Daewoo Business Failure

Daewoo Business Failure

Organizational Leadership 531

August 7, 2012

Abstract

This research paper gives a brief overview of the history of Daewoo Group and it discusses the determining factors that lead to its collapse in 1999. An analysis of this organization’s management, leadership, and organizational structure will depict how these contributing factors played an important part in the failure of this company. This paper shows how the collapse of a major company such as Daewoo Group not only causes painstaking loss for the company at hand, but it illustrates how a domino effect takes place when a large company fails.

Examining a Business Failure

The failure of Daewoo Group affords the business world an opportunity to learn from past mistakes of a major corporation. According to Henry Mintzberg, “there is a right way and a wrong way to design an organization” (Robbins &Judge, 2011). Proper planning must precede the starting of an organization and continue on throughout its entirety to become successful and continue forward in growth.

Daewoo History

At the end of the 1960’s the Korean government provided the right chemistry for Daewoo to explode on the scene. In an attempt to develop its’ country’s economic status, Korea increased access to resources, promoted exports, financed industrialization, and provided protection from the competition (The Rise, n.d.). It was these conditions that provided the necessary foundation for the emergence of the Daewoo Group.

The Daewoo Group was founded in March 1967 by Kim Woo-jung, the son of provincial governor Daegu (The Rise, n.d.). Daewoo was no ordinary company. It held as many as 20 divisions in the group and was considered the second largest conglomerate in Korea after the Hyundai Group. The Daewoo Group became internationally known and its’ brand recognition of Daewoo Motors, Daewoo Electronics, and Daewoo Securities were recognized all around the world (Daewoo, n.d.). Initially...