CASE

STUDY ANALYSIS
Topic: Hyundai’s largest-ever labor strike.

Name: Mikko Giray Montillano

Subject: Management 15
 I. Major Problem

Hyundai Group adopted practice the authoritarian style of management. Without taking into
consideration the fact that during the last two decades of dynamic growth in operations; their
management style hindered the evolution. Due to this, the Hyundai labor union and workers
rebelled against the management's efforts to restructure the organization and the company faced
strikes and worker unrest repeatedly from late 1990s to early 2000s. The labor problems Hyundai
faced were not an isolated case in South Korea. By the late 1990s, the chaebols had grown into
large mismanaged structures with many having several unprofitable units. Yet economists and
labor analysts here say that the current wave of strikes poses crucial challenges for future labor-
management relations, and for Korea's export-based economy. They predict labor strife will
continue.

II. Facts of the Problem (Contributory facts/situations)

1. They are demanding stiff wage increases, often of more than 30 percent, and reduced
working hours. South Korea has one of the world's longest workweeks, at 57 hours. Workers
want large raises so they can afford to refuse overtime. And they are also asking for flat
across-the-board increases rather than percentage rises in an effort to bring up the wages of
the lowest-paid workers.
2. Hyundai’s strategies of low wages and hard work were no longer effective.
3. The reported labor rebellion at Ulsan that were participated by 2000 Hyundai worker since
December 1988.
4. Hyundai started to move away from Korea’s slumping construction and shipbuilding
industries and faced troubled transition to a high-tech, high-waged future.
5. Hyundai workers want better working conditions and environment. They have been looked
down on in Korea. They don’t have voices in management decisions and experienced erratic
job schedules with lower wages.

III. Objectives of the Solving the Case

1. To give business, social, and historical perspectives of the reason and solution behind the
problem experienced by the Hyundai Group three decades ago.
2. To improve the management style and cope with changes along with time
3. To address the dispute between the management of Hyundai and its workers,

IV. Alternative Solutions to the Case

V. Evaluation of Alternatives (Advantages and disadvantages)

1. Management should be reorganized and charged to a more appropriate and efficient

management style.

Pros:
-better relationship with its workers
 Cons:
-the company (their staffs and workers) might have a hard time adjusting to the newly
organized style of management.

2. The company should retain its current style of management but they should also give in to the
demands of its workers for salary increase.

Pros:
-the strike would stop and the company would continue its operations.

Cons:
-entail higher cost
-means higher prices of its products and services

3. The company should retain its current management style and fire all workers who
participated in the strike.

Pros:
- firing of these workers hiring new ones
-could be easily managed.
Cons:
-hassle in hiring new applicants or workers
-costly training

VI. Selection of the Best Alternative

It’s a fact, and unfortunately mismanagement is one of the toughest contributors to correct and
eliminate. It is also causes and contributes to conflict in the workplace. Hyundai management
should first solve the problem between their employees and worker especially during that time
there was a radical change to the relationship between employers and workers due to the uprising
for the democracy around 1986. They should also change their perspective in controlling whole
labor organization of Hyundai by their own manner and style, offering low compensation and
poor working condition. The management should control the company reasonably by taking into
consideration those my comments and insights provided in the fourth and fifth part of this study
case analysis.