Examining a Business Failure: Daewoo

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  • Topic: GM Daewoo, Corporation, Yonsei University
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  • Published : May 16, 2013
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Running head: EXAMINING A BUSINESS FAILURE: DAEWOO

Examining a Business Failure: Daewoo
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University of Phoenix
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EXAMINIG THE BUSINESS FAILURE: DAEWOO

Daewoo is South Korean based textile company founded by Kim Woo Choong. It was started as small entrepreneur and by the help of free market theory turned in to Giant Corporation, which extended its trade and product world wide. But the ladder of success, which was going up suddenly fell down, according to Ihlwan, when company suffered $32 billion loss, along with gigantic debt due to sleaze of employees and slackness. Ihlwan writes in business week that “Korea's chaebol relied on accounting maneuvers to plump up profits, diminish liabilities, and generally make the business look good. But the scale at Daewoo was breathtaking” (p. 4). Means, apparently the dealings were looking fine but the hidden situation was the false making of profit by corruption and bribery.

In order to understand the failure of Daewoo, scholars suggested different theories and behaviors, for example, number one is Organizational Behavior. According to Robbin and Judge, organizational behavior or attitude is, “A field of study that investigates the impact that individuals, groups, and structure has on behavior within organizations, for the purpose of applying such knowledge toward improving an organization’s effectiveness” (p. 9). This theory suggests that how individuals, groups, and structures work together and helps each other to improve the conditions and profits of an organization. It is further sub-divided in change process. By the help of this theory we may understand the failure of Daewoo in international market.

Change Process, which is subtype of organizational behavior, explains how the company copes up with changes. This change may come either with in the government or outside of government. For example, the theory of free market assist Daewoo...
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