Question: Given the success of Hyundai cars in the U.S. market in recent years, are they going to be another major competitive forces next to Japanese cars that three American automakers must pay attention to?
Based on the case study presented, it seems that Hyundai will be a force to reckon with, if not globally, in the United States for years to come. This is hugely due to the mindset of its leader, Chairman Chung Mong-Koo. Right from the start, his mind was set to making a name for Hyundai globally. He led a company to be successful in the global market. He made innovative steps to bring his vision to reality. His 10-year warranty product conveyed Hyundai commitment to both quality and to its customer base. This was recognized by the global market and was positively accepted. By 2009, Hyundai was considered America’s most successful car company (McIntyre, 2009), as compared to top American cars companies (GM & Ford), which posted less sales than expected that year.
One reason for Hyundai’s success is because of the good quality of the cars it builds. Its line-up is also well distributed, having cars in all slots of the car market. It has car models in the entry-level category down to minivans, SUVs and small sedans as well. Another major factor for its success is its strategy of bringing people in their showrooms. They offered a package that would take care of its customers and guarantee a risk-free purchase. This was during the recession, where most people were afraid of losing their jobs. Hyundai offered a 3-month payment free option should the new car owner lose their job and if they still will not be able to make the payments themselves after this 3-month period, the cars will be taken back, obligation-free. For most people, that is assurance beyond expectations.
However, one can argue that Hyundai’s success is largely based on it being still a family-run business, or a Chaebol (Daly and Moxley, 2012). Behind Hyundai’s success is strong leadership and determination. It is backed up by strong business culture, hard-work and ambition to be at the top of their game.
Question: Do you think Chung Mong-Koo is an effective corporate leader? Do you think his leadership would be successful in a corporate structure that is not chaebol? Explain your reasoning.
It is very evident with Hyundai’s global success that Chung Mong-Koo would still be as effective as he is running a Chaebol company as one that is not. It is not because he is running a Chaebol company that he is effective. It is because of his mindset. He was able to change how his subordinates think. He used change and its management to fuel his success (Shea and Solomon, 2013). From the engineers to the sales people under him, he elicited change. He was able to create an effective mix of quality improvement, design, marketing strategies and people management, that propelled Hyundai to the top of the auto-industry. He pushed his engineers to build top quality cars and committed this consistently to its customers via a very effective 10-year warranty plan, which in itself was a highly-thought off but risky undertaking. He also made sure that decision making was made more linear than hierarchical by providing information accessible throughout the organization. On top of all these, he compensated his people sufficiently for their efforts. He was not afraid to hire outside the Chaebol, especially when it came to positions that influenced design and quality. These people were provided technological tools significantly more upgraded to deliver top quality results.
Chung has been determined to bring quality to all his cars. With quality being top of mind, he went a long way. He was autocratic and most of the time forceful. But this is what drove Hyundai to success. He did not tolerate the smallest of flaws (Jin, 2014). He wanted top-notch at all times. This enabled Hyundai to focus on details and improve quality even more. When he says to do it, his executives made it happen. All because they believe in his mindset and eventually shared his outlook on how to do things, consistently with top quality in mind. So whatever company Chung leads, one would expect success since someone who has its product’s quality in mind for total customer satisfaction, is someone who is to succeed in the corporate world.
References
Daly, J and Moxley, M. (2012, August 23). Report on Business. [How Hyundai Became the Auto Industry’s Pacesetter]. Retrieved from http://www.theglobeandmail.com/report-on-business/rob-magazine/how-hyundai-became-the-auto-industrys-pacesetter/article4324173/?page=all
Jin, Hyunjoo. (2014, November 2). Transportation. [Meet the Man Who Wants To Take Hyundai to the Next Level]. Retrieved from http://www.businessinsider.com/r-after-the-bulldozer-hyundais-consensus-building-heir-apparent-2014-11
McIntyre, D. (2009, March 4). 24/7 Wall St. [Hyundai: America’s Most Successful Car Company]. Retrieved from http://content.time.com/time/business/article/0,8599,1882987,00.html
Shea, G and Solomon, C. (2013). Change Management is Bigger Than Leadership. Harvard Business Review. Retrieved from https://hbr.org/2013/03/change-management-is-bigger-th
