Intercultural Issues at Hyundai Inter-Cultural Thesis

Excerpt from Thesis :

Another major concern for Hyundai, already mentioned before in this introduction, is union efforts to unionize the plant that Hyundai operates in the United States. Union membership has declined steadily in the United States over the last couple of decades but their efforts remain very concerted and strong and the United Auto Workers (UAW), which is the union that works within the automakers domestic to the United States, are certainly no exception to that rule. Indeed, when General Motors filed for bankruptcy, which was eventually taken over and managed by the United States federal government, the unions were able to win a lot more power and concessions while investors took much of the brunt of the bankruptcy.

Obviously, and especially given their union issues in South Korea, Hyundai wishes to avoid a repeat of that dynamic and has made every effort possible to keep their United States operations non-union in nature. They have weathered the anti-Asian (bigoted or just pro-American) storm as well as other cultural concerns to become one of the clear automotive company powers operating in the United States and they are also able to clearly claim (correctly and honestly) that their cars are manufacturing domestically rather than being put together in Asia or some other country/region and then imported into the United States. Even so, some cultural concerns and challenges still exist.


In a nutshell, the major issue that Hyundai has and will face is the fact that they originate in one country and operate massively in another country and there are a number of major cultural and societal differences between the two areas. Examples these massive differences include societal norms, cultural norms, the array (or lack thereof) between the two countries, language barriers, different standards relating to courtesy and respect, perceptions and attitudes towards foreign car makers, human resource practices, management practices, attitudes towards unions from both corporate/employee/societal/political sources, and so forth.

Even if one temporary excludes the fact that importing corporate operations and culture from one region of the world to another, the cultural and societal variations and differences that exist just within the United States (or even within a single state) can vary quite a bit and this can affect any of the dynamics listed above. Some cities sin the United States in particular typify the term "melting pot" as applied to the United States and these cities include Los Angeles, New York, and San Francisco, just to name a few. This would perhaps explain why Hyundai chose Alabama as its United States plant side given that the area in question is a lot more culturally and societally homogenous than other areas in the United States. Its relative closeness to areas like the Northeast, Southeast and Midwestern United States is also probably a major plus for Hyundai as well.

Coming back to the United States culture (as varied as it tends to be) and its comparison and contrast to the South Korean culture, there are obviously a lot of differences and language is far from being the only dimensions that this can be applied to. Many of the common trends, behaviors and acceptable norms in South Korean culture may seem odd or even offensive to Americans and the same can certainly happen in reverse as well. The barriers in place are by no means limited to language or time zone differences between the two cultures. Normal and proper human resources and managerial practices can vary but even things like normal daily interactions can be tepid at best in certain situations, especially when speaking of interactions between people that were born or remain South Korean citizens and how/when they react with Americans and how that all plays out.

To put a fine point on the overall problem that has and must continue to be addressed by Hyundai, and as addressed in this report, is the fact that Hyundai must acclimate and customize its approach based on the fact that they are melding two entirely different cultures when they are corporately centered in the East and they operate extensively in a Western country like the United States. There are a lot of "sub-problems" that are part and parcel to this greater issue and those will be covered in the next section.


As noted in the introduction and the problem sections of this report, there are a number of sub-problems that are part of the cultural dynamic in play between Hyundai and the United States and those sub-problems will be covered in this section. The first major issue is the union concern that they must deal with. This is not something to uniue to the United States and, as noted before, is a concern that they had in their home country of South Korea as well. However, while the union activities in the United States are rarely violent, they can get rather dicey and can actually present great fiscal danger to union firms. A sterling example of this in motion was exemplified by the recent travails of Hostess, which many say was taken down as a corporation, at least in part, by unions refusing to give concessions that would allow Hostess to retain its solvency, at least for a time. In the end, one of the major unions refused to budge and the company was liquidated with the brand names being sold to other corporate entities with a lot of them vowing not to allow for union operations with the reopened factories and/or brands.

Another sub-problem, also as mentioned before, is the concept of "buy American" proponents and nationalism in general. Obviously, the amount of time that has passed since the Korean War has allowed the anti-Korean animosity to subside, even it was silly to begin with given that the United States was never at war with South Korea. After hitting a peak in the 1960's, American car companies have had a litany of issues including the near-collapse of Chrysler in the 1970's and the subsequent near-collapse of all three major United States automakers during the recent "Great Recession" of 2007-2009. General Motors (GM) and Chrysler had to be bailed out by the United States federal government. GM has often been referred to as "Government Motors" and Chrysler is now majority-owned by Italian automaker Fiat. Ford was the only major United States automaker that did not take a government bailout and/or allowed for a government-organized bankruptcy but they struggled mightily as well. These struggles, coupled with shoddy workmanship and/or styling, on part of all three automakers at one time or another has allowed foreign automakers manufacturing cars in the United States to make major inroads and Hyundai is far from being the only beneficiary of that with Japanese automakers like Toyota and Honda doing quite well in addition to Hyundai.

Another sub-problem is the language and time zone differences, both of which present logistical issues with a firm that operates both in the East and the West at the same time. However, this is far from being a problem unique to Hyundai or even the automotive industry, but it must be dealt with nonetheless. A related concern is the different societal and cultural norms that are entirely different between the two regions and countries and how those two different cultures can interact and meld together to form a corporate culture of mutual respect and form a single profitable corporate entity.

Chapter II - Methodology

Data & Sources Used

The research for this report is a good blend between qualitative and quantitative data. The quantitative data is useful to ascertain how Hyundai has fared with each of ventures. For example, Hyundai's automotive sales performance can be compared between how they did when they made their cars in Korea, how they did when they were made in Canada, and how they have done since the Montgomery plant was opened. It can also be compared how Hyundai did before the Great Recession and how they have done since then or any other number of time horizons and windows.

The qualitative data is useful because cultural and social struggles including battles with unions, culture clashes, different corporate/HR practices and so forth cannot really be defined or explained using statistics alone and even those statistical trends have to be explained in qualitative terms because the numbers alone do not come close to telling the story as to what is going on and why. For example, those looking at car buying trends from 2005 to the present would almost see a sharp uptick in purchases of Hyundai and Kia cars, especially since 2007, and wonder why that might be. Some might point to the recession and suggest that it was because of people wanting to spend less on cars but that is not something that statistics alone would reveal or confirm. It could also be that anti-foreign car people were relaxing their viewpoints or it could be that people liked the design…

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