emba management project daewoo intl

MANAGEMENT

PRACTICES AT

DAEWOO

INTERNATIONAL

CORPORATION

A report compiled by:

1. AZEEM BARI

2. HAMZA IQBAL

3. MUBEEN AHMAD

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ACKNOWLEDGEMENTS

We wish to place on record our indebtedness to the following people for the continuous support we received during the process

of compilation of this report. In particular to ________, our teacher, for his unrelenting interest, keeping constant contacts and

help that he gave during the process. We are also thankful to Daewoo people for providing material relating to this report

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ABSTRACT

This is the summary of your entire project. More like a summary of your findings.

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Table of Contents

INTRODUCTION TO COMPANY................................................................................................5

Business Sectors...........................................................................................................................5

Organizations structure and Design at Daewoo Intl....................................................................7

Hierarchy within a Division.........................................................................................................9

Hierarchy for Branch Offices.......................................................................................................9

Hierarchy for Liaison Offices....................................................................................................10

Role of Ethics in company’s decision making...........................................................................10

Role of globalization in shaping company’s strategies..............................................................11

The multifaceted nature of globalization................................................................................11

PLANNING AT DAEWOO INTL................................................................................................13

Decision making at Daewoo Intl................................................................................................13

Individual decision making mechanism.................................................................................14

Group decision making mechanism at Daewoo Intl..............................................................14

Strategic management at Daewoo Intl.......................................................................................14

LEADING AT Daewoo Intl..........................................................................................................15

Role of leadership in Daewoo Intl.............................................................................................15

Role of motivation in Daewoo Intl............................................................................................15

CONTROLLING AT Daewoo Intl................................................................................................16

Operational controls at Daewoo Intl..........................................................................................16

LIST OF FIGURES.......................................................................................................................17

REFERENCES..............................................................................................................................18

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INTRODUCTION TO COMPANY

Daewoo International Corporation is Korea’s largest trading company and a subsidiary of

POSCO. The company was founded by Kim Woo-Choong in 1967 as Daewoo Industrial Co.,

Ltd, which ran its business in trading and construction. In 2000, as Daewoo Group faced work-

out program, Daewoo Industrial Co., Ltd.’s trading segment was split and established as Daewoo

International Corporation. Afterwards, it succeeded general trading license and was listed on

stock market back again. Currently the CEO of Daewoo Intl. is Dong Hee-Lee, and he is also

appointed as the Chairman of Board of Directors. Daewoo International corporation has five

business segments, providing services in international trading, resource development in foreign

countries, domestic and international investments in business, foreign projects, support of small

and medium sized companies with items such as steel, metal, chemical materials and automobile

parts, machinery, plants, electronics, textiles, special materials.

Daewoo International Corporation emerged as a company dedicated to international trading and

investment when the international trading and construction sector of Daewoo Corporation was

spun off into three companies:

Daewoo International Corporation;

Daewoo Engineering & Construction Company Limited;

Daewoo Corporation.

Since the completion of workout on Dec.27, 2003, Daewoo International Corporation has been

growing and finally became one of the POSCO Family Members in October, 2010. Through this

chance, Daewoo International Corporation will fulfill the vision of becoming a "World Top

Class Trader, Investor and Developer".

Daewoo International Corporation has its Head office in Seoul. Its global network consists of

over 100 overseas branches and subsidiaries.

Business Sectors

Business Group I

Hot Rolled Steel Division, Flat & Wire Rod Division, Automotive Steel Division, Cold Rolled

Steel Division, Special Steel Division, Energy Steel Division

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Business Group II

Machinery & Plant Division, Power Energy Infra Division, Automotive Component Division,

Electronic Industry Division

Business Group III

Steel Raw Materials Division, Metal Division, Non-Ferrous Metal Division, Commodity &

Textile Division

Business Group IV

Chemical Division I, Chemical Division II, Chemical Division III

Resource Development Group

E&P Division, Mineral Resources (Commodity & Agro-Resources) Division

Domestic Business

Busan Factory, Daewoo Department Store

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Organizations structure and Design at Daewoo Intl.

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CEO

& C

hairm

an o

f BO

D

Corporate Audit Department

Legal Department

Corporate Management Innovation Department

Corporate Planning Division

Finance & Accounting Division

Busan Factory

Daewoo Department Store

Business Group-I

Hot Rolled Steel Div

Plate & Wire Rod Division

Energy Steel DIv

Cold Rolled Steel Div

Special Steel Div

Business Group-II

Machinery & Plant Div

Power Energy Infra Div

Automotive Component Div

Industrial Electronics Div

Business Group-III

Steel Raw Materials Div

Non-ferrous Metal Div

Commodity & Textile Div

Business Group-IV

Chemical Div I

Chemical Div II

Chemical Div III

Resource Development Group

E&P Div

Mineral Resources Div

Agro-Resources Div

Daewoo is a Global organization and is designed on the basis of a mix of task and cognitive

differentiation as it can be easily observed in the above given chart that groups are formalized on

the basis of their tasks but in each group people are assigned designations on the basis of their

cognitive and intellectual capabilities. Other than this Business groups are not interdependent but

in each group there are teams that are interdependent on each other and pooled, then

interdependent through the set of rules, policies and guidelines as Daewoo Intl. sets a static path

for all of its teams but that path might vary for the business groups on minor scale, yet even then

there’s a similar game plan for every group and team working under Daewoo Intl.

In order to capture the market globally Daewoo Intl. has opened Branch Offices and Liaison

Offices in every country. The difference between a branch office and a liaison office can be seen

in the given below charts. Daewoo Intl. exists globally but even then the organizational design is

formalized by the unity of command and line of authority, as every line links the office to the

Head Office in Korea and in every office the leading person is appointed from Head Office

Korea.

Daewoo Intl.

This type of chain of command and line of authority depicts that the organizational design is very

centralized and it structure is differentiated on the basis of Product/ Division and the Geographic

aspects. But if we observe the Branch Offices & Liaison Offices, their structure is only

developed on the basis of functional differentiation.

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Hierarchy within a Division

Hierarchy for Branch Offices

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Senior Manager Hot Rolled Steel Div

Manager (America Region)

Assistant Manger (North America)

Assistant Manager (South America)

Manager (Europe Region)

Assistant Manager (Europe Region)

Assistant Manager (Russian Zone)

Manager (Asia Region)

Assistant Manager (Central Asia)

Assistant Manager (Southeast Asia)

Branch Office

Head OfficeAssistant Manager

Hot Rolled Steel Div (North America)

Branch Manager Hot Rolled Steel Div

(North America)

Business Development Team

Finance TeamHuman Resource

TeamProject

Development Team

IT Team

Hierarchy for Liaison Offices

Role of Ethics in company’s decision making

The Company and employees and officers of the Company must understand and comply with the

ethics regulations. The regulations are applicable to all officers, employees and local contractors

who work at the main office of the Company, domestic divisions, overseas branch companies,

and investment corporations, and other third parties dealing with the Company must be actively

encouraged to understand and comply with the details of the ethics regulations. Respect the

right-to-know of all of its customers including local and international suppliers and trading

partners and shall make readily and accurately available through various media channels

including the Internet any information that its customers need to know, or should otherwise

know, except for information that the Company regards as confidential for business needs such

as trade secrets.

Let its customers know in good faith anything that they need to know for their benefits and

safety.

Let its customers know the purpose and background of the Code of Conduct and join forces with

them to ensure clear and visible trade practices and fair transactions.

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Manager (Asia Region)

Assistant Manager (Central Asia)

Country Head Pakistan

Business Development Team

Project Development Team

Refuse to do business with companies that have committed unlawful acts, including, but not

limited to, tax evasion, accounting fraud, and environmental pollution.

Any promise made to customers will be fully honored.

Unless otherwise stipulated in the relevant law or agreement, information regarding any of its

customers under its custody or control will be kept as strictly confidential and only be used for

business purposes with regard to that customer, including, but not limited to, transactions with

him/her.

Customers’ property received or acquired in the course of business, including their assets,

copyrights and trade secrets, will be protected by measures as powerful as those applied to its

own property.

The Company shall not engage in unfair business practices including but not limited to insider

trading. This is in order to ensure fairness and soundness for the stock market and avoid loss of

trust from shareholders and investors.

If we overview the situation of Daewoo Intl., we can link both, the consequentialists and

deontological perspective of ethics, as in deontological perspective the intentions and the end

results both matter and other than this Daewoo Intl. strictly follows its policies and assigns a

certain act immoral if a little amount of illegal action or even immoral or unethical action is

involved in the principal action.

Role of globalization in shaping company’s strategies

From a business perspective, globalization has two prime characteristics: first, it involves

growing interdependency between countries and, second, it is multi-faceted with many different

business aspects. In spite of its growth, globalization is only one of many aspects in the

development of international and global business strategy. For many organizations attempting to

develop an international or global strategy, globalization is not the prime strategic focus.

The multifaceted nature of globalization

Globalization has many different facets, including such areas as political, economic,

sociological, technology, culture, finance and production. But if we take each of these areas, it

will be clear that there are still major differences between countries and their people:

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Political: Daewoo Intl. keeps in mind the political scenario prevailing in any country before

penetrating into its market. In order to study the political scenario Daewoo Intl. appoints a team

in that country and they generate a report based upon the

Economic: the country data above illustrates the significant differences here.

Sociological: the World Bank Annual Reports provide data that shows vast differences in family

size, education, health and other matters between countries. There is little evidence that

globalization has become a driving force here.

Technology: it is argued elsewhere in this website that changes in technology have been one of

the driving forces for globalization – Google, Facebook, etc. But there are still major differences

between countries around the world – hardly suggesting that what happens in one country will

have a strong influence on what happens in other countries. Moreover, the wider spread of

technology is arguably ab international rather than a global activity: for example, Facebook

spread from the USA to other countries internationally but many of its networks remain within

one nation.

Culture: the substantial differences in national cultures have been well-documented by many

researchers, e.g. Hofstede. However, from a business strategy perspective, it is the organizational

culture of an individual company, not the national culture of a country that is particularly

important in developing business strategy. Globalization plays a secondary, or even tertiary, role

in such matters.

Finance: there can be no doubt that international financial issues can have a major impact on the

outcome of an organization’s international and global activities. This is not just about currency

fluctuations causing sales and profits to rise and fall. Some companies centralize international

cash flow activities on a daily basis to maximize their profits.

Some companies have sought to address this by restructuring their business to achieve

economies of scale and reduce duplication of effort at the local market level. They must balance

the desire for standardization and the need to remain relevant to end-customers.

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PLANNING AT DAEWOO INTL.

Its predecessor was created in 1967 to sell nylon to Southeast Asia, but Daewoo International has

stretched beyond that business to become one of South Korea's leading international trading

companies. Trading primarily in steel, metals, chemicals, and textiles, Daewoo International was

formed in 2000 when Daewoo Corporation, once the flagship of the defunct Daewoo Group, split

into three companies. Its steel divisions trade cold- and hot-rolled steel coil and sheet, galvanized

steel coil and sheet, and silicon steel, products made primarily by Korean steel titan POSCO. In

2010, POSCO acquired Daewoo International for $3 billion, in a move to boost its raw material

base and its international sales.

Planning at Daewoo Intl. is done at very upper level of management with the consent of Board of

Directors and for this purpose an annual general meeting is held. In this meeting reports are

reviewed in order to plan for the new strategies. This plan is comprising all the aspects of target

market & customer, the feasibilities that can created to improvise the international trade, long

term involvement of the company in international projects and the investment done globally. In

this plan geographical penetration strategies are also formulated by discussing the various

aspects at micro and macro levels of respective markets. Other than this it is also discussed that

Long Term => Projects

Short Term => Geographical

Acquisition & Mergers

Global Operations

Decision making at Daewoo Intl.

Centralized Decision Making

Global Strategy in Decision Making

Country Heads Involvement

Involvement of Employees

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Individual decision making mechanism

Group decision making mechanism at Daewoo Intl.

Strategic management at Daewoo Intl.

Vision

To develop all members as global professionals

Raise stable long term revenue up to 50% or more

Lead Cooperation with POSCO Group

Mission

Strategic Decisions

Managing Innovation

Managing Sourcing

SMART Goals

Evaluation

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LEADING AT Daewoo Intl.

Negative & Positive Values Existence

Path Goal

Transformational

Task Oriented Behavior

Role of leadership in Daewoo Intl.

Training

Learning

Development

Growth

Role of motivation in Daewoo Intl.

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CONTROLLING AT Daewoo Intl.

Operational controls at Daewoo Intl.

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LIST OF FIGURES

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REFERENCES

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emba management project daewoo intl

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