Hyundai Case Study Essay

Part IOverview1. Time conditionMr. Muhammad Soeparno was institute by thegovernment of Ind peerlesssia to succeed Mr. Lumenta as President Director of GarudaIndonesia Airways on January 6, 1988. He had to announce his decision in frontof his head quarters employees during the periodic 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 showtime place, the problem was aroused fromthe clean President Director of the federation. And the person who has the abilityand pledge to solve the problem was Mr. Muhammad Soeparno.3. Major Policy biddingGaruda Indonesia Airways was an airline partnership. Itwas the rootage airline attach to in Indonesia and was reported as the biggest inthe Southern Hemisphere. And since it was own by the government of Indonesia,its basic goal is to support the success of the development of airtransportation and tourism of the country.4. Backgroun d of the eccentric personGaruda Indonesia Airways was sufficient to operate in sufficient swing knock against 1, 1950 since the historical time an aircraft bearing theIndonesian flag crossed the skies carrying the name of Indonesian Airway. Itsflight mesh topology addressd to expand encompassing all of Indonesia, Singapore,Bangkok, manila and was able to establish routes reaching Europe and Tokyo. Garuda continued to fix and gradually beganreplacing their propellered aircraft with full jets. In 1960s, Garuda had beenthe save airline operating the domestic routes. However, such monopoly positionhad failed to swear out the attach to to grow because the Indonesian economy had beendeteriorating during that decade. In 1966, the New assemble Government took over Garuda(Soekarno) as it was goingthrough difficult quantify and was unable to contributetowards national development. The result was a sustained period of laid-back harvest-feastin the economy. The oil boom in the ear ly 1970s generated a juicyer 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 experient a nonher exitdownbecause of its unfortunate function and coincidence of al roughly simultaneous delivery ofairbuses and a nightfall to the number of passengers. And these problems wereresolved partly on 1984 (Lumenta).5. Environment compendiumA. SWOT depth psychologyStrengths 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 footrace a chain of resort hotels. Garuda wasconsidered that has much below rates that offered by Asias more than popularairlines like Singapore, Thai International, Japan or mainland China Pacific. Weaknesses Systems in allaspects sales, prepar ation, flight, supervisory The risk ofhaving the magnitude of the debt servicing Inefficiency ofits international operations The confederationsorganization is still unsteady that makes the organizational behaviorincompetent in supporting the company Opportunities Political pull up stakesof the government in tourism The still-abundant-availableseat capacity The economicgrowth of IndonesiaThreats The more change magnitude competition The uncertaineconomic bureau The bureaucracywhich still caused problems in managing company professionalismB. Competitordepth psychologyThe direct opponents of Garuda be 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. market place Planning-it serves for all passengersC. FinancialPlanning- no decided fiscal planning presented D. ProductionPlanning- it acquires newfound equipments and aircrafts by buying E. ManpowerPlanning- right deed of the staffF. organisationalplanning- good capital punishment of strategiesPart IIProblem root1. Background of the ProblemIt was in 1981 that Garuda proclaimed as thebiggest airline in the Southern Hemisphere and has reported a net loss of U.S.$ 46 million for the year ended December 1983 leaving Mr. R.A.J. Lumenta, thenew President of Garuda, debts amounting to U.S. $ 1.3 one million million at 12% interestper annum. Mr. Lumenta adopted a strategic thinking in making plans to turn thecompanys situation around including Garudas lose 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 thecompany s ability to deal with the challenges it whitethorn face during his term andbeyond?3. Statement of ObjectivesThe company, after addressing the root problemshould achieve and acquit the following objectives a. To improveGaruda Indonesias internal control especially in policy of setting a new oversight team of the company. b. To develop thecompanys plans in addressing the attention stability of the company. c. To be moreresponsive to the market demands and to be adeptto adapting those changes. d. To keep forrader ofthe competition intodays age of modern air travel. 4. Areas of ConsiderationThe aras of precondition in solving the probleminclude the history of the companys direction and their rest under eachmanagement, the outside environment of the company and their competitors.5. Alternative Courses of runA. 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. MohammadSoep arno should formulate a new set of policies for the company 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 proven to be legal. Mr. Soeparnowould be tested to flexibility since the policies were not his own. The policieswere already given the company a good response on the uncertainties in and outof the company. Disadvantages The existingpolicies major power not be successful to be carried out by Mr. Soeparno. There might be agap between his under hold uping about the policies and the understanding of theperson who originally hypothesize them.B. cookery ofNew PoliciesAdvantages Mr. Soeparnowould prove that he was worth of the position he was given. Formulation ofnew set of policies agency that there is a chance of gaining more adore fromthe company organization. Disadvantages Th e new set ofpolicies might not be onusive as the old policiesthe company currently has. The company wasnot ready to for new set of policies. C. Declining fromthe PositionAdvantages Mr. Soeparnowould savor 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. close StatementAfter analyzing the option 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 rootages but they areonly disembowel the company into risk again.Part IIIImplementation Program1. Action PlansA. Long-term Action Plansa. Garudasimprovement in implementing its strategy regarding its structure, schema, modality (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 CompanyOperational PlansA. Product Planningand Development- periodically groundwork 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 training system forget be conducted regularly for better outcomesfrom customers and organization F. Organizationalplanning- better implementation of the policies and strategies of the company3. Other Problems and Proposed resolutionsOther ProblemsProposed SolutionsEmployee/Staff-Customer RelationshipGaruda should use up a good training system and have some strength in increasing customer satisfaction. Domestic Airline CompetitionIndonesia concourse still manner at price as a determinant variable. So the dispirit price strategy that has been implemented by its competitor, the new comer verifyworthy could disturb Garuda market. Garuda could loose its loyal customer. So strategy that must be done by Garuda is by improving its fictional character service. Securiry IssueGaruda have to respond to the terrorist attacks by improving procedures and aircraft security 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 abi lity and authority to solve the companyproblem. 3. Major PolicyStatementThe Hyundai group featuredas one of the principal engines of the Korean economic miracle in the past twodecades. The Hyundai group makes awide range of products- ships, bridges,cars, cement, brand 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 obtain the Cortina compact car in 1968. Hyundai focused onmanufacturing quality economy cars and began trade excel to the Unitedstates in 1986. Today 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 drilling platforms,microchips, sneakers, pipes, article of furniture and locomotives. In early 1980s hedecided to make Hyunda i a factor in the electronics industry, focusing at firston production of semiconductors. Later Hyundai become the largest automobilemanufacturer in Korea. For Hyundai to grow as an extension of its founderspersonality it is not surprising that the management style in the organizationhad always been supercilious.IndustryHyundai group covered all kinds of industry. Itis tortuous in ship building, construction of bridges, cars, otherinfrastructure, steel, cements, oil drilling platforms and even manufacturingof microchips and became the largest first step in South Korea. ManagementThe disgorges and activities of Hyundai is headed by its owner Mr. Chung Ju Yung andmanaged by his survive son Mr. Chung Mong Ku. It is also utter 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 outlineStrengths1. Strong Domestic Market2. Good fiber of products3. Cheap labor cos tWeaknesses1. Poor management style2. reservation poor investment decisionOpportunitiesMiddle East warm obtain 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 diversity 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 edge com come outer. 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 co mefrom in the land of Chung Ju Yung. And from the help of the other business 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 Silicon Valley project which was seen tobe a loss even at its proposition. Hyundai tried to jump to the productionsophisticated one-megabit impulsive random access memory chips instead ofpursuing the market for 256K. They are said to be not fully committed to hightechnology. They only see semiconductors vindicatory 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 the call for of the workers on strike and so as to break the series of rising?3. Statement of ObjectivesHyundai Group of companies would like to Ceasethe uprising 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 take to of peace and unity among all nations that wascaused by Hyundais unpeaceful solution to the conflict. 4. Areas of Consideration In Korea, the private sector played 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 intemperately dependent on theinternational e conomy.5. Alternative Courses of Action TheHyundai top management should make better their present authoritarian style of leadershipto another style which is more employee-friendly. Hyundaishould exclusively 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 impart be eliminated. The trust and the confidence of theemployee of Hyundai would be recaptured by the management. Disadvantages This would require nifty adjustment tothe part of employees also because almost all of the companies in Korea followauthoritarian lineament of management.2. Hyundai should justgive the employees the increase in wage that they a re demanding. Advantages This alternative would terminate theuprising of the employees abruptly. This would shit 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 money 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 their employees. The employees would feel that they are loved andrespected by their management so theywill love and notify 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 expand to another foreign country andestablish a new market there.Financial PlanningSin ce they experience loss frompast, it is advisable for Hyundai to loan in banks. Production PlanningProper training should be givento the people in production department to come up with good quality products. Manpower PlanningThe management should know 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 behold or questionnaires regarding the employees wants and complaints about the management.