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The Hyundai Group

Case Report #2 for

Management 18

Submitted to: Prof. Teresita M. Banayag,MBA

Submitted by: Carla Rosales Nikko Lexis Tejano Jennifer Zonio May Hazel Ann Sanchez Ryan Rommel Rosario

high-waged future. Hyundai’s strategies of low wages and hard work were no longer effective. SECONDARY PROBLEM : 1. and a high return on investments as an added incentive. Chairman of the Hyundai Group of Companies. Hyundai started to move away from Korea’s slumping construction and shipbuilding industries and faced a troubled transition to a high-tech . . MAIN PROBLEM: Hyundai Group adopted and had been into practice the authoritarian style of management.The Hyundai Group TIME CONTEXT: Year 1987 POINT OF VIEW: Chung Se-Yung. 2. 3. With the rising competition and swelling demands from Korea’s more independent youth generation. Without taking into consideration the fact that during the last two decades of dynamic growth in operations. COMPANY OBJECTIVES : To gradually transform leadership strategies to meet the demands of the times and the demands of an increasingly complex socio-economic structure that was under going tremendous flux. The reported labor rebellion at Ulsan that were participated by 2000 Hyundai workers since December 1988. their management style hindered their evolution .

2. para-military . self-sufficient machine. The stagnation of the ratio of profits to revenue in recent years and the marginal possibility that overseas construction and shipbuilding be ever regain their former glory. 2. . 4. Hyundai construction crews at work are like disciplined . OPPORTUNITIES : 1. 3. Working fourteen-hour shifts and seven-day weeks . its semiconductor subsidiary which had been a disappointment. Hyundai Chairman’s audacity. bid on a projects first and learned how to build it later. WEAKNESSES : 1.SWOT ANALYSIS : STRENGTHS : 1. the construction crews do their faster than anyone else. and imagination remained to be a trademark of the man as the financial stakes multiplied. determination . Hyundai as one of the largest construction companies in the Middle East . Hyundai consistently landed major civil contracts and Chung became one of the privileged business leaders. As according to Ibrahim . Hyundai had invested heavily in Hyundai Electronics . The continued bout of labor strife has hurt production and created an image of a company unwilling to change with the times. single-minded . 3.

2. Pros : Cons : It would entail higher cost. ALTERNATIVE COURSES OF ACTIONS: 1. The nationwide uprising for democracy in 1986 brought a radical change to the relationship between employers and workers. . The collapse of oil prices and the Iran-Iraq war . however choked off much that business and the prolonged slump in the world shipping severely hurt the company’s shipbuilding subsidiary. The political force of labor in South Korea is so strong that it had managed to push ways up rapidly in the midst of an unprecedented surplus of highly educated labor which. 3. U. Hyundai has become the largest automobile manufacturer in Korea. pressure for the won to appreciate may reduce Korea’s competitive advantage before Hyundai could respond. THREATS : 1. The company should retain its current style of management but they should also give in to the demands of its workers for salary increase. which means higher prices for its products and The strike would stop and the company would continue its operations. 2. Hyundai became one of the largest construction companies in the Middle East. 3. 4. normally should depress wages.S.

. Cons: There could be a hassle upon hiring new applicants or workers. Costly training of these new workers and since the company has a goal of having bigger profits. 3. Firing of these workers would mean hiring new ones. 2. Pros: The current strike of their workers would stop. A lot of organizations would disagree and could result to a bad reputation that might affect company’s operations in the future. The company should retain its current management style and fire all the workers who participated on the strike. Workers might be used to it and the company will be abused. This would lessen the possibility of repeated occurrence with this kind of problem or a more serious one. Pros : Discontinued incurring of losses due to strike.services. they might do this through cost cutting and could result to low quality of products and services. and these new ones could be easily managed. Management should be reorganized and change to a more appropriate and efficient management style.

not only the current one but also the other upcoming problems that the company would encounter.- This would result to a better relationship with its workers and would help the company in achieving their goals. Hyundai would definitely vanquish all its problems. . The associated costs and possible arising problems are way much lesser than the other alternatives. Cons: The company (their staffs and workers) might have a hard time adjusting to the newly organized style of management. RECOMMENDATION: Among these three alternatives. alternative three is the more appropriate action to be adopted.