This paper examines the spread of Toyota Production System (TPS) through Korea, by focusing on the experience of Hyundai Motor Company. Drawing upon data obtained from field research, this case study interprets the adoption of TPS from an evolutionary perspective, arguing that the emulation of TPS should not entail adopting TPS as Toyota developed it originally, but to develop one's own production model. Over the past 40 years, Hyundai has developed its own production model, Hyundai Production System (HPS), initially emulating TPS, followed by re-interpreting and modifying TPS to adapt to the company's unique circumstances. HPS is a mutated form of TPS. The Hyundai case reveals that the adoption of TPS involves a complex evolutionary process of organizational learning and interpretation. This case sheds light on the possibility of various paths toward lean production, and demonstrates that both external and internal factors combine to form a complicated causal chain, influencing the 'mutated' emulation of TPS and generating a certain pattern of path-dependence in the evolutionary trajectory of a particular production model.
This study focuses on production engineers' skill formation to explain how the Hyundai Motor Company has succeeded remarkably since the 2000s as a litmus test of the post-catch-up question. Upgrades in Hyundai's technological capabilities, and in the sophistication of its production system during this period, are described and analysed in relation to a change in corporate governance, monopolised domestic market structure followed by industrial restructuring in the late 1990s, hostile industrial relations and the working of the internal labour market for production engineers. This study concludes that production engineers' skill-formation process is closely related to Hyundai's production system, which is distinct from those of foreign automakers. Its excessive automation utilises flexible production technology, which saves on skills on the shop floor; this is the key factor in Hyundai's considerable growth since the 2000s, given the systematisation and codification of projectbased problem-solving capabilities as an engineering skill, and the implementation of a more systematic, performance-based personnel management strategy. The analysis suggests that Hyundai as a litmus test of the post-catch-up question appears to be a mixture of discontinuity and continuity, which is reminiscent of the concepts of 'POST-catch-up' versus 'post-CATCH-UP'.
Purpose
Building on neo-institutionalism models of the transfer of human resource management (HRM) practices within multinational companies, this paper aims to analyze the transfer of skill formation concepts using the cases of two automotive OEMs in Slovakia. The purpose of the paper is twofold. First, it aims to explain the differences between the two multinationals. Second, it builds on the empirical analysis to reconsider the neo-institutionalist theoretical framework.
Design/methodology/approach
The paper is based on two qualitative case studies of automotive multinationals in Slovakia. The home country locations of both companies represent different approaches to skill formation: systematic vocational education for blue-collar workers is regarded as crucial at the German manufacturer, while the Korean company relies mainly on on-the-job-training and puts much less emphasis on skilled blue-collar work.
Findings
The paper shows that the differences between the companies are related to different understandings of technology/automation. It argues that the increasing automation and the decentralization of responsibilities for the product-launch processes supported the transfer of German skill formation concepts to the plant in Slovakia, while the Korean manufacturer’s specific engineering-led automation concept and centralization of product launch responsibilities in its Korean headquarters reduced the need to invest in skill formation for blue collars abroad. The paper concludes that theories of the transfer of HRM practices within multinationals must include technological factors and must also develop more specific concepts of the centralization of multinationals.
Originality/value
The paper is to the knowledge the first to include technology as a core variable into the neo-institutionalist theory in the field of international business and HRM. While the relationship between technology and organization has gained huge prominence in the recent discussions about digitalization, it has been so far neglected by scholars of international business.
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