The Background Of The Hyundai Motor Company Business Essay


Introduction of the company or organization, mission, vision, Objectives, Corporate Philosophy

According to our findings, Chung Ju Yung was founded the Hyundai Engineering and Construction Company in 1947 and the Hyundai Motor Company was later established in December 29, 1967. Hyundai Motor Company is a South Korean multinational automaker headquartered in Seoul, South Korea. The founder of Hyundai was Chung Ju Yung. The first model of the product in Hyundai Motor Company was Cortina, the model was released in cooperation with Ford Motor Company in 1968. When Hyundai wanted to develop their own car, they were hired George Turnbull, the former Managing Director of Austin Morris at British Leyland. He in turn hired five other top British car engineers. They were Kenneth Barnett body design, engineers John Simpson and Edward Chapman, John Crosthwaite ex-BRM as chassis engineer and Peter Slater as chief development engineer. Following this in 1975 the company released their first Korean car was Pony vehicle which featured the iconic powertrain technology that was provided by Japan’s Mitsubishi Motors. After that, the Hyundai Motor Company began to exports in the following year to Educator and thereafter to the Benelux Countries.

Throughout the 1980s Hyundai started exporting vehicles throughout Europe and the United States. One model that was particularly popular in the US was the Excel which was the first car that the company sold with front wheel drive. It went on to receive widespread critical acclaim, winning awards on many best-selling lists. During this period the company released the Stellar to replace the Cortina; this vehicle utilized rear wheel drive and offered additional luxuries such as air conditioning and electric locks. During the late 1990s Hyundai underwent aggressive re-branding in order to be perceived as a more upmarket company. This campaign was spearheaded by the fourth generation Sonata and a updated version of the Elantra model. In 2000 Hyundai began manufacturing the Santa Fe, a 4-door SUV that featured powerful front wheel drive and a front engine. This model was a huge success for the company on the American commercial market and it quickly became the company’s best-selling vehicle. The vehicle also garnered critical success winning various awards including Consumer Report’s ‘Top Pick’ award in 2008. On September 30, 2011, Yang Seung Suk announced his retirement as CEO of Hyundai Motor Co. It’s CEO positions was replacement by Chung Mong-koo. Recently, Hyundai Motor Company has six Centre’s worldwide. There were located three offices in Korea, one office in Germany, Japan and India. There is an American design center in California that develops designs for US markets. Hyundai also operates the world's largest integrated automobile manufacturing facility in Ulsan, which is capable of producing 1.6 million units annually. The company employs about 75,000 persons worldwide. Hyundai vehicles are sold in 193 countries through some 6,000dealerships and showrooms.

Management Philosophy

Hyundai Motor Company realizes the dream of mankind by creating a new future through ingenious thinking and continuously challenging new frontiers.

- Realization of Possibilities

- Unlimited Sense of Responsibility

- Respect for Mankind


"Lifetime partner in automobiles and beyond"

In Statement:

Hyundai Motor Company want to become a trusted lifetime partner of their customers, Hyundai will bring a new perspective to automobiles through innovative mobility solutions based on human-centric, eco-friendly technologies and services.


- To expand the concept of the automobile from the simple means of transportation that it is now, to a new space that connects people to their families, work, and society. By transforming the automobile into a happy space that people can rely on anywhere and at any time, the company aim to add new value to the traditional car.

-Deliver greater benefits and value to customers by securing cost competitiveness in the global market. From product development to after-sales service, Hyundai will ensure that every process related to the automobile is in line with providing the ultimate customer experience.

- Hyundai Motor Company automotive business will bring to life the stability and convenience that comes with innovative technologies.

- In addition, Hyundai will continue to realize sustainable management by ceaselessly developing new technologies that aim to enhance energy efficiency.

Methods used to collect the information.

Our topic is about conflict between employers and employees in Hyundai Motor Company. We found this issue when we do searching on the newspapers and online news. After the topic is selected, we continue to search more information related on this issue through internet, journal, newspaper, articles and textbook. From the internet, we get the information in details about the issue that Hyundai Motor Company facing. Besides that, we search the journal through online and get the information in order to support our solution used in problem solving. We also get information from textbook and used the theory relates to the issues.

Accurate and through use of course concepts in OB relates to the issues.

According to news (THE HANKYOREH), we found that Hyundai Motor Company’s labor protest has occurred mostly because of they hope to finally resolve illegal dispatch worker issue. This conflict happened between-in-house subcontractor employees and management at Hyundai Motor. The subcontractor employees wish to be converted to the full-time status once they have served for two years or more because full-time workers their benefit are higher than the subcontractor workers in term of bonus like wages, insurances and medical support.

If the subcontract workers accept the company‘s idea for new hires, that would mean 3,000 out of 8,000 subcontractor employees gaining full-time status, but the other 5,000 would remain lawful subcontracting employees, even though their employment is clearly illegal according to the standards of the Supreme Court ruling.

Another reason for the workers’ doing this extreme action is the reluctance of the car company’s regular workers to join the battle. In April 2012, The Hyundai Motor regular worker union decided on a joint demand with the temporary workers to have all in-house subcontractor employees hired on full time. The union also voted to take part in the struggle. But when the union showed signs of accepting the 3,000 new hires during a wage negotiation, the temporary workers opted to go it alone and pursue its own negotiations.

The reporter from Hankyoreh on Oct. 18 said that, Hyundai Motor still refuses to recognize the illegal employment. The special in-house subcontract discussions have been delayed because of circumstances with the union. "It’s baffling to see the temporary worker union going up on the pylon to protest."

Based on the news, we know that the issue is a relationship conflict. This conflict will occur that is aimed at undermining the other party. In order to overcome the problem, we find out several solutions to solve this conflict between employers and employees. The first solution is conflict and negotiation concept from organization behavior. This concept can help Hyundai Motor solving the problem in a peaceful way with some negotiation between the both involved parties. In addition, the second solution is employee motivation concept. In this concept, there are two theories can implement to the organization. That is employee engagement theory, and four-drive theory. By using these two theories, the Hyundai Company can motivate their workers and also fulfill the workers in term of reward system. The third solution is by using job satisfaction concept. By using this concept, we suggest the Hyundai Company to fulfill the job satisfaction of employees to resolve the conflict that company facing.

Integration of course concepts with information about the company

Solution 1

The first concept we can implement to solve this problem is by using conflict and negotiation concept. In this concept, there are few conflict handling style and we are using one of the conflicts handling style which is problem solving. Problem solving is a method to find a mutually beneficial solution to the disagreement (McShane, 2011). According to (Smutko, 2005) negotiators who take advantage of opportunities to employ a joint decision-making perspective, can seek integrative solutions. Problem solving is through enhanced communication opportunities they can shift the solutions possibilities frontier and expand the pie to find solutions that can be mutually agreed upon by both. This method used is because it involve the both parties Hyundai Motor and their employees to join together and identify the problem and create the best solution. If this method worked, both of the parties will have a win-win solution. This is because the parties had shared the information among them and allowed them to find a potential solution which can satisfy them. In additions, another possible method to solve Hyundai Motor issue is using compromise in conflict handling style. Compromising involves looking for a position in which you make concessions to some extent (McShane, 2011). It involves matching the other party’s concessions, making conditional promises or threats, and actively searching for a middle ground between the interests of the two parties (McShane, 2011). Based on (Smutko, 2005) compromise is the negotiators, still skillfully employing their individual and interactive negotiation perspectives can agree to compromise and divide the pie equally. If the issue is still remain unsolved for a long period, both parties wont gain any advantages and they will lose their precious time by bargaining each other to solve the problem. In this period, Hyundai Motor should quickly find a quick solution which can bring down the issue to deal with their workers. By compromising, Hyundai Motor could save their time dealing with the employee and could reduce the bad reputation that this issue will cause to them. The shorter the issue last, the lesser the damage done on Hyundai Motor’s reputation. Furthermore, negotiate with both parties are also able to help Hyundai Motor to solve the problem. Negotiation occurs whenever two or more conflicting parties attempt to resolve their divergent goals by redefining the terms of their interdependence (McShane, 2011). Hyundai Motor should try to negotiate with their subcontractor employees by a fair solution which can satisfy both parties. During the process of negotiation Hyundai Motor should understand what their workers needs and try to fulfill them with a better solution. This solution will consider about the benefits and losses that the company will pay if they used the solution. According to (Smutko, 2005) the negotiators determine the strengths and weaknesses; the resources could bring to the negotiation, and the resources that lack. Once Hyundai Motor had implement the solution, they should gather information about the feedback of the solution to determine whether the solution having misrepresentation or not. Meanwhile, the company should avoid any false promise to their workers due to the power of the labour union that could bring the reputation of the company to collapse. With a fair and good solution, the company will have a good relationship build among the Hyundai Motor and their workers.

Solution 2

The second concept we can implement motivation concept. There are several theory in the motivation concept. That is employee engagement, four drive theory, and so on. In order to solve the conflict between both party, the first theory we going to implement is employee engagement. When Hyundai implement the employee engagement, the employees will perform better and are more motivated. Beside, engaged employees will stay with the company, be an advocate of the company and its products and services, and contribute to bottom line business success. In addition, it also will create a sense of loyalty in a competitive environment and provides a high energy working environment. Engaged employees serve as a brand ambassador of the organization. This is because employee engagement levels have a direct impact on an employee’s performance and consequently on the company’s bottom-line. Engaged employees use their talent and strengths effectively at work every day to deliver high levels of performance consistently. At the same time, employees who are not engaged, not only erode the bottom-line with their lack of productivity, they also foster negativity at every opportunity, thus impacting team performance. The second concept to implement is four drive of motivation. The Four Drive theory is based on research that shows four underlying drives – the drive to Acquire & Achieve, to B (Millar, 2012)ond & Belong, to be Challenged & Comprehend and to Define & Defend. The first drive to implement is drive to acquire and achieve. This drive is typically addressed through an external reward system such as pay, bonus, incentives, and recognition .When Hyundai influence this through improving how their reward system provides feedback on good or poor performance, ensuring that their employees understand their total reward opportunities, enhancing their recognition program, and creating variable pay options that provides clear linkage to an individual’s increased performance. The second drive to implement is drive to belong and bond. This drive to bond is focused on creating positive personal relationship between workers and the organization. Hyundai can influence the drive to bond through providing more opportunities to build friendships and enhance camaraderie. Hyundai can creating a culture that encourages friendships, provides opportunities for bonding such as social gatherings, sponsoring sports teams, or community work and implement various teambuilding programs all can help increase this drive. The third drive to implement is drive to challenge and comprehend .Hyundai can through this drive to influence their workers through a number of avenues including how they design individual jobs such as variety, challenge, and learning. Hyundai should continue motivate their workers in term of training, professional development opportunities, and seeking employee input into strategic and operations decisions. The last drive to implement is drive to define and defend. Hyundai can through this drive to ensuring that workers have a positive image or relationship with the organization. For example, Hyundai can create a culture that is focused on meeting the needs of individuals and focusing their time, energy and resources on the competition instead of internal turf wars.

Solution 3

The third concept we are applying the job satisfaction concept. The conflicts happen between in-house subcontractor employees and management at Hyundai Motor is affect by the emotion of the in-house subcontractor employees. Emotions are directly affecting our behavior. In this conflict, the in- house subcontractor employees had perceived that they had lower salary and fewer benefits compare to full- time employees. In- house subcontractor feels not satisfy and belief they can get the same pay and same benefits as well as get the status of full- time employee, so they stand out to protest. In concept of organization behavior, the in- house employee’s attitude that climbed an electricity pylon to protest is affect by their emotion. This happen because the Hyundai Motor Company did not fulfill the in-house subcontractor employees’ job satisfaction. Job satisfaction is a person’s evaluation of his or her job work context (McShane, 2011). Employees will feel dissatisfaction if they did not get adequate remuneration. When they feel dissatisfaction they will neglect then reduce work effort, maybe will response loyalty to company by waiting for the situation to improve their job satisfaction, some of them will voice out and complain to changing the situation and some will exit or leave the particular company.

Hyundai Motor Company should pay the same compensate and give the same benefits to all of the employees to fulfill the employees’ job satisfaction. Employees are the most valuable asset for any of the organization. The organization should have to pay the salary and commitment to employees' welfare on the other. Management should frame policies to provide fair and equitable benefits to all of the employees to sustain their efficiency on the one hand and growth of the organization on the other (Gupta, 2011). If Hyundai Motor Company pay the same compensate to all employees, they will feel satisfies, the conflict between in-house subcontractor employees and management at Hyundai Motor Company would not happen.

Moreover, Hyundai Motor Company can give their employees compensate in fair pay using the job evaluation. According to the (Muhammad Ali EL-Hajji, 2011), to ensure fair pay, it needs to be associated with the BPEST analysis (business, political, economic, social, technological factors). Job evaluation is viewed as a systematic and judgmental process used in determining the appropriate rate for the current job. It is systematic, because it is not processed randomly, but purposely/meaningfully and carefully. It is worth emphasizing that job evaluation is basically concerned with the internal coherent and consistent pay (i.e. internal equity) and it can be used as a basis for external pay comparisons. By using the job evaluation to give the employees compensate in fair pay, Hyundai Motor Company can avoid the conflict of in- house subcontractor that not satisfy their job pay because the compensate will give according to job evaluation.

Extent to which recommendations are consistent with analysis