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Business Failure Daewoo Essay

985 words - 4 pages

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Running head: BUSINESS FAILURE-DAEWOOBusiness Failure-DaewooUniversity of Phoenix-OnlineBusiness Failure-DaewooAlthough Daewoo means great universe in the Korean language, Daewoo Group, only lasted 32 years. The company did achieve some success, but it has been largely deemed a failure. Daewoo Group was a major South Korean conglomerate or chaebol, and was incorporated in March, 1967 by Kim Woo-Jung. The company was dismantled by the Korean government in 1999.As a leader Kim Woo-Jung was well educated, possessing a degree in Economics from Yonsei University in Seoul. He was the son of the Provincial Governor of Daegu. Daewoo became one of the Big Four conglomerates in South Korea, in industrial and multi-faceted service. The prominence of Daewoo was in expanding its global market through joint ventures worldwide. Kim Woo-Jung was an entrepreneur. He started Daewoo Group with $18,000 in initial capital, and grew the company to $25 billion in annual sales. Government policy in Korea was how Kim Woo-Jung got his capital. It provided him with huge subsidies, unlimited cheap credit, and protection against foreign competition. In return for this, loyalty to the government was required, and the government was involved with his business. The government forced Daewoo into the shipbuilding business.There were about 20 divisions under the Daewoo Group. Among those were Daewoo Motor, Daewoo Motor Sales, Daewoo Electronics, Daewoo precision Industries, Daewoo Textile CO, Ltd, Daewoo Heavy Industries (DHI), Daewoo shipbuilding & Marine engineering, Daewoo Securities, Daewoo Telecom Ltd, Daewoo Corporation, Daewoo International, Daewoo Development Co. Ltd, IAE or Institute for Advanced Engineering, and Daewoo Development Company. Some of these companies have survived as independent companies.In order to expand and achieve success in business expansion, Kim Woo-Jung had a company vision. His vision consisted of using organizational politics to work with the Korean government. In order to receive the resources he required for business growth, he knew he needed the government. Daewoo Group had the ability to turn around faltering companies by the creation of a centralized company structure which was managed well. Through diversifying methods of securing funds, to include leasing and deferred payments, Daewoo enlarged its capital supply sources. Funding for large foreign investments was also done successfully. Daewoo also established joint ventures with U.S. and European companies. The goal was to strengthen international competitiveness.Two workers committed suicide in 1987, after which Kim Woo-Jung developed a program to reconcile management-labor relations. In this program, managers and company presidents were required to work on the assembly line, and assembly workers could be promoted to managers. The purpose of this program was to help managers understand the problems and difficulties of working on the...

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