human resourse management

W15405

ABB INDIA: LEVERAGING DIVERSITY AND INCLUSION Koustab Ghosh wrote this case solely to provide material for class discussion. The author does not intend to illustrate either effective or ineffective handling of a managerial situation. The author may have disguised certain names and other identifying information to protect confidentiality. This publication may not be transmitted, photocopied, digitized or otherwise reproduced in any form or by any means without the permission of the copyright holder. Reproduction of this material is not covered under authorization by any reproduction rights organization. To order copies or request permission to reproduce materials, contact Ivey Publishing, Ivey Business School, Western University, London, Ontario, Canada, N6G 0N1; (t) 519.661.3208; (e) [email protected]; www.iveycases.com. Copyright © 2015, Richard Ivey School of Business Foundation Version: 2015-09-14

Diversity and inclusiveness is a function which opens up people’s mind and it gives a distinct business advantage to the organization.

Raja Radhakrishnan, head of HR, ABB India On a Friday afternoon, Radhika Muthukumaran received an email from the office of the managing director (MD), ABB India, regarding the visit of the ABB chairperson at the end of June 2014, to review the status and progress of the Diversity and Inclusion (DI) program that had begun in 2010-2011. The email suggested Muthukumaran should prepare a progress report and make a brief presentation during the chairperson’s visit. Muthukumaran, who had earlier headed the global inclusion and diversity function at CISCO India, had experienced a difficult time rolling out the DI initiative in ABB India, which was dominated by a male workforce and a conventional mindset. Although the situation had improved over the past three years, much needed to change. She described the present status of the DI program as “the tip of the iceberg.” Muthukumaran was concerned with a few issues yet to be resolved. First, compared with ABB Global, the scenario of workforce diversity, mainly in terms of gender and cross-cultural representation, was far from the scenario desired for ABB India. Second, the DI initiatives had yet to be fully integrated and streamlined at the various manufacturing facilities located in India. Third, the long-run business implications of such efforts had not been clearly identified by a cost-benefit analysis. In fact, finding satisfactory solutions to these issues would strengthen the DI initiatives by consolidating Muthukumaran’s position in the company for the years to come. ABB IN INDIA ABB, a global leader in power and automation technologies, operated in more than 100 countries with a global strength of 130,000 people. A multinational enterprise headquartered in Switzerland, ABB represented the global culture in the true sense of the term. “A walk along any corridor at corporate headquarters in Zurich underscored the company’s cultural diversity. People from more than 60 countries were represented in the 700-strong workforce in the parent campus.”1 In the words of an ABB executive:

1 ABB, “Our People: People at the Heart of Our Strategy,” March 13, 2015, www.abb.com/cawp/abbzh258/ 63795478c4961cddc125785c0071b697.aspx, accessed April 16, 2014.

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A total of 2,350 people had roles with global responsibility across overseas units of ABB. They came from 70 different countries, providing cultural awareness and sharing experiences that helped international teams work together in a unified way. ABB has expanded rapidly in recent years as part of ambitious growth plans. A highly trained, motivated and well-integrated international workforce was a key factor in achieving business success and strategic goals. ABB recognized that a diverse and talented workforce was a key competitive advantage.

The executive continued, saying that “as a truly global company, our business success reflected the quality and skill of our people. We believed that the wide array of perspectives that resulted from a diversity and inclusion focus promoted innovation and business success.” ABB India had 12 manufacturing facilities with more than 10,000 employees at various offices and plants. In India, the company had 25 marketing offices, eight service centres, three logistics warehouses, two Power & Automation Engineering Centres and a network of over 550 channel partners. The parent group actively supported its Indian operations in terms of projects, products, services, engineering and research and development (see Exhibits 1 and 2). ABB India was known, at its inception in 1949, as The Hindustan Electric Company Limited which was later changed to Hindustan Brown Boveri Limited. Following the merger of Asea Limited with Hindustan Brown Boveri, the name was changed to Asea Brown Boveri Limited in 1989. In 1994-1995 in Germany, a joint venture company — ABB Daimler-Benz Transportation AG (Adtranz) was established by ABB Zurich and Daimler-Benz AG Germany. A subsidiary of Adtranz was incorporated in India, called ABB Daimler-Benz Transportation Limited, which took over the transportation business of the company in 1996 following the global restructuring of ABB’s power generation business — in India, the power generation business was demerged and transferred to ABB Alstom Power India Ltd. with effect from April 1, 1999. Each shareholder of the ABB was allotted one share in ABB Alstom Power India for every share held in the company. The same ABB code of conduct was followed for ABB India as well (see Exhibit 3).2 THE DOMINANT CHARACTERISTICS OF INDIAN CULTURE India was a land of huge diversity in the sense that its 29 states and seven union territories were represented by a total of 21 dialects and one official language (Hindi) being spoken in different parts and regions of the country.3 As a result of the country’s colonial background, English was widely accepted used in all major official communication alongside the official language. Apart from this linguistic diversity, each state differed from all the others in terms of food habits, culture, attire, rituals, ceremonies and practices. The northern part of the country had the historic influence of the ancient Indo-Aryan civilization, whereas the southern part had grown under a strong Dravidian culture.4 Seniority, authority and positions were highly respected both at work and in family life; thus, the country’s national culture was predominated by hierarchy. The society was patriarchal in nature, as reflected by the lack of gender equality, fewer female executives at workplaces. A general insensitivity toward the people who were disadvantaged (both physically and financially) was also common. Unlike many Asian countries, Indians were characterized by their duality of both individualism and collectivism when dealing with others. Indian people were ambitious and achievement- and career-oriented,

2 ABB, “ABB on the Indian Subcontinent,” http://new.abb.com/indian-subcontinent/about, accessed April 27, 2014. 3 “States and Union Theritories,” http://knowindia.gov.in/knowindia/state_uts.php, accessed September 10, 2015. 4 Upinder Singh, “A History of Ancient and Early Medieval India: from the Stone Age to the Twelfth Century,” 1990, Oxford University Press, New Delhi.

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Page 3 9B15C031 enjoyed individual decision-making authority and preferred privacy to a considerable extent. At the same time, in their work and social relationships, they showed a priority for family and friendship, conformity towards rules and regulations, and concern for their social circles and immediate community. Over the years, in an attempt to overcome the challenges of the Indian culture, many multinationals that had been operating in India had adapted their practices and policies to successfully integrate into, and acculturate to, the Indian environment. THE DIVERSITY AND INCLUSION (DI) PROGRAM In 2010, ABB India’s country management team underwent a major reshuffling, and the new members decided to conduct a gender-parity survey. Among the many outcomes, the survey results revealed that females represented less than 5 per cent of all employees. In fact, among all ABB overseas units, ABB India ranked second last (ABB Saudi Arabia ranked last) in terms of its percentage of female employees. Accordingly, the new management team developed “Rewire 6,” an action plan for ABB India, which included DI initiatives (see Exhibit 4). In 2011, the recruitment of female graduate trainees improved substantially, rising to 27 per cent and then to 30 per cent of all recruitments in 2013. As of 2014, the female workforce representation across all ABB India’s functions and operations had reached an average of 11 per cent. In 2010, the country management team of ABB India appointed Muthukumaran, who had 13 years of strong industry background in human resources (HR), as the head of DI for India, the Middle East and Africa. In her interview, the top management team shared their ideas to enhance the percentage of female employees from (at that time) less than 5 per cent of the total workforce to 15 per cent in two to three years. Muthukumaran asked the team for a few clarifications. First, she asked whether 15 per cent was a realistic target. In a company with close to 10,000 employees, an annual average increase of 5 per cent of female employees would require the hiring of 500 female employees at different levels of the company in each of the three successive years. Furthermore, did the company intend to hire more female than male candidates, or would it simply replace its existing male workforce with female employees? Such actions risked being labelled as a form of reverse discrimination. Second, how would the company meet the challenge of workplace-adjustment issues faced by female employees in a work environment predominantly occupied by a male workforce? Third, the company would need to offer the female employees specific support facilities and retention initiatives. “The idea was not merely to promote the gender, but [to secure] places for capable female employees who . . . otherwise [would] not [be] considered for a suitable opening in a hard-core engineering organization dominated by male counterparts,” expressed Muthukumaran. INITIAL ROADBLOCK Muthukumaran and the head learning partner of ABB India jointly conducted extensive sensitization workshops across all ABB India’s operation units (both product and project divisions) in a rigorous schedule that spanned more than 18 months. Each workshop accommodated 30 participants comprising the HR partners, division leaders and division team members, including shop floor managers. Muthukumaran recalled that many of the business division heads and managers had resisted adding female employees, claiming that the project sites were not safe for females and often lacked even basic facilities such as washrooms. Some executives expressed the concern that if their own daughters or close female relatives were working in this division, they would face unsafe conditions by accepting such work. The counter question raised by Muthukumaran and her team was, “if the worksite was not safe for female employees, how could it be safe for male employees; therefore, was the issue not the need for gender parity

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Page 4 9B15C031 but the need for a safe work environment for all ABB India employees?” Also, the company faced resistance in recruiting female employees for the shop floor units, as the objectors cited the work environment of a large number of male employee groups having a rough attitude, the need to handle heavy instruments and bulky materials, and the risks posed by occupational hazards. Many persuasive and constructive discussions took place during the sensitization workshops, where Muthukumaran was finally able to convince the business division teams to adopt a more open-minded attitude toward the hiring of female employees. Muthukumaran explained that ABB India needed to improve the balance of its gender representation because of the increased number of women enrolled in graduate engineering degree programs in all major streams, including electrical engineering, as ABB was a prime recruiter of the programs’ graduates. This approach worked, and a few initiatives were later rolled out to provide basic amenities to the employees posted at the site as a result of negotiations with the client organization. In this way, Muthukumaran was able to cross the first hurdle. She admitted, however, that, unlike many other organizational change initiatives, where the change agent struggled for top management support, this situation was reversed, as the new MD, all the board members and the entire ABB India executive team had extended their full cooperation. The real challenge was to win over the confidence of the business division leaders and team members in materializing the company-determined DI initiatives. Problems remained at some of the project divisions, as many division heads were reluctant to assign female graduate trainees to the project site, citing such reasons as the unfavourable working conditions, inhospitable climate and local challenges. As the HR partners began to receive complaints from the female candidates based on their having been discriminated against in terms of learning opportunities, a mandate was imposed, stating that site placement was compulsory for all newly hired management trainees who had successfully completed the induction and on-the-job training programs. One year after their date of hire, new employees were to make a presentation on their learning from the site, and no discrimination would be made between the male and female trainees in this regard. This mandate helped to solve the gender- imbalance issue to a great extent (see Exhibits 5 and 6). SUPPORT AND INITIATIVES The company later added three full-fledged child care facilities to accommodate the needs of its female employees. The company’s plants and worksites had set up separate rooms for female employees, where they could change their clothing and have a rest. Maternity leaves were extended from an initial three months (on a paid basis) up to one year. Although beyond three months, the maternity leave was unpaid, many mothers chose to take the unpaid time to spend with their newborn baby, knowing that they could later return to their job. Although the company did not have any official policy to offer flexible hours to its female employees, in a few instances, such flexible hours had been granted to employees who approached management on the basis of genuine grounds. As the number of female employees gradually increased, the company prepared itself to adopt a strong sexual harassment policy. Also, following India’s passage of the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act in 2013,5 extensive training programs were organized separately for female employees and all operational units. In a physical classroom facility, a full- day program was conducted for different employee groups, covering the Act’s legal implications, the company’s code of behavioural conduct and the appeal procedure for any incidence of sexual harassment at the workplace. Simultaneously, e-module training materials were also prepared and circulated among all ABB India employees. At any ABB India worksite employing more than 10 female employees, a sexual 5 “Sexual Harrasment of Women at Workplace (Prevention, Prohibition and Redressal) Act,” Ministry of Law and Justice, 2013, http://wcd.nic.in/wcdact/womenactsex.pdf, accessed 14 September, 2015.

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Page 5 9B15C031 harassment committee was formed to deal with workplace prejudice and unfair conduct. The company described it as the “Respectful Workplace Policy.” According to Rekha Subramanium, who headed the Network Management Business Unit at ABB India:

I think the reason it was difficult to find and attract women in the engineering field was partly the perception that it was a male-dominated area — with long hours of work, issues with work-life balance, few facilities like childcare, or opportunities for maternity leave. But I was happy to see that these were increasingly becoming issues of the past, and progressive companies including ABB have come a long way by making that extra effort to create an environment that encourages gender diversity. Even three decades ago ABB was progressive enough to make me a job offer — while also clearly informing me that I would be a minority. I realized how much of a minority when I first joined the ABB factory in Vadodara. ABB provided me with a level playing field — no gender discrimination whatsoever, providing equal opportunities for male and female employees alike.

She became emotional when looking back at her long tenure with the company:

I started off as a design engineer for distribution relays and I then moved through various roles like Operations and Business Management, in a variety of business lines. Since last year I have been heading the local business unit of Network Management.

DI IMPLEMENTATION The company’s DI initiative had started to attract the attention of ABB’s other overseas units, as Muthukumaran headed the DI Working Group for ABB’s Indian, Middle Eastern and African units. The same group comprised other representative members, including regional heads, HR partners and business division leaders. The group met regularly to review and coordinate the progress of DI, identify gaps in business divisions where DI needed to be addressed and design a blueprint for implementation in each region. The DI head reported to ABB India’s head of HR, who reported to the MD. Also, the DI head had parallel access to both the business division leaders and the HR partners of each division, who played a crucial role in implementing the DI initiatives in their own divisions or units. By this time, the DI modules had been totally embedded in ABB India’s business divisions, and the HR partners of each division worked diligently to link the DI modules with several policy implications, including recruitment, performance appraisal, peer review and succession planning. The company even selected a few specific women’s colleges where it conducted campus placement interviews with graduate engineering trainees. Recently, five women’s engineering colleges were added to the campus hiring pool. ABB India boasted of its recent progress in hiring a record of 35 per cent female engineers as a result of its campus recruitment activities. At the level of lateral hires, an inclusion talent program was introduced, wherein a targeted development plan was underway to develop female managers for senior management positions in three to five years. The DI head and the talent acquisition team were found to be involved only up to the screening and short-listing of candidates, and they never attempted to influence the hiring decision once the selection process started. A half-day DI module was conducted in the induction program for all ABB India’s new employees. It was Muthukumaran’s opinion that diversity also led to better creativity and workplace innovation. However, she accepted that the company had yet to develop the specific metrics for measuring the impact of such DI initiatives on tangible business improvements. She commented, “[The] DI head should become redundant

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Page 6 9B15C031 over time when it would become the DNA of the organization and no separate function, department, or designation would be required to carry out such initiatives in ABB India.” PARTNERING WITH HR To carry out the recruitment activity for any identified position in ABB India, the concerned HR partner issued a directive noting that at least one female candidate needed to be interviewed. However, the final selection was to be based on the individual candidate’s demonstrated competencies. In 2013 and 2014, at least 20 per cent of the shop floor replacements were filled by female graduate trainees, leading to the current male-female ratio of 4:1 in the operational units of ABB India’s various business divisions. Some of the shop floor units had experienced a 25 to 30 per cent increase in productivity. The female employees also handled some of the toughest jobs in the power transformer division in the city of Vadodara in the state of Gujarat. As noted by a female HR partner in an ABB India division that boasted of its 65 female employees out a total workforece of 922:

In some of the functions like project management, we did not have any female employees at all. Then, based on [her] performance review record, initially one female employee was moved to the project management group, and she continued to do well. Ultimately a few others followed, and now this group had a fair representation of female workforce. This also opened up the scope of job rotation for them.

The HR partner of the company’s process automation divison added:

It took quite some time to get the mindset of people changed at business divisions. Even if, in the recruitment activity, interviewing a few female candidates was made compulsory for all identified positions, in the performance and potential review, a few female employees were ignored for higher positions, citing family issues and lack of mobility. The HR partner had to intervene and suggested [to] the reporting authority, not to ignore them based on such stereotyping, and, in case of genuine issues, let the candidate come up to state her inability to adjust with the new roles and responsibilities requiring more time and travel.

Even in succession planning, a minimum number of potential female employees needed to be considered for short-listing on the basis of their previous performance record (see Exhibits 7 and 8). REFLECTIONS AND EXPERIENCES “In my last 18 years . . . with this company I have never felt here that I am physically challenged,” said Ganesh, who needed a wheelchair to get around. He headed the All India Vendor Payments Section at ABB India. In 2004, when the company was consolidating its vendor payment system, he was a commerce graduate and had been asked by the chief financial officer to take charge of this integrated section, a postion that he gladly accepted. Despite his great physical difficulty, his job responsibilities included coordinating and visiting ABB India’s banks, financiers and vendors. He was also a member of the DI Working Group. Ganesh became emotional remembering his early days in another company before joining ABB India. On his third day with the previous company, he was asked to meet the manager with some files but fell out of his wheelchair while entering the manager’s office. He was subsequently asked to resign, due to the company’s perception of his inability to cope with the work environment. He had been in tears that day. However, having secured the full support of ABB India’s top management, bosses, peers and team members, Ganesh proudly said, “In my department when things got stuck because of difficulty in getting done, it came to me.”

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Page 7 9B15C031 When asked to share their feelings about ABB India, a couple of managers from various plants echoed that the company had zero tolerance for safety violations, non-compliance and any form of harassment toward its employees. The company was known for its focus on the modernization of technology, its incorporation of fresh ideas from young employees at various levels, the support and encouragement expressed from top management and, last but not the least, its equitable treatment of employees across all levels. Raja Radhakrishnan, the HR head at ABB India, explained that, as a group, ABB had always been held in high regard in terms of diversity and inclusion. He further clarified that ABB India’s board included a female board member who had been acting as the independent non-executive director even before the amended Companies Act 20136 came into force, mandating the presence of at least one female director on the board of any publicly listed company. Radhakrishnan added, “So at ABB India, we were not merely concerned with compliance but welcomed a female director, to have a perspective of inclusion.” It was similar to the experimentation at a few organizations in pursuing such innovative ideas as carbon credits, water harvesting and green operations. ABB India’s DI agenda had progressed through various phases, from initial ignorance to changing resistive mindsets to gradual acceptance and transition. According to Radhakrishnan, the effect was also visible in ABB India’s 2 to 3 per cent annual average increase in the female workforce. The company could also boast about its 40 expatriates engaged in the various business verticals on short-term (three to six months) or long-term (longer than six months) assignments. The HR team also had three expatriates from Tunisia, Germany and South Africa. Foreign nationals were also found in ABB India’s corporate functions, such as finance and public communications. Radhakrishnan made it clear, saying that “the parent campus of the company in Zurich had 65 foreign nationals represented out of [the] total manpower of close to 700. Therefore, intercultural sensitivity and pluralism was something the group always embraced.” As per the ABB standard, in general, 1 per cent of the total workforce in any overseas unit should have been backed by the foreign assignment posting. For managing the global operations in ABB, the parent company identified nine critical leadership competencies that were followed across units, one of which related to intercultural sensitivity. Radhakrishna commented, “Even if someone was technically sound with a proven performance record, [that individual] could not be selected for leading responsible global positions if [that person] scored badly on the intercultural sensitivity competency.” TRANSLATING TO BUSINESS ADVANTAGES Separate DI committees, comprising senior executives from the corresponding divisions, were in place to address issues in the product and project divisions. “The female graduate trainees visited the client sites on a regular basis for systems installation and integration,” said the system integration (SI) leader, commenting on the low-voltage product and system division, where, out of a total of 307 employees, 37 were female employees (including on the shop floor). He also commented that the division’s research and development unit had an engineer with a physical disability. The shop floor manager added:

This division certainly benefitted from employing female employees. The average productivity level of shop floor workers went up by 25 per cent to 30 per cent in the miniature circuit breaker unit. The detailed analysis revealed that the female workers on the shop floor took less frequent breaks, were faster in a few manual operative activities because of [the] thin and long shapes of their fingers, and engaged in less gossiping while on the job compared to their male companions.

6 “The Companies Act,” Ministy of Law and Justice, 2013, www.mca.gov.in/Ministry/pdf/CompaniesAct2013.pdf, accessed September 14, 2015.

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Page 8 9B15C031 He continued, “Some products contained very thin silver filaments that break easily. These filaments had to be handled with great care when winding in the product. The women handled the filaments with the minimum breakage, leading to a 15 per cent to 18 per cent reduction in wastage.” Similar experiences were also voiced by Anurag Agarwal, the Product Group Manager (PGM) for dry transformers at the company’s Savli plant at Vadodara in Gujarat state (in western India). The technologically advanced plant, which had started operation approximately two years earlier, was engaged in manufacturing dry and distribution transformers used for minimizing fire hazard and environmental contamination.7 Agarwal added:

The plant had a total of 140 staff out of which 20 were female employees. Again out of these 20 female employees, as many as 18 were placed on the shop floor . . . and two were absorbed into the transformer design section. This was one of the latest plants in ABB India, where female employees were engaged in shop floor operations.

Harshad Solanki, the Liquid Petroleum Gas (LPG) manager for distribution transformers at the Savli plant, clarified, “out of all female employees posted in the plant, on average, 75 per cent of them were better than their male counterparts in terms of discipline, behavioural conduct, and achieving goals or targets within deadlines.” He continued, “the female employees were not put into any night shift operations as the site was located 30 kilometers away from the city and no emergency support facility was available as of now.” However, both Agarwal and Solanki were hopeful that, as the number of female employees increased and the basic support facilities were made available, the plant could implement the practice of rotating the female employees through the operation’s different shifts. The company also opened avenues to expedite the career progression of the female workers on the shop floor units. A senior manager of the Low Voltage Power Products (LPP) division clarified:

The skilled female workers operating on the assembly line or shop floor units were separately identified and were made team leaders. These team leaders coordinated with other male and female members of the shop floor team and it considerably reduced the problem of integration between the male and female work groups.

Another senior manager at the high voltage power products division commented that “we did notice, over the past few years [that] productivity, efficiency, capacity utilization improved and wastage reduced at our division. Probably this success could be attributed to the optimum mix of diverse workforce.” Before, ABB India had typically hired those individuals who had gained relevant industry knowledge and background only from its close rivals, such as Siemens, GE, Schneider or others. Recently, however, the company had started hiring people from across various other industries who had relevant competencies and thus managed to fight the talent war in the open market. “It was an interesting development as the huge pressure for filling up a particular position with a narrow sourcing base could be avoided and at the same time the diversity count on the experience and background was widened,” said the HR partner of one of the divisions. “The average age group of employees in our division was 25 to 30 years. There was good coordination between the senior and junior employees in the sense that the seniors provided mentoring to the junior employees and the juniors had mutual respect for senior employees,” shared the HR head of the LPP division. He added:

Although as of now, no specific policy [has] existed to deal with the extended support provided to the physically disabled family member of an existing employee, the physically challenged son of one

7 “ABB Inaugurates Two New Manufacturing Plants for Power Products in India,” www.abb.co.in/cawp/seitp202/ cf0dd835b969ae95c1257c210051e12c.aspx accessed 21 July, 2014.

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of our shop floor employees was provided training here that helped him secure a job somewhere else. We would expect to have the company’s specific policy framework in the near future on this issue.

The LPG managers from Savli plant shared that

The average age group of employees on the shop floor was 25 years and that in the office was 30 to 35 years. So the members mixed well with each other and, as such, there was no perceived mental gap between the senior and junior members. Moreover, there was a common lunch facility with the same food served for officers and workers. The managers and workers were like a family here and there was no trade union at this plant.

MOVING AHEAD ABB India had yet to decide both on the physical disability aspect of potential employees and further review its DI agenda. The company did not ask for any mention of physical disability in the initial application form when recruiting for a specific position. However, according to Dileep Mypalli, head of the HR centre for talent acquisition at ABB India, as a result of the recently concluded annual general meeting, where shareholders had suggested the company consider recruiting candidates who had physical disabilities, “given the voice of shareholders, the board has already started thinking along this line and some concrete actions could be expected.” Mypalli explained that a more balanced representation of female candidates was required in the marketing and sales function. ABB India catered to both the business-to-business and business-to-consumer marketing and sales activities. Mypalli added that ABB India had identified three candidates for the firm’s “Global Trainee Scheme,” compared with the 28 such candidates identified by ABB Global. He indicated that the future agenda of DI initiatives could focus on age differentials, geographic locations and individual employees’ previous experiences. As the company was growing in India and abroad, both in terms of size and business, many issues occupied Muthukumaran. The company had yet to come up with a measure of DI benefits that percolated down to all the business streams and activities. As explained by the system integration leader of one of the product divisions, “business value chains needed to be re-analyzed and this would enable the top management and business heads to develop measures of effectiveness to support and realign DI initiatives.” Also, the diversity initiative was effective in bringing together people from differing backgrounds, cognitive levels, cultures and nationalities; but equally challenging was integrating them to reap the expected payoffs. Moreover, the parent organization had some definite expectations in terms of replicating ABB India’s DI program across its other overseas units, as no other unit had a formal DI head. Would ABB India’s shareholders support such initiatives on long-term values over the short-term measures of performance and returns? The recent Supreme Court verdict in April 20148 regarding the treatment of transgender individuals as a “third gender” category for employment purposes added another perspective to the company’s DI program. ABB’s chairperson was visiting in June 2014 to meet the Indian management team, and a special session had been scheduled to discuss in detail the status and progress of the DI program with specific reference to ABB India, the Middle East and Africa. How would Muthukumaran face these challenges both from inside and outside the organization? And how could ABB India ensure that such DI initiatives would be sustainable over time and be translated into tangible business advantages?

8 K.S. Radhakrishnan, Judgement of the Supreme Court of India, 2014, http://supremecourtofindia.nic.in/outtoday/wc40012.pdf, accessed September 14, 2015.

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EXHIBIT 1: ABB OPERATIONS IN INDIA

Note: PASS = Plug and Switch System; GIS = Geographic Information System; PLCC = Plastic Leaded Chip Carrier; PLC = Programmable Logic Controller Source: Company documents.

- Switches - Wiring accessories

- Medium voltage circuit breakers and switchgear

- Low voltage motors - Instrumentation

- High voltage breakers and disconnectors

- Large, medium and small power/ distribution/ traction transformers

- Relays - Substation consulting - High voltage machines - Motors and generators - Turbochargers - Insulation kits - PASS/ GIS - Dry and distribution transformers

- PLCC - High voltage machines

- High, medium and low voltage capacitors

- Substation automation products and systems

- Network management - Transmission and distribution

substations - Low voltage drives and motors - PLC, high voltage machines - Control products

- Insulation materials

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EXHIBIT 2: “REWIRE 6”

Note: SCM = supply chain management; MI = management information; LCC = line commutated converters; HR = human resources; IT = information technology; PM = performance management; LBU = local business unit; LSG = learning systems group; LPG = liquid petroleum gas; GGS = global grading system Source: Company documents.

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EXHIBIT 3: ABB GLOBAL’S CODE OF CONDUCT

Responsibility, Respect, and Determination: ABB employees and stakeholders apply these business principles to their work and actions on a daily basis. Our principles are about providing our customers with affordable products and services without compromising on quality or reliability. But they are also about doing the right thing more generally — following the law, acting honourably and treating each other with respect. The ABB Code of Conduct provides a framework for employees and stakeholders to put business principles into practice with utmost integrity. It is the foundation so that everything we do in connection to our work at ABB should be, and will be, measured against the highest possible standards of ethics and integrity. Unconditional commitment: We relentlessly set our standards higher for practical as well as ambitious reasons: our unconditional commitment to integrity helps us hire the best people, who develop and provide great products and services, which in turn attracts loyal customers and business partners. Trust and mutual respect among ABB employees and stakeholders is the core of our success, and they must be earned on a daily basis. Employees are expected to read the “ABB Code of Conduct” and use it in their day-to-day work, always keeping in mind that they each have a personal responsibility to incorporate the principles — and encourage others to incorporate the principles — into their actions. It is available in more than 40 languages to assure its accessibility to everyone at ABB. Employees who have questions or concerns, or who think that one of their colleagues may be falling short of our commitment to the “ABB Code of Conduct” and to working with utmost integrity, are expected to speak up. Who has to follow the ABB Code of Conduct? We expect all of our employees to read, acknowledge, and follow the “ABB Code of Conduct.” Failure to do so will result in disciplinary action and may lead to termination of employment with ABB. Additionally, we expect ABB third parties, consultants, contractors, and anyone assigned to provide temporary work or services for ABB, to follow the ABB Code of Conduct in connection to their work for our company. Failure to do so may result in termination of their relationship with ABB. Does ABB have a Supplier Code of Conduct? It is imperative to ABB that our suppliers, who we regard as our “extended enterprise,” conduct business respectfully and with a high standard of integrity, in line with the ABB business principles. As such, the “ABB Supplier Code of Conduct” is integrated into our day-to-day operations and is a fundamental part of our Supplier Qualification, Development and Evaluation Requirements. Source: “ABB Code of Conduct,” www.abb.com/cawp/abbzh252/45f145dc6cfc01cac12579b500315ed3.aspx, accessed March 6, 2014.

For the exclusive use of a. patel, 2020.

This document is authorized for use only by alpita patel in HRM6800 taught by Jonna Depugh, Johnson & Wales University from Apr 2020 to Oct 2020.

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EXHIBIT 4: ABB INDIA’S FINANCIAL HIGHLIGHTS, 2009 TO 2013

Description 2013 2012 2011 2010 2009 Share Capital (in millions of rupees) 423.8 423.8 423.8 423.8 423.8 Net Worth (in millions of rupees) 26,775.6 25, 980.5 25,345.2 24,237.0 24,097.3 Revenue from Operations (in millions of rupees) 77,219.9 75,649.9 74,651.5 63,726.3 63,097.7 Profit after Tax (PAT) (in millions of rupees) 1,793.1 1,374.1 1,845.4 632.3 3,546.4 Earnings Per Equity Share (in rupees) 8.46 6.48 8.71 2.98 16.74 PAT as % of Average Net Worth 6.80 5.35 7.44 2.62 15.71

Source: Company documents.

EXHIBIT 5: ABB INDIA’S GENDER AND AGE MIX (IN TERMS OF PROPORTION TO TOTAL WORKFORCE, ABSOLUTE AND PERCENTAGE FIGURES, PERIODIC TRENDS)

2010 2011 2012 2013

Total Employees 9,821 10,581 10,333 9,744 Male Employees 9,260 9,894 9,580 8,847 Female Employees 561 687 753 897 Percentage of Male Employees 94.29% 93.51% 92.71% 90.79%

Percentage of Female Employees 5.71% 6.49% 7.29% 9.21%

Age Mix (in years) Male Female Male Female Male Female Male Female 18-25 2,793 160 2,593 177 2,052 218 1,692 301 26-30 2,535 236 2,806 289 2,753 297 2,471 292 31-35 1,193 68 1,551 114 1,763 120 1,836 169 36-40 784 34 886 40 889 40 859 46 41-50 999 42 1,099 49 1,146 60 1,102 68 51-58 956 21 959 18 977 18 887 21

9,260 561 9,894 687 9,580 753 8,847 897 Source: Company documents.

EXHIBIT 6: ABB INDIA’S FEMALE EMPLOYEES’ WELL-BEING FACT SHEET, 2011 TO 2014

Source: Company documents.

2011-2012 2012-2013 2013-2014 Total Number of female employees 687 753 897 Number of female employees hired on a contractual basis 27 36 41 Number of permanent female employees who have disabilities 3 5 6 Number of female employees granted extended maternity leave 8 7 13 Recognized employee association Yes Yes Yes Percentage of permanent female employees who are members of the recognized association 20% 27% 31%

For the exclusive use of a. patel, 2020.

This document is authorized for use only by alpita patel in HRM6800 taught by Jonna Depugh, Johnson & Wales University from Apr 2020 to Oct 2020.

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EXHIBIT 7: ABB OPENS GENERATOR FACTORY IN BOOMING INDIAN WIND MARKET WHERE FEMALE EMPLOYEE IS ALSO A TEAM MEMBER.

Source: ABB, “What We Do: Landmark Projects on the Indian Subcontinent,” http://new.abb.com/indian-subcontinent/about/ what-we-do, accessed March 6, 2014.

EXHIBIT 8: A FEMALE SHOP FLOOR MANAGER AT AN ABB INDIA FACTORY

Source: ABB, “What We Do: Landmark Projects on the Indian Subcontinent,” http://new.abb.com/indian-subcontinent/ about/what-we-do, accessed March 6, 2014.

For the exclusive use of a. patel, 2020.

This document is authorized for use only by alpita patel in HRM6800 taught by Jonna Depugh, Johnson & Wales University from Apr 2020 to Oct 2020.