BUS5910 Unit 6: Business Law and Ethics

Assignment Activity

This assignment assesses your skills/knowledge on:

Employing ethical decision-making as a tool to be used in the management of projects and programs further developing an existing framework;

Applying an ethical framework to a real-world situation.

This assignment will include one new section related to ethics and law and should include all previous sections with feedback implemented that has been completed up until this point. This includes the introduction/background, problem statement, root cause analysis, leadership analysis section, literature review, alternatives/solutions section, high level implementation plan.

The ethics and law section should include:

1. Analysis of your problem utilizing an ethics and law framework.

2. Discuss what challenges or opportunities the organization or leader had from an ethical standpoint, or if the organization has a strong ethical framework, include discussion what makes it a strong ethical corporation.

3. There should be discussion of ethical leadership, risks or liabilities the organization has in terms of laws:

how they mitigate these risks,

what the policies and procedures say, and

what the code of conduct is for the organization.

4. If there is not a code of conduct, make a recommendation as to what one should be.

Be sure to include research references and in-text citations to support your discussion. This discussion should be at least one page.

UNIVERSITY OF THE PEOPLE
WRITTEN ASSIGNMENT: UNIT 3
ABSTRACT
This study will analyze the Hyundai Motor Group. A conglomerate that was established
in Seoul, South Korea, in 1967 and holds the leading position in the Korean local market
and global market, operating in a total of 190 countries worldwide(Kim, 2020). Hyundai’s
quality and innovation are part of the reason for its success, which is naturally achieved
by its business model and employees. Companies such as Hyundai have a human
resource management (HRM) which helps with understanding and motivating their
employees to achieve organizational goals (Senyucel, 2009). They can develop
employee skills, understand their motivation, and maximize their capabilities
to achieve a competitive advantage. The focus is on Hyundai’s leadership, its role and
effectiveness in approaching the problem, and possible remedies from a leadership
perspective.
PROBLEM STATEMENT AND ROOT CAUSE ANALYSIS
Hyundai’s utilization of a root cause analysis is to help identify the origin and causes of
problems or faults that have led to the loss of employees in high turnovers (Han, 2023).
Hyundai Motor Group is experiencing a concerning lack of
employee engagement, among its Frontline staff, which consists of younger and newer
employees(Park, 2017) due to their salary reductions, the lack of career development
opportunities, and the toxic work culture (Staffing Industry Analysis,
n.d). These in turn have a direct effect on employee engagement, quality, and customer
satisfaction. This analysis will help identify the reason behind the problems and the
preventive measures or solutions that can be applied (Duke, 2019).
*What?
The company lost a total of 1136 employees between 2018 and
2020 which accounts for the percentage of employees involved in a voluntary
exodus(Won & Lee, 2022). 51.% of the reason is low salary, 32.2 % due to the lack of a
clear vision from the company, and 41.6 % being to the toxic work culture (Staffing
Industry Analysis, n.d.). The persistence of this problem will lead to a decline in their
quality, sales, and overall customer satisfaction, especially during COVID-19.
*Where? The majority of the lack of engagement and exodus took place across
departments. Especially in the operations, technological, and logistics
departments affecting quality and customer Satisfaction.
*When? The height of the employee turnover took place between 2018-2020 and even
worse during the pandemic.
*How? A percentage of employees voluntarily retired after meeting the required
age and another percentage quit to pursue greener pastures with other organizations.
Their reasons differed but the core motivations were due to salary reductions, the lack
of career development opportunities, and toxic work culture (Staffing Industry Analysis,
n.d.).
*Who? Both internal and external stakeholders are affected by the loss of employees
and lack of engagement. The investors, operations department, and customers
especially.
Hyundai’s HRM attempts to identify and enforce strategies to motivate employees
and train and develop their adaptability. Management uses its policies, brand name, and
procedures to achieve a competitive advantage. They’ve slightly increased salaries in
recent years to retain employees and conduct a lot of work dinners and outings as per
the culture in South Korea to boost morale.
Applying Herzberg’s Two-factor Theory which attributes job satisfaction to motivators
and hygiene factors (Laegaard & Bindelev, 2006), COVID Came with a lot of hygiene
factors that completely changed the workplace and created discomfort within the
employees of Hyundai through them continuously contacting the virus and having to
stay out of work(Wilson, 2020). Management also slacked with recognizing, rewarding,
providing career growth and development, and motivating employees which caused
dissatisfaction and led to the exodus of employees.
To Identify the root cause of high employee turnover at Hyundai, we can use the 5 whys
method which helps identify the possible causes by asking 5 questions using “why” to
get to the root of the issue ( Seiter, 2018). It is as follows:
Why is there a high employee turnover?
• due to the lack of engagement from employees experiencing pay cuts, lack of
career growth and development, and toxic work culture.
Why are there pay cuts?
• Pay cuts are due to the decrease in demand for vehicles and production
disruptions which affected profits, accompanied by the market crash during the
pandemic which contributed to the lack of career growth and progression.
Why is there a lack of career growth and development?
• Employees stay until retirement age limits growth opportunities for younger
employees, and development programs aren’t an integral part of the work
culture. Employees want to evolve outside of their current positions and earn
more which Hyundai fails to project and actively offers and endorses toxic work
practices.
Why is Hyundai’s work culture toxic?
• Hyundai employers have a reputation of being harsh and abusive which was
exposed in recent years(glassdoor, n.d.). The chain of command is triangular
and top-heavy which leaves some employees feeling unseen and
heard. Employees find themselves agreeing and participating in things out of
fear. Their input and ideas aren’t considered.
Why isn’t Hyundai effective in managing employee issues?
·
Companies like Hyundai’s main focus is to make a profit and maintain their public
image. They are known to discourage workers from participating in unions that advocate
for their rights and wellness( Wayland, 2023). They also intimidate and bully their way
out of situations. Employee interest should be an integral part of their culture and
foundation to ensure success.
Hyundai Leadership
Project leaders are responsible for creating a vision for their teams and the steps
necessary to achieve the vision (Malsam, 2023). Hyundai’s success is largely
reflected by its leadership which has influenced its employees’ behavior to align with its
organizational goals. Its executive chair Euisun Chung is presented as the face of its
motivational and growth strategies locally and internally. The leaders of the
company employ a situational approach to address the employee’s lack of engagement
and exodus from the company. Their role is to establish values, create and perpetuate a
work culture, help young employees transfer their learning to the
workplace, build effective communication channels, and manage their public perception
and external relations.
Their belief in addressing these problems by using different leadership styles on a
situational basis (Northouse, 2007) could be viewed as an opportunity for flexibility but
rather highlights their lack of thought to incorporating employee issues into their
strategies and organizational culture. Employee well-being is reduced to an
afterthought, with image and profits being their main focus. The young employees
leaving the company is a clear indication that the role of leadership has been ineffective
thus far even while attracting new employees. According to the literature, leaders who
earn the trust of their employees foster a safe environment for employees and keep
them dedicated to the company (Sonmez & Adiguzel, 2020). To address the problems,
the leaders at Hyundai utilized Maslow’s Hierarchy of needs theory to appeal to
employees by re-implementing and re-emphasizing a time system under the labor law
to allow its employees who are union members to take unpaid time off for union-related
issues ( Kim, 2022), introduced 150 percent in bonuses and incentives in 2021 (Kim &
Jin, 2021), has improved upon its welfare and social contribution activities, reevaluated
its policies and employee retention strategies, and has attempted to cooperate with
labor departments. The success of these actions is visible in the large numbers of new
young applicants joining the company and somewhat increasing retention, but previous
young employees continue to exit, and there is slow sales growth due to weak demand
and economic uncertainties (Yang & Lee, 2024) caused by quality and customer
dissatisfaction, and continuous workplace gossip and discomfort supported by the toxic
work culture highlighting the employee’s lack of recognition and reward that matches
their work and efforts
WHAT COULD HAVE BEEN DONE
Firstly, Applying a transformational leadership approach by inspiring the team with a
sense of purpose and vision would have been effective. Secondly, a democratic
leadership approach would have helped employees contribute to decision-making to
generate suitable solutions for the issues that affect them.
To engage employees, the project leader should have revised their policies and
strategies to include employee wellness. This would have cultivated an
environment that allows for cooperation, unification, and exchange. The leader should
have further made sure that the team understood the shared goal and the mutual
benefit of reaching it. The leader should have used unambiguous communication
channels and, continuously offered them support and resources to keep them engaged
(Khandelwal, 2023), and satisfied to heighten the quality of their output and ultimately
satisfy customers.
RECOMMEND STEPS:
1. Get to know employees by showing interest in their well-being, backgrounds,
and personal goals.
2. Recognize them and their hard work by acknowledging when they complete
tasks well and create incentives, bonuses, and increases to further motivate
them.
3. Listen to them and remedy situations using their feedback by having regular
meetings using clear communication channels.
4. Encourage them to value quality and care about the customer by engaging
them in their core areas of job satisfaction
5. Drive and encourage personal development by opening up opportunities where
they can improve their skills and apply them to better themselves and achieve
their career or personal goals
CONCLUSION
As a company, leadership has always played a significant role in Hyundai’s success.
They need to restructure and improve upon existing policies and strategies. Their issues
and current state of affairs can be improved through a transformational or democratic
leadership approach that creates an effective framework to manage employee
challenges before they even emerge. Good leadership engages employees, affects
their quality of work, and contributes to customer satisfaction, thus leading to
organizational success as demonstrated above.
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Seiter, C. (2018, September 10). What is a 5 whys? a step-by-step guide to running
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