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

1. The company should retain its current style of management but they should also give in
to the demands of its workers for salary increase.
2. The company should retain its current management style and fire all workers who
participated in the strike.
3. Management should be reorganized and charged to a more appropriate and efficient
management style.