MANAGEMENT
PRACTICES AT
DAEWOO
INTERNATIONAL
CORPORATION
A report compiled by:
1. AZEEM BARI
2. HAMZA IQBAL
3. MUBEEN AHMAD
Page 1 of 18
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
Page 2 of 18
ABSTRACT
This is the summary of your entire project. More like a summary of your findings.
Page 3 of 18
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
Page 4 of 18
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
Page 5 of 18
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
Page 6 of 18
Organizations structure and Design at Daewoo Intl.
Page 7 of 18
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.
Page 8 of 18
Hierarchy within a Division
Hierarchy for Branch Offices
Page 9 of 18
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.
Page 10 of 18
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:
Page 11 of 18
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.
Page 12 of 18
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
Page 13 of 18
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
Page 14 of 18
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.
Page 15 of 18
CONTROLLING AT Daewoo Intl.
Operational controls at Daewoo Intl.
Page 16 of 18
LIST OF FIGURES
Page 17 of 18
REFERENCES
Page 18 of 18
Top Related