Hyundai Case Study Essay

Part IOverview1. Time ContextMr. Muhammad Soeparno was appointed by thegovernment of Indonesia to succeed Mr. Lumenta as President theater director of GarudaIndonesia Airways on January 6, 1988. He had to announce his decision in frontof his head quarters employees during the monthly flag raising ceremony heldon the 17th of each month. Thus, the problem has to be solved on the 17thJanuary, 11 days after his inauguration.2. ViewpointFrom the introductory place, the problem was aroused fromthe naked as a jaybird President Director of the caller. And the person who has the abilityand authority to solve the problem was Mr. Muhammad Soeparno.3. Major Policy StatementGaruda Indonesia Airways was an air passage come with. Itwas the first airline beau monde in Indonesia and was reported as the biggest inthe Southern cerebral hemisphere. And since it was owned by the government of Indonesia,its basic close is to choke off the success of the dampment of airtransportation and tourism of the country.4. setting of the CaseGaruda Indonesia Airways was able to operate infull swing parade 1, 1950 since the historical time an aircraft bearing theIndonesian flag crossed the skies carrying the name of Indonesian Airway. Itsflight net oeuvre rund to hit the ceiling encompassing all of Indonesia, Singapore,Bangkok, manila and was able to establish routes reaching Europe and Tokyo. Garuda continued to flummox and in stages beganreplacing their propellered aircraft with full jets. In 1960s, Garuda had beenthe only airline operating the domestic routes. However, such monopoly positionhad failed to help the company to grow because the Indonesian economy had beendeteriorating during that decade. In 1966, the impertinently Order Government took over Garuda(Soekarno) as it was going by difficult times and was unable to contri scarceetowards national development. The result was a sustained period of high growthin the economy. The petroleum boom in the early 1970s generated a higher economical growth for Indonesia and for this in turn sustained passengers growthfor Garuda. In 1979, the improvement works argon done on runways in majorairports (Supono). And by this time, Garuda experienced another breakdownbecause of its suffering services and coincidence of almost simultaneous delivery ofairbuses and a decline to the number of passengers. And these problems wereresolved severalizely on 1984 (Lumenta).5. Environment AnalysisA. SWOT AnalysisStrengths Garuda Indonesiamonopolizes the use of jets It wasproclaimed as the biggest airline in the Southern Hemisphere It has twosubsidiary companies, one providing airline catering in the three majorairports in Indonesia and the other running a cooking stove of resort hotels. Garuda wasconsidered that has much below rates that offered by Asias more popularairlines like Singapore, Thai International, japan or Cathay Pacific. Weaknesses Systems in allaspects sales, preparation, flight, supervisory The risk ofha ving the magnitude of the debt servicing Inefficiency ofits international operations The companysorganization is still unsteady that makes the organizational behaviorincompetent in supporting the company Opportunities Political willof the government in tourism The still-abundant-availableseat capacity The economicgrowth of IndonesiaThreats The moreincreasing arguing The uncertaineconomic situation The bureaucracywhich still caused problems in managing company professionalismB. CompetitorAnalysisThe directcompetitors of Garuda atomic number 18 Singapore, Thai International, Japan and CathayPacific Airlines. These airlines argon more popular than Garuda and offer alittle higher cost than Garuda. They render services better.6. Present Company departmental PlansA. Product Planningand Development- expansion of flight network and improvement works on airportsand runways B. commercialize Planning-it serves for all passengersC. FinancialPlanning- no definite financial planning giveed D . ProductionPlanning- it acquires new equipments and aircrafts by buying E. ManpowerPlanning- veracious performance of the staffF. Organizationalplanning- true implementation of strategiesPart IIProblem Resolution1. Background of the ProblemIt was in 1981 that Garuda proclaimed as thebiggest airline in the Southern Hemisphere and has reported a net going of U.S.$ 46 gazillion for the year ended December 1983 leaving Mr. R.A.J. Lumenta, thenew President of Garuda, debts amounting to U.S. $ 1.3 billion at 12% interestper annum. Mr. Lumenta adopted a strategic thinking in making plans to turn thecompanys situation around including Garudas wishing of competitiveness inservice, visibility and distribution. And so, he almost did, and then he was replacedby Mr. Mohammad Soeparno.2. Statement of the ProblemHow would Mr. Mohammad Soeparno maintain Mr.Lumentas eager in resolving the companys problem which would enhance thecompanys ability to pot with the challenges it may face during h is term andbeyond?3. Statement of ObjectivesThe company, after addressing the root problemshould achieve and expect the following objectives a. To improveGaruda Indonesias internal control especially in policy of setting a newmanagement team of the company. b. To develop thecompanys plans in addressing the maintenance stability of the company. c. To be moreresponsive to the market demands and to be adeptto adapting those stirs. d. To keep ahead ofthe competition intodays age of modern air travel. 4. Areas of ConsiderationThe areas of consideration in solving the probleminclude the history of the companys management and their standing under eachmanagement, the outside environment of the company and their competitors.5. Alternative Courses of natural processA. Mr. Mohammad Soeparnoshould continue the policies what Mr. R.A.J. Lumenta has contributed as aresponse to the increasing uncertainties of the company. B. Mr. MohammadSoeparno should formulate a new set of policies for the comp any to attest hisworth as the new president of the company. C. Mr. MohammadSoeparno should decline from the position.6. Analysis of the AlternativesA. Continuation ofthe PoliciesAdvantages There is a less possibilityof risk because the policies are prove to be impelling. Mr. Soeparnowould be tested to flexibility since the policies were not his own. The policieswere already given the company a in force(p) response on the uncertainties in and outof the company. Disadvantages The existingpolicies might not be successful to be carried out by Mr. Soeparno. There might be agap between his understanding about the policies and the understanding of theperson who originally formulated them.B. verbalism ofNew PoliciesAdvantages Mr. Soeparnowould prove that he was worth of the position he was given. Formulation ofnew set of policies means that there is a chance of gaining more respect fromthe company organization. Disadvantages The new set ofpolicies might not be effective as the old policiesthe company currently has. The company wasnot ready to for new set of policies. C. Declining fromthe PositionAdvantages Mr. Soeparnowould happen less responsibility in the companys fate. Mr. Soeparnowould feel not pressured.Disadvantages Mr. Soeparnoshows that he is not competitive and not worthy of the position. Mr. Soeparnowould feel disappointment from the organization.7. Decision StatementAfter analyzing the alternating(a) courses of actionpresented above, it showed that the best was the first alternative. It isbecause aside from it generates more advantages than the others, it also showsthat the company has already been attached to it and the result was not onlygood but better. The existing policies managed the company to stand again fromits depression. The other two alternatives were also be solutions but they areonly getting the company into risk again.Part IIIImplementation Program1. Action PlansA. Long-term ActionPlansa. Garudasimprovement in implementing its s trategy regarding its structure, system, ardour (leadership), staff andskill. b. Garudahas to keep up with the changes in the internel and external environment. B. Short-termAction Plansa. Sustenance of the policies to maintain theproductivity of the company. b. Improvement ofsome of the policies for more sweetening of the companys productivity as awhole.2. Proposed Companyprocessal PlansA. Product Planningand Development- periodically infrastructure improvements for better services B. Market Planning-it serves for all passengers and reach for them perfectly with high hospitality C.FinancialPlanning- sells theunproductive assetsD. ProductionPlanning- it acquires new equipments and aircrafts by buying E. ManpowerPlanning- good teaching system will be conducted regularly for better outcomesfrom customers and organization F. Organizationalplanning- better implementation of the policies and strategies of the company3. some other Problems and Proposed ancestorsOther ProblemsProposed SolutionsEmployee/Staff-Customer RelationshipGaruda should have a good training system and have some effectualness in increasing customer satisfaction. Domestic Airline CompetitionIndonesia spate still look at price as a determinant variable. So the lower price strategy that has been implemented by its competitor, the new comer firm could disturb Garuda market. Garuda could loose its loyal customer. So strategy that must be done by Garuda is by upward(a) its quality service. Securiry IssueGaruda have to respond to the terrorist attacks by improving procedures and aircraft certification to help restore travelers confidence. Even, it means price, but it is very useful for Garudas future. Safety and security is the most important thing that are needed by the passenger.Part1Overview1. Time ContextThe problem has to besolved in the year 1989.2. ViewpointMr. Chung Ju Yung theowner of the Hyundai group has the ability and authority to solve the companyproblem. 3. Major PolicyStatement The Hyundai group featuredas one of the head teacher engines of the Korean economic miracle in the other(prenominal) twodecades. The Hyundai group makes awide range of products- ships, bridges,cars, cement, steel and etc. They do not only prosper there in Korea but alsoin Middle East. They even gained praises from New York Times correspondent. 4. Background ofthe CaseCompanyHyundai Company wasfounded by Chung Ju Yung in 1967 and immediately partnered with the ford motorcompany to conjure the Cortina compact car in 1968. Hyundai focused onmanufacturing quality economy cars and began exporting excel to the Unitedstates in 1986. now Hyundai consistently ranks among the top quality importcars in the U.S. Hyundai group manufacture products such as ships,bridges, buildings, cars, cement, steel, chemicals, oil oil production platforms,microchips, sneakers, pipes, furniture and locomotives. In early 1980s hedecided to make Hyundai a factor in the electronics industry, focusing at first on production of semiconductors. Later Hyundai become the deepst automobilemanufacturer in Korea. For Hyundai to grow as an extension of its founderspersonality it is not move that the management modality in the organizationhad always been dictatorial.IndustryHyundai group covered all kinds of industry. Itis involved in ship building, construction of bridges, cars, otherinfrastructure, steel, cements, oil drilling platforms and even manufacturingof microchips and became the largest enterprise in South Korea. ManagementTheprojects and activities of Hyundai is headed by its owner Mr. Chung Ju Yung andmanaged by his surviving son Mr. Chung Mong Ku. It is also said that part ofthe private enterprises in Korea are open to the government, thus the presidentis also responsible for the management of Korea.5. Environmental Analysisa. SWOT analysisStrengths1. well-set Domestic Market2. Good Quality of products3. Cheap labor costWeaknesses1. Poor management ardor2. Making poor investment decisionOpportunitiesMiddle East warm welcome to Hyundai gives them a good start in international business. The Government sees Hyundai with a good impression.Threats1. The competitors of Hyundai have grown rapidly forthe past year.b. Competitor analysisThe competitors ofHyundai Group are Samsung electronics and Lucky Gold star which had made asuccessful transition to large scale chip production. Hyundai Electronicsperformance had been a disappointment, losing $11.9 million. Rivals have largeelectronics subsidiaries. Another competitor of Hyundai is the Daewoo. Daewoois the supplier of the successful leading adjoin computer. 6. Present CompanyDepartmental Plansa. ProductPlanning and DevelopmentThe Hyundai groupplanning to put their products to the construction of buildings. To Korea or toother countries. b. MarketPlanningThe plan is designatedto domestic and foreign country.c. FinancialPlanningThe financial is comefrom in the land of Chung Ju Yung. And from the help of the other b usiness manwho helped him.d. ProductionPlanningHyundai company doesnot only focus on production of cars but also other projects such as governmentconstruction of bridges, cars, ship building, other infrastructure, steel,cement, oil drilling platforms and even manufacturing of microchips. e. ManpowerPlanningHyundai company hasseparate workers for car manufacturing for road construction. f. Organizational PlanningHyundai company isowned by Mr. Chung Ju Yung and managed by his surviving sonMr. Chung Mong Ku.Part2ProblemResolution1. Background of the problemThe problem of HyundaiGroup was deemed to start in 1987 when it has experienced a loss of 11.9million dollars. They have invested in te Valley project which was seen tobe a loss even at its proposition. Hyundai tried to jump to the productionsophisticated one-megabit dynamic random access memory chips instead ofpursuing the market for 256K. They are said to be not fully pull to hightechnology. They only see semiconductors scantily as an accessory but not assomething to be done because competitors are doing it. 2. Statement of the ProblemWhatchanges in management style should the top management adopt to satisfy theof necessity of the workers on strike and so as to break the series of rebellion?3. Statement of ObjectivesHyundai Group of companies would like to Ceasethe uprise of the employees of Hyundai Group. Toregain the trust of the public to the firm especially to its chairman Mr.Chung. Toget back the shattered hope of peace and wizard among all nations that wascaused by Hyundais unpeaceful solution to the conflict. 4. Areas of Consideration In Korea, the private sector contend animportant role in Koreas economic development. They are interdependent with anumber of other forces such as government, economic and non economic factors. -Fulleighty percent of Koreas economy is open and heavily dependent on theinternational economy.5. Alternative Courses of Action TheHyundai top management should amend thei r present authoritarian style of leadershipto another style which is more employee-friendly. Hyundaishould just give the employees the increase in wage that they are demanding. Fullydetach Hyundai from the government influences.6. Analysis of Alternatives1. The Hyundai topmanagement should amend their present authoritarian style of leadership toanother style which is more employee-friendly. Advantages This would improve the relationship ofthe employee and the management subsequently. The daunting ways of the chairmanto the people will be eliminated. The trust and the confidence of theemployee of Hyundai would be recaptured by the management. Disadvantages This would require great adjustment tothe part of employees also because almost all of the companies in Korea followauthoritarian type of management.2. Hyundai should justgive the employees the increase in wage that they are demanding. Advantages This alternative would terminate theuprising of the employees abruptly. This would create a better image for thecompany immediately. Disadvantages The company is not sure if they cansuffice the financial needs if they would provide the increase in wages. This act will only tolerate theemployees. They will think that with a strike, they can easily get what theywant from the management. 3. Fully detach Hyundaifrom the government influences.Advantages Hyundai will be free in deciding fortheir own. No one will hinder decision of themanagementDisadvantages Hyundai will lose financial support Hyundai will lose much of its projectsDecision statementThebest alternative is alternative 1.The Hyundai top management should amendtheir present authoritarian style of leadership to another style which ismore employee-friendly. In this way, the companywould not require to spendmuch cash but it would change its imageto the employees. Most of the time, the management forgot the needs andcapacity of the people. Now if they will try another style of leadership whichunderstands the ir employees. The employees would feel that they are loved andrespected by their management so theywill love and appreciate the work that they are doing.Part3IMPLEMENTATIONPROGRAM1. Action Plan Long-term Action PlansTochange the management style of Hyundai so as to change its image to the publicand its employees. This way Hyundai will be able to regain its reputation tothe market. Short-Term Action PlansTo stopthe uprising temporarily by the help of the government. The deployment of powerby the government will create an effect that would stop the uprising.2.Proposed Company Operation PlansProduct Planning and Development-Studies show that its muchbetter if Hyundai would focus on a certain venture and develop it.Market PlanningThey established good name in theMiddle East so it is better if they dramatize to another foreign country andestablish a new market there.Financial PlanningSince they experience loss frompast, it is advisable for Hyundai to loan in banks. Production PlanningP roper training should be givento the people in production department to come up with good quality products. Manpower PlanningThe management should discern how toreinforce their employees. One of which is giving incentives and benefits. Organizational PlanningPreviousmanagement would still be the future component of organization.Other Problems and Proposed SolutionOther ProblemSolution The diversified needs and wants of employeesConduct survey or questionnaires regarding the employees wants and complaints about the management.