Positive and Negative Aspects of Hyundai Motor Companys Performance - Case Study Example

Introduction The current state of the environment is characterised by environmental risks such as Ozone depletion, climate change, environmental degradation, pollution and resource depletion. These risks threaten the survival of natural resources, animals and human life (Kemp 1998). A considerable number of studies suggest that, human activities in the face of the earth are the main cause of these environmental risks. For example, climate is a major environmental risk today, scientist are in consensus that human activities have brought irreversible changes in the environment. Deforestation, improper land use and combustion of fossil fuel have increased the level of CO2 emissions which has in turn led to adverse climate change (Diederen 2010; Kemp 1998; Solomon et al 2009). Over time, there has been increasing awareness over the role that multinational companies play in addressing environmental issues such as pollution, global warming and the use of sustainable energy sources. Consumers have become increasingly concern about the impact that operations of large companies have on the environment that they live in. Public opinion particularly seems to be harsh on companies whose operations and products have a negative impact on communities (Straughan & Roberts 1999). As a result, many companies have adopted various policies and measures in attempt to become more sensitive and responsible to environmental issues affecting the community (Hitchcock & Willard 2009; Lash & Wellington 2007; Stafford, Ottman & Hartman 2006). Hyundai Motor Company is a good example of a company that has over the years attempted to become responsive to environmental issues affecting communities by adopting measures that aim at promoting environmental responsibility and sustainability. However, the company has been accused for being a major polluter. This paper seeks to critically examine the actions, behaviour and performance of Hyundai when it comes to treatment of the natural environment. It will discuss the positive and negative aspects of Hyundai’s performance when it comes to the treatment of the natural environment and the impact that their behaviour and performance has had on stakeholders and the society in general. Case for Hyundai Hyundai Motor Company is a multinational motor vehicle manufacturing company with main headquarters in Seoul, South Korea. The company has regional operations in USA, Canada, New Zealand, Brazil, Domican Republic, China, India, Philippines, Turkey, Australia, Egypt and Russia among many other countries (Lansbury, Suh & Kwon 2007). As a company that specializes in the manufacturing of automobile, there are definitely pressing environmental issues involved. Firstly, the manufacturing process of automobile has been associated with environmental issues such as use of excessive energy, Greenhouse gas emissions and discharge of hazardous material such as hexavalent chromium, lead-acid and nickel into the atmosphere. Secondly, the use of automobile has also been linked to environmental pollution, climate change and excessive fuel consumption (EP 2008; EPA 2013). Thus, it is plausible to argue that Hyundai’s operations and products have adverse effects on the environment. As a result, the company has over the years attempted to become responsive to environmental issues affecting communities by adopting measures that aim at promoting environmental responsibility and sustainability (Hyundai 2013). Hyundai has an environmental policy that sets standards for the company’s environmental practices and provides a blue print on how various regional operators can protect and preserve the environment for the benefit of local communities. Besides, this the company has put in a lot of effort to minimise pollution and enhance fuel efficiency. For instance, the company strives to ensure low carbon manufacturing in all the stages of automobile lifecycle starting from the manufacturing process to the vehicle manufacturing process. The company regularly takes Greenhouse gas inventories as required by the Environmental Protection Agency. By so doing the company is able to monitor its Greenhouse gas emissions and ensure that there is low emission in the environment. This not only ensures that there is minimal impact on Ozone depletion but it also protects natural ecosystems, animals, marine life and the health of people in the surrounding communities ( BC Air Quality 2013; Hyundai Czech 2013). Furthermore, through its Blue Drive Initiative the company has managed to develop environmentally friendly automobile that are equipped with green technologies that enable users to lower Greenhouse gas emissions. This initiative has also seen the development of hybrid and electric vehicles that incorporate technologies that promote fuel efficiency and the use of biofuels. Such initiatives have helped consumers to save on costs associated with purchasing of fuel. Some consumers within the community find that fuel-efficient vehicle such as those produced by Hyundai have enhanced their safety, comfort and convenience (Hyundai America 2013). In 2008, Hyundai in partnership with the Korean Federation for Environmental Movement (KFEM) initiated the Hyundai Green Zone project, an ambitious five-year project in China that aims at turning desert into grassland. The project generally involves turning 50km2 of dessert land into grassland in order to prevent desertification and safeguard the wellbeing of local ecosystems. This project helped to create employment and provide livelihood to people in the surrounding local community. It also revived farming practices in the areas involved (Hyun-Cheol 2008). In addition to this, the company ensures that in its manufacturing plant there are state-of-the-art technologies that enhance environment protection. For instance, the company has waste management systems that ensure that proper treatment of dangerous waste materials prior to their disposal. Throughout its regional operation bases Hyundai has also adopted Environmental Management Systems which continually and proactively optimize internal systems in order to improve the company’s environmental performance and ensure compliance with all applicable environmental regulations (Hyundai Danvers 2013). The case against Hyundai Ulsan, located in the east coast of South Korea, is the corporate hub of Hyundai. By the 1980s, Hyundai Motors, Hyundai Industries and several other companies in the Hyundai conglomerate transformed Ulsan from a fishing port and a market centre to one of the incubators of Korean industrialisation. Hyundai had extensive operations in Ulsan ranging from motor vehicle and ship assembly to the manufacture of railway containers, deep sea drilling rigs, and pipes as well as owning Ulsan University. In essence, Ulsan was Hyundai and Hyundai was Ulsan, leading a French magazine to mistakenly name Ulsan “Hyundai City” (Kirk 1994). However, while Hyundai transformed Ulsan into Korea’s industrial powerhouse, it also made it one of Korea’s most polluted cities. Awareness on the adverse environmental impact of Hyundai’s operations on Ulsan and the neighboring Onsan was only raised through the efforts of various social activists who felt that the environmental impact of the Hyundai’s activities was being suppressed by the government’s strategy for development through the promotion of rapid industrialization (Eder 1996). Consequently, health and safety problems in industrial zones such as Ulsan did not appear to be as significant as grinding poverty at the time. Formed by social environmental activists in recognition of the impact of Hyundai and other corporations’ operations, The Korean Anti-Pollution Research Institute began to air concerns over chemical and heavy-metal poisoning as well as air pollution from the numerous Hyundai factories in the sprawling industrial complex (Eder 1996). Ulsan was reported to be so polluted that Hyundai executives would refuse to be transferred to the city and instead preferred to commute from Seoul (Clifford 1996). Chemical contamination and air pollution from heavy industry made living conditions next to industrial complexes in the city intolerable (Clifford 1996). Scientific evidence in the form of studies on trace organic contaminants in sediments and water from Ulsan bay also showed high concentration of polycylic aromatic hydrocarbon (PAH) and bisphenol A contamination in streams near Hyundai Ship Repairing Dock (Khim et al 2000). Similarly, studies on sources of air pollution in Ulsan show that a majority of aerial pollutants such as sulfur oxides, nitrogen oxides and volatile organic compounds originate from point sources such as power and manufacturing plants with levels of sulfur dioxide (SO2) and total suspended particulates in Ulsan often exceeding World Health Organization (WHO) air quality guidelines (Lee et al 2001). The stakeholders that were most adversely affected by Hyundai’s operations in industrial complexes such as Ulsan were the local population. While on one hand Hyundai the residents of Ulsan depended largely on Hyundai for their livelihood as the conglomerate transformed the city and raised per capita income to unprecedented levels, they had to bear the environmental consequences of the pollution-intensive nature of Hyundai’s operations (Clifford 1996). In particular, the farming and fishing communities in Ulsan experienced disruption of their sources of income due to heavy pollution of fisheries by industrial effluent from the shipyards and as “fruit withered on trees and rice shriveled in paddies” (Institute of South East Asian Studies 2000; Clifford 1996). From a health perspective, the pollution-intensive nature of Hyundai and other corporations’ operations has also negatively affected the health of the residents of Ulsan. A study comparing the relationship between air pollution and daily mortality in Ulsan and Seoul observed an association between the level of pollutants and daily mortality which implies that pollutants are possible contributors to premature death (Lee et al 2001). Since the late 1980s, the conditions in Ulsan have improved largely due to the efforts of environmental activists and increased emphasis on sustainability and green supply chain management in global markets (Lee et al 2001). However, despite the adoption of newer technologies and supply chain environmental management in Korea, air pollutant levels in Ulsan still exceeded WHO air quality guidelines in 2000. Therefore, the environmental legacy of Hyundai in Ulsan demonstrates the damage to the environment occasioned by rapid industrialization. Conclusion Generally, this paper has discussed the positive and negative aspects of Hyundai’s performance when it comes to the treatment of the natural environment and the impact that their behaviour and performance has had on stakeholders and the society in general. The findings of this paper show that there has been increasing awareness over the role that multinational companies play in addressing environmental issues such as pollution, global warming and the use of sustainable energy sources. As a result, companies such as Hyundai have adopted various measures in attempt to become more sensitive and responsible to environmental issues affecting the community. In general, Hyundai has exerted significant efforts to become responsive to the environmental issues affecting communities. The company has come up with initiatives to minimise carbon emission, enhance fuel efficiency and prevent desertification. However, the company has failed to effectively address, the pollution-intensive nature of its operations. Consequently, the natural ecosystems, animals, marine life and the health and wellbeing of people in the surrounding communities have been adversely affected. While the company’s effort to minimise carbon emission and enhance fuel efficiency are commendable, there is need for the company to marshal resources for research and enhance its efforts so as to address pollution-intensive nature of its operations. References British Columbia Air Quality, Impact of Ozone Depletion, Retrieved on December 8, 2013 Clifford Mark, Troubled Tiger: Businessmen, Bureaucrats, and Generals in South Korea,( New York: M.E. 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