Shoring of Hyundai to the 'Literature Review' chapter
- Length: 10 pages
- Sources: 15
- Subject: Business
- Type: 'Literature Review' chapter
- Paper: #11823911
Excerpt from 'Literature Review' chapter :
Some of the reasons why Hyundai relocated to Alabama State of the U.S.A. include the failure that she suffered in Korea. With the influx of cheap imported cars and the violent nature of the labor unions in Korea, the company had started to suffer serious decline in profits; this necessitated the move to look for other alternatives of operation. This landed the company in the U.S. As the revolution of the manufacturing companies and industries in the country (Carmel & Tjia, 2005). This is the place that provided the utmost and best labor regulations for the company. Another significant factor is the state government's incentive package. The incentive was very attractive to Hyundai as they could abate tax if they relocated there. This was a massive boost to the process of adaptation and profit realization. Moreover, the company was offered a site for setting their operations and a good access to the road and bridge. This was a significant incentive as it provided the perfect setting and placing for the company. Additionally, the state also promised the company to give education and training required by the job applicants in the firm. This meant that the company could save as much as $253 million; cutting costs incurred in relocating by such prodigious amounts would position the company in the superlative place to see a tremendous achievement within the near future for the company. Another incentive offered to the company is that of support in building the firm. The factor in the incentive that ensured that the company managed well in the state is the offer to create and nature a friendship between the Korean and American culture.
In off shoring, the biggest challenge is always managing the intercultural differences. The globalization of the worlds sectors has had its impact on the cross-cultural management. Like many other sectors where globalization has taken the toll, the communication sector is not an exception (Oshri, 2011). When a company relocates; and all the other factors are intact, the progression of the company is swift. However, complications arise when there is evident growth of the company. The company grows in production requirements, and consequently, the number of employees has to be increased. They rise through from a few hundred employees to thousands and hence the access to employees who have a base experience to the company's original culture. The employees begin to express emotional tiredness and frictions begin to rise. Communication failures take effect and mixed tensions and matrix of relationships crop within the organization or firm. These are some of the challenges associated with the off shoring of a company to a region that has an utterly dissimilar culture as to that of the home place. The whole new hiring always presents a new structure that is not similar to the domestic management structure. This challenge can worsen to the extent of having retrenching exercise to vent off the workers who do not have the experience. However, this is a quick fix to the predicament as it is obviously evident that the company needs these workers (Oshri, 2011). The managerial practices are influenced by the cultural beliefs of the people. For instance, in Korea, respect and obedience for superior person is supposed to be unquestionable. This is dangerous as it eliminates chances of sourcing quality information from co-workers. For instance, in the 1990's, due to the difference in rank gaps, several planes crashed. This is because the subordinates would not utter words that contrast the superiors' opinion. This unwavering obedience cannot be said the same of the American people. The American decision making practice begins from the bottom to the top rank.
In the case of Hyundai motors, all the other factors in America were conducive for the success. The labor, market, policies and technology acquisition among others were all in place for the company to pick easily. The worry came with the factor of the cultural differences between the two societies. Before relocating to the U.S., Hyundai had been in Canada and, therefore, was not strange to establishing effective managerial and communication practices (Oshri, 2011). The factors that facilitated the easy manner in which the company overcame these cultural management issues that would arise include; the support that she got from the, local state, government. Education is imperative for survival in this ever changing world. Therefore, when the Alabama state offered to provide basic work training for the applicants of the job in the company's firm, this was a significant boost. The people could adapt to the traditional approach of management from the Korean managers easily.
Secondly, the intercultural differences between the American and the Korean people are diverse. Therefore, there needed to be stern action plan to deal with the communication, and culture acceptance between the two groups of people (S. Kahai, Sara & P. Kahai, 2011). However, in addressing the issue, the problem between Hyundai and American people was not as large as it was expected. This is due to the history that existed. South Korea, Japan and china, are originally from the same geographical region. Historically, they also share a lot in common as they are considered to have a common origin, differing in minor ways from each other. Therefore, this means that their management systems are not different; neither is the structure of the language for both nations. The practice in these cultures calls for strict observance of hierarchy and hence the unquestionable obedience to the superiors. On the contrary, the western people that are the Americans are people who are liberal in thinking, hence individualistic. This means that the two groups would conflict due to these differences in the cultural practices (Kahai et al., 2011). This conflict was evaded and solved by the fact that Japan had already established her culture in the United States market. Therefore, the people had a sample behavior of what to expect mostly from the Korean people (Lansbury et al., 2007). The similarity in the japans and Korean cultures, and language structure enabled a fast adaptation process for the two groups in the process of settling in America. Additionally, the multicultural differences that occur in other situations were, therefore, easily evaded. The harmonic relations between the superiors and the subordinate staff are a practice that has stringently infiltrated the Korean culture and is hard to manipulate. Their managements always expect natural obedience and, therefore, knowing this fact, the American population working in the firm was assured of their jobs as long as they behaved in manner r that pleases the managers and supervisors.
Communication is a basic success factor for any venture or organization. Automotive industry equally relies on communication to manage its resources and the daily activities (Tejera 2012). Moreover, communication is useful in attending to the customers; therefore, Hyundai needed an effective strategic communication channel developments. To avoid miscommunications, cultural awareness is another feature that Hyundai invested maximally in development (Jo, & You, 2011). This ensured there was a well established communication across cultures. Consequently, the establishment of this communication advantage ensured that less time and resources were wasted in dealing with the communication issues that may arise. This allowed the company workforce to focus solely on the production and sales process; hence the reason Hyundai managed to establish itself in America easily. To tackle the awareness, Hyundai organizes a three-month duty assignment for employees to go and work from oversees. For instance, it sends the team to other countries and places to go and work as they observe from a different cultural setting. This expands the awareness on multicultural challenges management. Cultural awareness eliminates chances of misinterpretation and misunderstanding of information or a message.
The Hyundai motors company has continued to develop itself in the world markets. The global coverage of Hyundai has expanded to all potential markets across the world, with sales going global. The company focuses on the essential aspect of quality improvement and innovation (Tejera, 2012). For a company to achieve such international coverage, an effective communication strategy is necessary. There are many cultural and other communication barriers to overcome. The Hyundai motors has established that tackling intercultural differences requires adaptation of new organizational polices to fit in the context of the setting in which the business is operating. The focus of Hyundai is on effective management that is proactive in communication with the workforce and the customers. The customers are always the priority in all areas of business operation.
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