South Korean Car Manufacturer giant, Hyundai, has been enduring many organized union worker strikes in the past year that have damaged its productivity. Unions had issues with the worker’s wages, and this has occurred multiple times in the past. In fact, Hyundai has encountered a strike in 22 years of its 26 year existence. Why does it seem then that Hyundai simply fails to learn from its previous issues or mistakes and resolve the ethical issue of worker’s wages?
Regarding the ethical issue of Stakeholder Theory, Hyundai was unable to figure out how to make all of it’s stakeholder’s interests move in the same direction. This was clearly demonstrated by the employees taking industrial action, as their interests had been left behind. The company’s profits were on the decline, and there was pressure on the management to resolve the issue as quickly as possible. By conforming with the union’s demands, they were able to take their first steps in collectively moving the interests of all groups of stakeholders uniformly.
The management’s “social responsibility”, as stated by Friedman, is to maximize profits while staying within regulations, and having workers going on strike causing a decline in profits can be easily considered as corporately unethical. Such activities both created idle resources and caused a decline in the productivity of the company. The lack of unanimity among the groups of stakeholders caused instability within the company, and gave it the image of a business in decline. With increasing competition from Japanese carmakers, and recovering US manufacturers, it was crucial that the management was able to reinstate the stability that will be required to keep the company’s profits increasing.
Hopefully the South Korean firm will be able to finally settle its disputes with the ever-growing unions and get on with making internationally renown automobiles
Article: http://www.bbc.co.uk/news/business-24012301
