, 72disciplining, started, 72disciplining process, 65discourses, 108, 117dishonest dealings, 89disparities, 28, 109

disputes, 43; cooperative resolved, 52; industrial, 137

disruption, 64, 68, 99distortion, 87, 118distribution, fund, 120distrust, 117, 120; growing, 85, 120;

increasing, 121; spiraling, 121disturbances, 44dominant ideology, 120domination, 120, 151driver, significant, 101duty, shirking, 96dynamics, 4, 11, 17, 49, 103, 156;

organizational, 16, 152; post-takeover, 11, 19; regeneration theses, 11

economic crises, 9economic entity, 120economic ownership, shared, 10education, 110, 153efficiency: lower, 98; operational, 89;

sacrifice, 131efficiency focus, 129efficiency purposes, 107efforts: collaborative, 127; collective,

xviii, 39, 103; controlled, 127emancipatory, 15emergency situation, 131, 133employment: increased labor flexibility,

136; person’s, 71employment costs, 90; down, 89employments, direct, 14empowerment, 76enemies, class, 17energy, collective, 123enforcement, 51engagement, 121, 129; positive, 111;

prolonged ethnographic, 29enterprise: free, 12; solidary economy,

11enterprise councils, 155enthusiasm: increased, 61; regained, 63entities, sustainable, 4entrepreneurs, 154


Index 163

environment: hostile market, 16; institutional, 18; socio-economic, 17

equity ownership, 21, 75estimated financial progress, 65evolving process replete, xx, 5examination, close, 111excerpts, representative, 67, 76exchange, 77, 109expectation clarity, 121expectations: evolving, 121; expressed,

74; immediate instrumental, 111expenses, 37, 60, 150; accrued, 31experiment, 15, 126experimentation, 89

facilities, 33, 95factories, 17, 55factors: critical success, 15, 135;

important, 17, 100family business, xix, 55feedback, positive, 119financial health, 50, 92, 107financial non-viability, 35, 47financial reconstruction, 32financial status, 36, 88financiers, 16, 41, 43, 65findings, broad, 6focal period, 18focus, functional, 132form, organizational, 13formative periods, initial, 101forum, decision-making, xix, 128, 130framework: comprehensive, 6;

dominant, 130; exchange relationship, 156; theoretical, 21

functional appeal, 132funds: allotted, 40; sanction, 65funds flow, 112

germinated mistrust, 85gesture, reciprocal, 110gherao, 44, 48, 68globalization, 123goals: cooperative’s, 134; predefined,

130

goods, finished, 37, 150governance, 15, 16; firm, 13government: coalition, 17; local, 87;

ruling, 19government funding, initial, 16Government of India, 36, 136government ownership, 52government permission, 137government support, 135gradual erosion, 69grievances, 40, 46, 77, 110gross sales turnover, 145growth, 94, 133, 156

hessian looms, 33hessians, 34, 57hierarchical existence, 133hierarchical ordering, 49hierarchy, 2, 5, 33, 119, 133;

organizational, 24; prevalent, 118historical overview, 31history: decade-long, 123;

organization’s, 2

ideological incongruence, 13ideologies, conflicting, 19implementation details, 91implementation phase, 91implementation process, 98implementation stage, 25implications: practical, 103, 130;

significant, 112inception, 13, 56incongruent, 12inconsistency, 114, 118, 122increased involvement, 83, 117, 123Indian Cooperative Movement, 14Indian Supreme Court, 15India strike, 147indicators, significant, 100industrial units: non-viable, 38; sick,

37, 38industries: jute, 14, 17, 106; small-scale,

23industry norms, 95


164 Index

influence EI, 101influence plant level decisions, 76, 111infrastructure, 32institutionalization, 7, 13institutionalize, xx, 5institutionalized expression, 11institutionalizing, xx, 5, 11, 119institutionalizing democratic processes,

119institutionalizing structures, 119institutional loop, 126institutions: financial, 18, 32, 47, 106;

participative, 107instructions, 41, 89instrument, xx, 6, 110, 134instrumental, 111, 123instrumental expectation, 117instrumental intentions, 120instrumental logic, 111, 117instrumental reciprocity, 110instrumental thinking, 110intentions, 72, 104interest: active, 67; public, 48interest rate, 37interference, 16, 83International Cooperative Alliance, 10International Year of Cooperatives, 9,

19inter-personal conflicts, 119intervention, 57, 117INTUC, 132inventories, 31investment, initial, 38, 135invitees, 36, 46IRBI officials, 69

jute, 24, 76, 123; raw, 34, 42jute divisions, 33jute products, 33jute yarn, 34

Kamani Tubes, 16Kerala Dinesh Beedi (KBD), 17key driver, 100key role, 53

labor, saving, 15labor activists, 6labor courts, 50, 137labor federation, 136labor laws, xx, 136labor productivity, 145labor unrest, 18, 31, 44, 50, 147; large-

scale, 17language, local vernacular, 81, 106leadership systems, 16learning organization, 156left-wing orientation, 132legal crises, 23legal opinion, 46legislating labor policies, 136levels, stable, 42liabilities: cooperative’s, 40; increased

total, 39; old, 39life cycle, 11liminal organization, 154limitations, 120limited-ownership corporations, 107linear association, 101literature survey, 23loan benefits, 44loans: bank, 18; financial, 39; low-

interest, 18; taking, 38; temporary, 96lockouts, long, 35loops, 116lost confidence, 59, 95

machinery, 32, 98maintenance, 33, 61, 98managing change, 76, 153managing change perspective, 131manifestation, 60, 65, 113, 120, 127manpower, 32, 97market: capitalistic, 135; competitive,

34; globalized, 152market approach, 135market orientation, 16market pressure, external, 134market strategies, 45, 126mechanisms: informal, 16; new, 114;

organizational, 1, 23


Index 165

media, 17; local, 17, 106member participation, 13; sustaining, 12membership, 61, 136method matches, 22misappropriating, 58, 60miscreants, 71, 73misdeeds, coalition’s, 79misdemeanors, 51, 57miseries, 40, 83mishandling, 65, 86, 118; financial, 106mishandling finances, 88mistrust laden, 106misusing, 44, 96; started, 97mitigate, 28, 44MLA, local, 36, 41models, 106, 153; conceptual, 155;

cross-level, 157; integrative, 155; organizational stakeholder, 154; rational-bureaucratic, 155

modernization, 32, 34momentum, 61, 70Mondragon cooperatives, 152monopoly capitalist setup, 9moral bases, 129morale, 104, 108motivation, xviii, 112movement, ideological utopian, 134

nationalize, 36nature: codified, 106; evolving, 120,

125; power-laden, 108; symbolic, xx, 5

NCJM experience, 6NCJM Shramik Samiti, 40Negotiating meaning, 156negotiations, 67, 137new cooperativism, 153new markets, 45, 87nexus, 55, 120norm, societal, 120number: increasing, 50, 136; large, 27,

33

observation-based study, 120oligarchization, 12

onslaught, 9, 123openness: distorted, 115; promises, 122opposition, pathological, 132organizational arrangement, 75organizational change: co-creating, 6;

managing, 103; strategic, 151organizational performance, 42organizational predicament, significant,

108organizational status, 33organizations: authority-based

hierarchical, 26; based, 107; bureaucratic, 108; capitalist, 7, 11; changes in, 11, 156; health, 120; industrial, 41

ownership: increased psychological, 13; limited, 5; private, 61; private capitalist, 135; transfer of, 101, 119

parents, xvii, 3participants, 120, 131participation: loan/equity, 43; sustained,

121participative input, 117participatory behavior, 26participatory forums, 77, 109participatory mechanisms, 13, 109;

creating, 77, 109; new, 13parties, 38, 41, 87, 119, 121, 150;

communist, 17; dominant opposition, 41; ruling Marxist, 132

paternalism, 134patterns: contrasting, 126; dialectical,

125; emerging, 100; local fabric, 81; main, 30; opposite, 106; shareholding, 32; unique, 29

payment: consistent, 64; delayed wage, 113; immediate, 134; salary, 65; salary/wage, 46; sustained wage, 89

pelting stones, 61, 68per capita contribution equity, 149perception, sick industry, 19perception and effects of share

ownership, 154performance standards, 46


166 Index

permanent and special badlis, 149personnel, 46, 97; maximum, 97perspectives, relatively new, 6phase lag, 119phases: initial, 117; transient, 11phony, 118phony explanations, 44, 69picture: colorful, 92; contrasting, 125pilferage, 77, 79planning, systematic, 129plans, fixed, 130plant level, xix, 26, 51, 77, 130plant operations, 78PLCC decisions, 85PLCC issue, 74PLCC system, 114policy creations, 127policy level, 42, 117political affiliations, 34political flags, 43political ideologies, 132political inequalities, 108political leaders, local, 36political parties: national, 34; opposite,

27post-takeover, 16post takeover dynamics, 16post-takeover period, 11power distance, high, 132power relationships, 152power-resistance relations, 156practices: business ownership, 12;

common, 38; new, 13; unfair labor, 137

practitioner communities, 9practitioners, 5, 117, 130practitioner-volunteers, 121preconditions, xx, 5predictions, 99premises, 2, 31President of NCJM, 27pressure: competitive, 134; constant, 91;

performance, 19priority, 44, 65, 85private competitors, 32

private sector, 31privatizing, 136problems: climatic, 145; complex, 131;

main, 86; technical, 75process flow chart, 34production bottlenecks, 78production efficiency, 81production flow chart, 24production output requirement, 78production problems, 81production processes, main, 34production process flow chart, 143production rate basis, 38production systems, 15production targets, 25, 79, 81, 85, 88,

112productivity: enhanced, 111; low, 34productivity level, 98productivity ramifications, 152product mixes, 34profits, generating, 40, 78pro-labor attitude, 134promise, 112, 152promoter, old, 40promoters: earlier, 34; previous, 40proposition, earlier, 121protesting, stopped, 53protests: public, 131; strong, 43provident fund, 38, 43public holdings, 32punishment, maximum, 51punitive act, 51purchase equity shares, 38purpose, primary, 21

qualitative research design, 21qualitative studies, 21quasi-judicial body, 47

rationalization, 97, 104raw jute supplier, 37, 150raw jute supply, 84raw materials, main, 34reciprocate, 86, 110reciprocating, 126


Index 167

reciprocity: expected, 111; immediate, 110

recommendatory, 77reconciling democratic values, 155reduction: gradual, 90; significant, 70reduction techniques, 29regain, 63, 83regenerating, 11regeneration, 11rehabilitation, 32relationship: constructive, 82; cordial,

52; parent-child, 123reliability, deeds, 122rented accommodations, 33repaired trust, 65replacement, 46, 80replete, 42, 134; complex process, 39representative interview, 68representatives, international, 42requisite condition, 113re-regulation, 154research: ethnographic, 24; qualitative,

21, 154, 156research method, 21research methodology, 6, 19research monographs, 16research objectives, 22research questions, 4, 22, 31resistance, natural, 128resisting, 100, 156resource base, 32; initial, 32resources, 32, 129; financial, 96;

material, 123; mobilizing, 132respective heads, 91response, defensive, 11response choices, 128responsibilities: additional, 91; changed,

95retailers, large, 156retire, 46, 97retirement benefits, 71retirement initiative, 97retrenchment, 137revival, 19, 47, 73, 97revival scheme, 89

revival strategy, 15right-wing orientation, 132roadside vendors, 2Rochdale pioneers, 10role, critical, 47, 107role model, 42, 104root problems, 42rubrics, 49

acceptance, 113sacking looms, 33sacks, 33, 34sack sewing, 139salary/wages, 46sales tax arrears, 37salient points, 150sample, large, 107sampling method, 27sanction, 43, 150savior, 72, 99scenarios, 10, 136; best, 134;

representative disciplinary, 50scheme: financial, 41; labor

participation, 40; modernization-cum-renovation, 35

scolding, 58, 73seasonal non-availability, 145secrets, 40, 114selected indicators, 151selection of organization, 22self-employments, 14self-regulation, 52self-sufficient township, 33sensitivity, 120sensitizing, 102shareholding, 75share holding pattern, 32share ownership, 154shop floor decisions, 51shop floor level problems, 75Shramik Samiti demonstrations, 60Shramik Samiti formation, 56Shramik Samiti issue, 80SICA, 32, 47sickness, industrial, 34, 154


168 Index

slack, organizational, 119sliver cons, 95sliver feeders, 95small capitalists, 10social conformity, 28social movements, 12, 152social security, 136social status, 85society: co-operative credit, 31; old

cooperative credit, 39; socialistic democratic, 10

socio-political situation, 106solidary economy, 154Sonali Tea Estate, 14Spain, 10, 14, 156spinning frames, 33, 98stability, financial, 134stakeholders, external, 129standardization, 30standards, 108, 129standpoint, practical, 4state bureaucracy, 15state government representatives, 36state government takeover, 36state officials, 38state politics, 41status hierarchy, 26; organization’s,

26status quo, 11, 128story listening, 131strike history, 35, 147structural conditions, 108structures: economic, xix;

organizational, xix, 33, 108, 141study, quantitative, 21, 154study analyses, 121subsistence, 41substitutes, 38success, initial, 16succession, 117, 126superiority-inferiority, 121supplies, 37, 150; irregular, 83support: active, 132; continuous,

xviii; financial, xviii; initial, 18; mandating, 34; public, 16

support cooperatives, 135suppression, 129survival issue, 10sustainability, financial, 65sustained EI, 15sustain EI, 13, 103system: decision-making, 76;

socioeconomic, 10

tea plantations, 14technicalities, 108teleological, 11tensions, potential, 10termination, 47, 51term loan, 38, 149textile division, 33, 117themes, 25, 101, 103theses, regeneration, 11top echelons, 104trained mental health, 3training, formal, 135training program, 92transactions, rural, 2transfer, suggested, 100transformation: cultural, 113; fast, 134transformation plans, 128triangulate, 29trust: associated, 134; developing, 156;

impaired, 86; increased, 102; mutual, 113

trust-based interaction, 121trust-based loop, institutional, xx, 6trust-based negotiation, 129trust expectations, 129trust relations, 152trustworthiness, perceived, 124truthfulness, 112truths, partial, 104turbulent period, 65

unemployment, 18; increasing, 15; mass, 11; massive, 134; potential, 15

unethical disturbance, 110United Nations, 9, 19


Index 169

units: ancillary, 18; carpet, 57; large sick, 15; profit-making public sector, 136; small sick, 15; social, 30; unviable, 47

units/establishments, 149unrest, 50, 68unstructured interviews, 24

values: contrasting, 134; cooperative, 12; core, 113; democracy-oriented, 10; functional, 131; market/business, 12; strong, 85; symbolic, 131

viewpoints, theoretical, 25

violent, 44, 86voices: dominant, 129; father’s, 3;

marginalized, 131; tense, 83

wage components, 38wage reduction, 43wages: better, 64; disburse, 65; living,

134; paying, 113; taking, 85wages/salary, 64wastage, resource, 81wave, new, 10, 12weaknesses, highlighted financial, 32weaving, 139weight, psychological, 119



171

About the Author

George M. Kandathil is a faculty member of Organizational Behaviour Area at the Indian Institute of Management, Ahmedabad, India. He received his doctoral degree from Cornell University, New York. Prior to this, he work ed in industries including automobile and space.



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Contradictions of Employee Involvement in Organizational Change: The Transformation Efforts in NCJM, An Indian Industrial Cooperative