Some of the reasons why Hyundai relocated to Alabama State of the U.S.A. include the failure that she suffered in Korea. With the influx of cheap imported cars and the violent nature of the labor unions in Korea, the company had started to suffer serious decline in profits; this necessitated the move to look for other alternatives of operation. This landed the company in the U.S. As the revolution of the manufacturing companies and industries in the country (Carmel & Tjia, 2005). This is the place that provided the utmost and best labor regulations for the company. Another significant factor is the state government's incentive package. The incentive was very attractive to Hyundai as they could abate tax if they relocated there. This was a massive boost to the process of adaptation and profit realization. Moreover, the company was offered a site for setting their operations and a good access to the road and bridge. This was a significant incentive as it provided the perfect setting and placing for the company. Additionally, the state also promised the company to give education and training required by the job applicants in the firm. This meant that the company could save as much as $253 million; cutting costs incurred in relocating by such prodigious amounts would position the company in the superlative place to see a tremendous achievement within the near future for the company. Another incentive offered to the company is that of support in building the firm. The factor in the incentive that ensured that the company managed well in the state is the offer to create and nature a friendship between the Korean and American culture.
In off shoring, the biggest challenge is always managing the intercultural differences. The globalization of the worlds sectors has had its impact on the cross-cultural management. Like many other sectors where globalization has taken the toll, the communication sector is not an exception (Oshri, 2011). When a company relocates; and all the other factors are intact, the progression of the company is swift. However, complications arise when there is evident growth of the company. The company grows in production requirements, and consequently, the number of employees has to be increased. They rise through from a few hundred employees to thousands and hence the access to employees who have a base experience to the company's original culture. The employees begin to express emotional tiredness and frictions begin to rise. Communication failures take effect and mixed tensions and matrix of relationships crop within the organization or firm. These are some of the challenges associated with the off shoring of a company to a region that has an utterly dissimilar culture as to that of the home place. The whole new hiring always presents a new structure that is not similar to the domestic management structure. This challenge can worsen to the extent of having retrenching exercise to vent off the workers who do not have the experience. However, this is a quick fix to the predicament as it is obviously evident that the company needs these workers (Oshri, 2011). The managerial practices are influenced by the cultural beliefs of the people. For instance, in Korea, respect and obedience for superior person is supposed to be unquestionable. This is dangerous as it eliminates chances of sourcing quality information from co-workers. For instance, in the 1990's, due to the difference in rank gaps, several planes crashed. This is because the subordinates would not utter words that contrast the superiors' opinion. This unwavering obedience cannot be said the same of the American people. The American decision making practice begins from the bottom to the top rank.
In the case of Hyundai motors, all the other factors in America were conducive for the success. The labor, market, policies and technology acquisition among others were all in place for the company to pick easily. The worry came with the factor of the cultural differences between the two societies. Before relocating to the U.S., Hyundai had been in Canada and, therefore, was not strange to establishing effective managerial and communication practices (Oshri, 2011). The factors that facilitated the easy manner in which the company overcame these cultural management issues that would arise include; the support that she got from the, local state, government. Education is imperative for survival in this ever changing world. Therefore, when the Alabama state offered to provide basic work training for the applicants of the job in the company's firm, this was a significant boost. The people could adapt to the traditional approach of management from the Korean managers easily.
Secondly, the intercultural differences between the American and the Korean people are diverse. Therefore, there needed to be stern action plan to deal with the communication, and culture acceptance between the two groups of people...
Plant relocation *** CONFIDENTIAL *** We have discussed previously the issue of relocating one of our plants. I have received back from the consultant a report that outlines what she thinks are our best options. This report will present her findings. Fact Summary: The consultant identified Mexico, the Philippines and South Africa as potential sites. Her findings are summarized in the following table Mexico Philippines South Africa Wages $3/day $1/day $10/day Living wage? Maybe Union strength Minor Moderately strong Scandal risk High Low Moderate Environment Regs Some Few Some Environment Cost Low Low Moderate Env. Scandal risk High Low Low This
Ethical Dilemma and Corporate Responsibility Board of Directors RE: Response to Ethical dilemma created by the relocation program I am writing this memo to inform the directors that this company is faced by an ethical dilemma. The ethical dilemma presented in this report is based on challenges of balancing corporate loyalty and corporate responsibility. This report advises the Project Management office (PMO) on the possibility of applying Workers Adjustment and Retaining Notification (WARN)
Ethics and Plant Closure Situation Analysis -- ABC/DVD Manufacturing, Inc. must decide whether to close its plant in Anytown, MA. The plant closure would result in the lay-off of 50 employees. Management has asked for a brief outlining the ethical issues surrounding plant closures, and the questions apparent on profit vs. ethical behavior. At the heart of the decision are several questions that must be considered prior to a decision. Each question
The likes of service oriented companies like America Online (AOL) is a prime example of how relocation and outsourcing has changed the way service oriented businesses function in this global economy. AOL continues to be one of our nation's most intelligent economic organizations as they take advantage of the outsourcing for the majority of their customer oriented operations. When an AOL customer calls in to have his password reset
The government has rather low environmental expectations. In fact, the consultant found that they are about as lenient as the Mexican restrictions, though the Philippines presents no public relations nightmare as protestors are not rallying against health concerns, as they were in Mexico. Although the conditions in the Philippines may seem even more ready for outsourcing then the conditions in Mexico, the ethical costs of operating the company in the
That particular ethical concern may be harder to define precisely, simply because it may be too restrictive and no different from the types of decisions considered appropriate in the U.S. In that regard, provided it violates no domestic or foreign laws and that it is not undertaken for the purpose of shifting the environmental risk (Rosenstand, 2008), the relocation is no different from situating a similar plant in any local
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