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Daewoo Corporation Essay

962 words - 4 pages

Daewoo Corporation was the result of the efforts of Kim Woo Choong who led the effort to assemble a conglomerate consisting of 275 subsidiaries located in many parts of the world (The Economist, 1999). The efforts by Kim were encouraged and assisted by his influence with the South Korean government. The agenda of the government originated from efforts to provide sources of economic growth, employment and prosperity for the country of South Korea (The Economist, 1999). The financial pressures which developed from the aggressive growth of Daewoo resulted not only in an excessive amount of debt but also fostered an inability to monitor and control that debt (The Economist, 1999). The failure of leadership and management influence within this organizational structure might have predicted the fall of this short-lived but mighty corporate empire.Because of its immense size, an attempt to identify the basic organizational structure of Daewoo is argumentative. Mintzberg (2003) includes a number of identifiable structures which may be easily ignored since they simply do not relate to the structure of Daewoo. The structure was more identifiable as unrelated diversification simply because of the sheer size and configuration of 275 separate divisions located worldwide and involved in numerous different endeavors. The rapid expansion of Daewoo from a small, entrepreneurial company into a multinational conglomerate which continued to be directed by the visionary Kim gives rise to a potential lack of accountability in all areas (The Economist, 1999). Very likely vast resources existed within the company to address these concerns. Despite these efforts, the company grew beyond its ability to maintain proper control of its increasing debt (The Economist, 1999). Leadership of the company continued the rapid expansion which outstripped the confidence of Daewoo's creditors (The Economist, 1999).Daewoo's chaotic structure devolved into an immense, out of control, mismanaged company (The Economist, 1999). The leadership became so embroiled in continued expansion without imposition of proper controls and accountability that the entire structure became a nightmare of gigantic proportions which was eventually dealt with on the governmental level (The Economist, 1999). The financial adventures of the leaders were quixotic in their quest for empire building. This effort may simply have been desperate attempts to avoid the inevitable financial collapse looming as a result of the lack of internal control. The organizational structure became a nightmare of gigantic proportions (The Economist, 1999). Daewoo leadership presented a toxic combination of unregulated availability of credit, political influence and gross managerial ineptitude.Included in the leadership mindset was an attitude that the company was simply too big to be allowed to fail (The Economist, 1999). This attitude of invincibility was not unique to Daewoo. The South Korean government felt similarly about Daewoo...

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