Chaebol Organization and Modular Production: The case of Hyundai Motor

Type de publication:

Conference Paper


Gerpisa colloquium, Paris (2015)


Chaebol, Hyundai Motor, Modular production


Given that Hyundai Motor has developed its own organization form called ‘chaebol’ different from that of other automakers, this study aims at exploring how the organization of chaebol has contributed to Hyundai Motor as a global automaker in a positive and negative way. Modularization can be recognized as one of the domains where the attribute of chaebol organization would be best embedded. Although Hyundai Motor has begun with modularization in the 2000s a little bit later than other competitors, it has currently showed a high performance with a global level of modularization. We hypothesize that what Hyundai Motor has successfully implemented modular production in such a short time could be significantly attributed to the characteristics of chaebol organization.

According to Gereffi et al. (2005), modularization gradually and more could lead to increase the codification of information and reduce the complexity of inter-organization transactions. In addition, as modular suppliers develop their own technological capabilities which cannot be accessed by lead firm, it is hypothesized that there would be equal and open transactions between the lead firm and its suppliers. However, this argument appears to mechanically relate the technological aspect of production to the nature of transactions within a value chain. Despite of the existence of similar technology (modularization) the characteristics of value-chain and inter-firm transactions could be differentiated by the attributes of organization, that is, how the elements of the technology are organized.

In the case of Hyundai Motor the closed and hierarchical value-chain structure has emerged through a combination of the nature of chaebol organization and the element of technology (modularization). In this work we will examine how the chabol organization has impacted on the modularization process of Hyundai Motor in terms of 1) decision-making; 2) work organization; and 3) the supply structure of components and parts.

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