Implementing Change

Examining a Business Failure

LDR - 531

May 14, 2012

Ricardo Camacho

Examining a Business Failure

Why do Businesses fail? This is one of the questions most of the consumers have after they have seen the same corporations initially succeed. Most of the corporations have failed because of their lack of organizational leadership and unethical practices which include fraud, conspiracy, falsifying documents and embezzlement. Every individual and business has in common a common goal which is a desire to be successful, but failure and mistakes are the two teachers in every business. One such business that ran into financial trouble because of poor financial management is the Daewoo Group. The paper will highlight the failure; organization behavior theories that could have helped predict the failure and how the role of the leadership, management and organizational structure contributed to the failure.

Background

According to “Daewoo” (n.d), “In March of 1967 Daewoo Group was founded by Kim Woo- Jung, he was a graduate of a prestigious in university in Seoul where he received an Economics degree. Jung decided to become an entrepreneur and founded Daewoo Group. Daewoo Group had benefited from government sponsored loans which were based on potential export profits. The company initially concentrated on labor-intensive clothing and material industries that provided elevated profit margins. The most significant source in this plan was South Korea's large workforce. After a few years of trying to profit off of the clothing and material industries the government saw that the there was a greater demand and order Daewoo into shipbuilding.” Daewoo Group expanded its services into the automobile industry and became the seventh largest car exporter and the sixth largest automobile manufacturer in the world (Economist, 1999). During this time, Daewoo experienced enormous success at turning around uncertain companies in Korea. Twenty years later after the founding of...