Essay Title: The Behaviours, Actions and Communications review on Hyundai Motor

Introduction

Hyundai Motor Company (HMC) established in 1967, is the worlds fourth largest South
Korean multi-national automaker globally, as part of the Hyundai Kia Automotive Group
subsidiary as of 2009. With an operating headquarter in Seoul, South Korea, HMC has 1.6
million annual production capacity within its large integrated manufacturing facility in Ulsan.

About 75,000 employees in its eight worldwide manufacturing plants, 12 R&D centres and
vehicles sold in 193 countries through dealerships and showrooms. In 1984, although the
Pony was not marketed in the United States, due to failure to pass the carbon emission
standards, sales exceeded expectations in the Canadian market. In 1991, the company
successfully developed its own engine transmissions, the four-cylinder chassis Alpha and
achieved technological independence.

Corporate Social Responsibility

Part of HMCs Corporate Social Responsibility (CSR) is to sustain itself as a responsible

business, in the form of priding itself as a leading world-class automaker company of eco-
friendly vehicles. It started developing its range of hybrid electric and fuel-celled electric
vehicles including the Blue Drive initiatives emphasising on fuel efficiency, electronically
operated and substitutes to fuelled vehicles solutions.

HMC invested large amount of resources on implementing its technologically energy

improved vehicles. The Blue Drive campaign aims on developing fuel efficient powered-
vehicles internal combustion engines that runs on bio-fuels, hybrid and fuel-celled electricity
to achieve for zero emissions of low carbon.

Case against Hyundai Motor Company

In 2006, The New York Times published an article which dented the image of HMCs
reputation. Chairman, Chung Mong-koo, breached professional ethics for the misappropriation
of its shareholders funds and was also charged for bribery acts related to the facilitation of
urban expansions in Seoul (Fackler, Martin. Choe, Sang-Hun. May 17, 2006). Chung later
donated $1 billion in shares to charity to remedy the scandals.

Worsened by the 2008-2009 financial crisis, HMC faced decreasing sales volumes because of
increased automotive fuel prices which results to its consumers to prefer more fuel efficient
automotive models.

When it realised the desperate need to gain back its market sales, HMC dedicate to establish
the Hyundai Motor Global CSR Network social contributions and executed infrastructures,
consisting of its global network subsidiaries to promote CSR foundations and activities
(Lhlwan, Moon 2008).

While HMCs efforts to improve its name through CSR improvement programmes, global
media reports that its unionised South Korean plant are threatening to go on potential strikes
about a recent revamping of wages scheme. The annual wage negotiations has issued for
demands in the inclusion of bonuses and other compensations as its workers base pay (Jin-
hai, Park 2014).

Relating to the 2011 Montana crash, the jurisdiction filed a lawsuit against HMC for the deaths
of two teenagers (Scurria, Andrew 2014). HMC shortly recalls 1.3 million of its vehicles
including the top-selling, Sonata sedan models in the US, due to auto parts transmission
failure issues.

Prior to the recall of its sedans, Epoch Times (Epoch Times. March 17, 2014) reported that
HMC was also involved in an overstatement of inaccurate fuel mileage of its sports utility
vehicles to the US media. The governments transport and industry authorities promptly filed
HMC to compensate $1 million of the misled consumers through legal means (The Financial
Express. Jun 26, 2014).

Case for Hyundai Motor Group

In 2012, the U.S. Environmental Protection Agency named HMC as the most fuel-efficient and
least CO2 emitting brand for its abilities to manage environmental issues. The innovative and
strategically designed Blue Drive approaches, successfully promoted the sustainability of
environmental preservations (Hyundai 2012). To meet the needs of consumers and fulfilling
stakeholders expectations, HMC invested $12.2 billion of R&D related activities and facilities
to legislate for the developments of its proprietary fuel-efficient hybrid vehicles and for
improvements of its engine emissions (Beene, Ryan 2011).

HMC undertook South Koreans economic instability by exhibiting CSR movements to target
on social unemployment issues. A joint-cooperation effort under the South Koreas Hyundai-
Kia Automotive Group, extended financial assistance by granting vehicles to low-income
earners and self-employed small-business owners. Additional necessary financial aids were
also offered such as practical assistance for educational trainings and consultation programs
(Tae-jong, Kim 2012).

HMC also made efforts to a voluntary recall of its SUVs, allegedly notifying its global network
of auto dealers of brakes issues. But NHTSA indicated that the recall was delayed. HMC then
acknowledged this by rectifying its safety procedures, coordinating with a U.S.-based
technical group to assess safety issues. The fiasco had HMC to disburse reparations to
owners of the SUVs (Cole, Craig. 2014).

Conclusion

HMC profiles itself as a premium automaker brand and popularised the eco-friendly
technologies that prioritises customers needs. And introducing a culture that are both
environmentally and socially considerate. HMCs vehicle emission complies with the standards
set by the industry of the various countries it operates in, meeting the demands of its
consumers for fuel-efficient cars.
In compliance to the international law and labour practises guidelines, actively unionised
charters were formed in respect to the work rights ethics which achieves to provide fair
compensations accordingly for all of its employees.

Large export-oriented corporations and organisations relied heavily on monetary donations as

solutions to CSR controversies. This was proven when HMC made attempts to clean its
tarnished reputation kindled by the organisations scandals for bribery charges with the
governments officials and embellishments of statements (The Economist, 2007).

In pursuit of HMCs CSR contributions of philanthropic charity assistance is to re-represent

itself through social justification motives, caused by detrimental effects of business for profits
only mentality of its stakeholders.

HMC launched massive CSR campaigns such as Moving the World Together and Hope on
Wheels, working with several Englands automotive dealers for a cause to fight against
pediatric cancer. In support for an initiative known as the Jimmy Fund program with a non-
profit organisation, The Dana-Farber Cancer Institute. The program hoped to find a cure for
children with cancer. Every time a new Hyundai vehicle is sold in the U.S., Hyundai
customers join Hyundai and its dealers in our cause. By the end of our 16th year, we will have
donated more than $86 million to pediatric cancer research in the United States, quoted on
HMCs website (Hyundai Hope on Wheels, 1998.). According to John Krafcik, President and
CEO of Hyundai Motor America, such dedicated cause aims to redefine its American market
and diversification of products line-up (Kanani, Rahim. 2013). Its concept is to unite both its
internal and external stakeholders while bringing awareness on the importance of community
involvements and societal issues. HMC considers such non-profit socially-conscious efforts as
part of its role to deliver the expectations that the society and its stakeholders has towards its
organisation.

Director of Corporate Social Responsibility Inclusion of Hyundai Motor America, Zafar Brooks
disclosed statement during an interview, Its a joint effortwe give plus we match
contributions from dealers. By the end of 2013, Hyundai will have awarded $72 million in
research grants since 1998 (Straczynski, Stacy. N.d.).

Voluntary commitments towards improving social issues can bring positive benefits to an
organisations stakeholders. There are significant opportunities for organisations to live-up its
corporate values. When businesses invest in community and philanthropic efforts, often its
own stakeholders are the ones benefiting from those actions. An organisation which is in a
business to generate profits should provide feel good beneficial returns to the society.
Though it may be challenges of a balancing act, the advantages can often outweigh the costs
when corporate social responsibility is realised. Whilst profit may be the goal for any
businesses, only the more responsible corporations have managed to attract investors by
reducing its risks and addressing its stakeholders concerns. While there are numerous news
in the media these days where a particular business has made humiliating errors of
judgement, more interests are being directed at businesses which demonstrates Corporate
Social Responsibility.

Many CSR efforts are offered through public relations and media opportunities by spreading
its organisational messages. Typically, a series of follow-up stories showing how an impact
has been made through donations amplifies in the media. Charitable events organised by
corporate sponsorships captivates its target audiences subtly compared to traditional sales
efforts. Other examples of socially responsible initiatives are; unionised and non-profit
organisations supporting its fellow union members made goods out of fair trade causes and
green movement initiatives that encourages the purchase of recycled and biodegradable
products.

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