The Daewoo Group Organization Essay Research Paper — страница 2

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protest against years of long hours and low pay. Daewoo shipbuilding suffered heavy loses due to workers demand for pay raises. 3. Operating in a Global Economy: International demands for free trade is forcing the Korean government to open its market. The chaebol will lose its protectionist import controls. Most recently, the North American Free Trade Agreement and the European Economic Community imposed trade limitations. 4. Product Quality from Korea: Korean products were considered cheap quality. Companies are trying to improve that image. 5. By the 1990s, Daewoo Group was heavily leveraged, major markets were stagnant, expenditures on R&D were increasing, labor unrest continued, and government policy adds to their worries. 6. Kim was most recently charged with allegedly

paying campaign contributions to former president Roh Tae Woo government in exchange for a large government contract to build a submarine base. SOLUTIONS: Daewoo Group president was an excellent entrepreneur. He led the company’s growth from an 18,000 initial capital value to $25 billion in annual sales. Some of the solutions he employed to counter problems identified in his company are as follows: 1. He used organizational politics to work with the government. He understood that to gain power, resources, and growth, he needed the protection of the government. 2. Daewoo Group was excellent at turning around faltering companies due to a well-managed, highly centralized organizational structure. Under Kim’s vision, he developed a unique culture in his chaebol known as the

Daewoo Spirit. This spirit consists of a commitment to creativity, challenge, and sacrifice. Kim believed in co-prosperity whereby the company provides value to employees, customers, suppliers, partners, and the country as a whole. 3. Daewoo enlarged its capital supply sources by diversifying its method of securing funds, including leasing and deferred payments. They raise funds successfully overseas for large foreign investment projects. 4. Daewoo established a number of joint ventures with U.S. and European companies. Under the vision 2000 campaign, Daewoo established joint-venture production facilities, invested in foreign facilities, established sales and local subsidiaries, and localized component production and other operations. This campaign is aimed at strengthening

Daewoo ‘s international competitiveness. 5. After two workers committed suicide, Kim developed a unique program to mend management-labor relations. Manager and company presidents were required to work on the assembly line, and assembly line workers could be promoted to management level. This policy is aimed at improving the management-labor relations as well as help managers understand the difficulties and problems on the assembly line. 6. Daewoo increased their R&D expenditure to be more internationally competitive. To boost this effort, Daewoo established a technology R&D team called the Institute for Advanced Engineering. This team used three strategies in technical development: competitiveness, managerial system development, and the use of technology network.

RECOMMENDATIONS: Because of the problems associated with developing a profitable industry in Korea, organizational politics with the government is the best strategy to follow. Not to conduct business with the government is certain death such as the fate of the Kukje Group. Korea is not a world pool of opportunities, like in America. People have to adapt to the governments rules to be successful. In Daewoo Groups situation, I would not have done anything different. Bonding with the government was a requirement. Establishing joint ventures in the global market is a survival strategy to remain competitive. Diversifying finances to make money grow is an investment strategy use by all businesses in the industry. Last, I would train my managers and workers to promote understanding just

like Kim. He showed his staff and families that he cared about them. The only thing I would have done different was to increase wages and improve work condition if government policies allowed.