Hyundai Motor Company is a stone thrown into the pond of ‘corporate bureaucracy’”/>
The selection of Spanish-born Jose Muñoz as the next CEO of Hyundai Motor Company cannot be explained in isolation from the launch of the Donald Trump administration in the United States. The same goes for Advisor Seong Kim, a former U.S. ambassador to Korea who heads the group’s think tank. Neither of them have a deep relationship with Hyundai Motors. President Muñoz joined in 2019, and Advisor Kim joined last year. Hyundai Motor Group Chairman Chung Eui-sun recruited Muñoz based solely on his sales skills. Before joining Hyundai Motors, he was in charge of marketing at Nissan’s European and North American corporations for 15 years, and was highly trusted by Carlos Ghosn, who once reigned as a tycoon in the global automobile industry. He was an enemy general who fought with Hyundai Motor Company, shedding blood.
The expectations were not misplaced. Over the past five years, Hyundai Motor Company’s overseas market share and profitability have risen sharply. Foreign CEOs in the four major conglomerates are like aliens. The reality is that even Coupang founder Kim Beom-seok refuses the status of ‘Korean CEO’. Korea’s corporate-related laws and systems, which are full of excesses, are largely out of sync with global standards. This can be burdensome for Munoz, who has unlimited responsibility for management. Internal communication is also a problem. Since it would not be possible to have an interpreter at every meeting chaired by the CEO, Hyundai Motors will automatically adopt English as a common language.
The Muñoz regime is expected to bring significant changes to corporate organization and culture, whether intended or not. He doesn’t have Hyundai’s blood flowing through him. I didn’t grow up to be anyone’s confidant. He owes no debt to anyone other than Chairman Chung, who recognized him. Hyundai Motor Company President Jang Jae-hoon, who was promoted to vice chairman next year and will oversee the entire automobile business, is not much different. Unexpectedly, he is a Samsung recruiter. After working at Samsung C&T and gaining experience at global companies such as Nissan, General Electric (GE), and Nomura Securities, he has been working at Hyundai Motor Group since 2011. He was in charge of the entire value chain, from product planning to manufacturing, and successfully resolved the supply chain crisis during the pandemic. Recently, the company successfully listed Hyundai Motor Company’s Indian subsidiary in the local market, setting a precedent for raising overseas capital, which is rare among domestic companies.
Hyundai Motor Company’s personnel innovation is providing a refreshing shock to the corporate bureaucracy that has fallen into the trap of complacency and ‘cherry pickers’. Nationality, regional background, school ties, connections, and close associates were all excluded. Actually, it doesn’t feel like it’s too late. The manufacturing-centered conglomerate system faces a serious threat. It is not a matter of governance, ESG (environment, society, governance), or soft competitiveness. The root of the crisis is the weakening dominance of product and factor markets. Although it was a ‘future predicted’ for a long time, we were not properly prepared to respond. The waves of Chinese companies, backed by the unlimited subsidy policy, have traveled overseas and are now hitting our walls. The proclamation of Ali and Temu is synonymous with the advance of Chinese products. It cannot be seen that China will stop exporting at low prices one day. The current selling price is definitely the highest price. It is clear that it will be cheaper tomorrow than today and the day after tomorrow. It has become difficult to find young and abundant labor in the labor market. This is a much more serious problem than the rise of labor unions and pro-labor legal regulations. Fortunately, young workers change jobs frequently and do not have the concept of a lifelong job. Attracting high-quality brains from overseas is blocked like a huge barrier by big tech companies that are sweeping away talent from around the world.
Corporate bureaucratization is inevitable to some extent. For organizational management and cohesion, the loyalty and loyalty of key staff members is also necessary. But following precedent no longer works. The so-called ‘Tio’ organization chart is no longer useful. The opponents have changed and the market has changed rapidly. Korean companies can never win the money fight with China. The same goes for cutting-edge competition with big tech, where the difference in investment size is more than 100 to 1. The only thing to believe in is innovation based on core talent. We need to change not only products and systems, but also people, thoughts, and consciousness.
Futurist Choi Yun-sik said that all innovations are accompanied by ‘suspicion’ and ‘surprise.’ In the beginning, the response is, “Will that work?”, but once the doubts are lifted, innovation becomes established as the organization’s dominant system. Chairman Chung threw a large stone into the pond of corporate bureaucracy. As the ripples spread throughout the economic world in numerous concentric circles, suspicion will turn into surprise.
What implications does Jose Munoz’s appointment have for Hyundai’s international expansion strategy?
Question: We are live at world-today-news.com with an exclusive interview on the appointment of Jose Munoz as the new CEO of Hyundai Motor Company. With us today, we have two special guests: Dr. Kim, a professor of Business Strategy at Seoul National University and Mr. Yang, the Director of Research at Korean Economic Research Institute. Thank you for joining us today.
Dr. Kim, can you start by sharing your thoughts on the significance of the appointment of Jose Munoz as the new CEO of Hyundai Motor Company? How do you think his background and expertise will contribute to the company’s growth and success?
Dr. Kim: The appointment of Jose Munoz as the new CEO of Hyundai Motor Company signifies a significant change in the management approach of the company. His background in marketing and sales, coupled with his experience at Nissan, make him well-suited to drive Hyundai’s global sales strategy. Additionally, his ability to innovate and adapt to changing market conditions could be a key factor in strengthening the company’s position in the highly competitive automotive industry.
Mr. Yang, how do you think this appointment fits into the larger context of corporate governance and leadership within the Korean business environment? What can other companies learn from this move by Hyundai Motor Company?
Mr. Yang: Hyundai Motor Company’s appointment of Jose Munoz is significant because it illustrates the increasing importance of international talent in driving innovation and growth within Korean conglomerates. It also signals a departure from the traditional method of promoting internal candidates based on bloodline or personal connections. Other companies can learn from this move to focus more on finding the best talent regardless of their background or nationality.
Dr. Kim, you mentioned that there are challenges associated with internal communication and the adoption of English as a common language within Hyundai Motor Company. Can you expand on this and discuss how this may impact the company’s culture and operations?
Dr. Kim: While adopting English as a common language might seem like a practical decision, it could potentially create tension between employees with varying levels of proficiency. Additionally, the loss of local knowledge and cultural understanding within the company could hinder its ability to adapt to changing market conditions. It’s crucial for Hyundai Motor Company to find a balance between promoting
