Business Behaviour in Changing World
Arab Open University
Faculty of Business Studies
B300B – Business Behaviour in Changing World
(II)
Fall Semester 2012 -2013
Tutor-Marked Assignment, TMA
MounirAbboud
Question 1 Hyundai Motor Company (HMC) went through some difficulties during the 1980s and 1990s that affected its market position and brand image, in particular its U.S subsidiary, Hyundai Motor America (HMA).Identify the problems faced by HMC and the strategies it has adopted to improve its competitive position (on both domestic and foreign markets). Discuss to what extent these strategies were successful (25 marks - 1000 words). “Hyundai Car” developedinto a synonym for a cheap car, which is used only by the lower class or a cheapskate. Its content, performance and reputation has been through rosy and rough times. In 1986, Hyundai Motor America was launched in California, and sold its first car which is called subcompact Excel. In 1987, Hyundai expanded and opened a central state office beside Chicago. After a year, HMA started in Ontario, California, a $21 million distribution center. Afterwards, it opened a distribution center in Illinois. Hyundai’s sales increased in the U.S by 315 percent rise over 1998-2002. This company was first lead Ju-Young Chung, which is the founding chairman on this company. He was had an authoritarian style of leadership, top-down management, with a centralized and unified management structure. The initial ownership structure was dominated only by Mr. Chung, and his heirs. Additionally, there was a centralized decision-making process, and the strategic goals were only controlled by the Chung’s family. This centralized and patriarchal management structure and ownership facilitated Hyundai to pursue more autonomy over the external relationships. For instance, when HMC made a strategic alliance with Ford, Ju-Young Chung refused to move his managerial authority to Ford. However, the patriarchal and dominant style of leadership did now allow
Faculty of Business Studies
B300B – Business Behaviour in Changing World
(II)
Fall Semester 2012 -2013
Tutor-Marked Assignment, TMA
MounirAbboud
Question 1 Hyundai Motor Company (HMC) went through some difficulties during the 1980s and 1990s that affected its market position and brand image, in particular its U.S subsidiary, Hyundai Motor America (HMA).Identify the problems faced by HMC and the strategies it has adopted to improve its competitive position (on both domestic and foreign markets). Discuss to what extent these strategies were successful (25 marks - 1000 words). “Hyundai Car” developedinto a synonym for a cheap car, which is used only by the lower class or a cheapskate. Its content, performance and reputation has been through rosy and rough times. In 1986, Hyundai Motor America was launched in California, and sold its first car which is called subcompact Excel. In 1987, Hyundai expanded and opened a central state office beside Chicago. After a year, HMA started in Ontario, California, a $21 million distribution center. Afterwards, it opened a distribution center in Illinois. Hyundai’s sales increased in the U.S by 315 percent rise over 1998-2002. This company was first lead Ju-Young Chung, which is the founding chairman on this company. He was had an authoritarian style of leadership, top-down management, with a centralized and unified management structure. The initial ownership structure was dominated only by Mr. Chung, and his heirs. Additionally, there was a centralized decision-making process, and the strategic goals were only controlled by the Chung’s family. This centralized and patriarchal management structure and ownership facilitated Hyundai to pursue more autonomy over the external relationships. For instance, when HMC made a strategic alliance with Ford, Ju-Young Chung refused to move his managerial authority to Ford. However, the patriarchal and dominant style of leadership did now allow
References: CHUNG, M.-k. (2000). GLOBALIZATION STRATEGIES OF KOREAN MOTOR VEHICLE INDUSTRY: A CASE STUDY. Actes du GERPISA n°22. Freyssenet Michel, L. Y. (1996). Between Globalization and Regionalizatoin: What Future fo Automobile Industy. Actes du Gerpisa, 39-68. Jo, H. J. (2010, June). The Hyundai Way: The Evolution of a. Retrieved December 10, 2012, from http://www.globalasia.org/V5N2_Summer_2010/Hyung_Je_Jo.html?PHPSESSID=1b2f7e7b704db6561ffb4445649a45fa