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Balanced Scorecard Analysis of Hyundai and Honda

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Two of the major players in the global automobile industry are Honda and Hyundai (also known as Hyundai Motor Group). These business organizations have global scope of operations, and they have maintained considerable growth and expansion in recent years despite the slowdown of the Western economies. The positions of Honda and Hyundai emphasized the capabilities of these firms to maintain a positive and profitable strategic outlook, especially in terms of their operations in various regional markets other than the United States. While the American automobile market has encountered major obstacles associated with the 2008 financial recession, these companies have maintained considerable growth in revenues in developing economies, although they suffered in terms of losses or decline in revenues coming from within the American market (Blackburn, 2010). The discussion in this document presents an examination of the various characteristics of these business organizations, particularly measurements or metrics used, knowledge management, the situation of their workforces, as well as the characteristics of their operations focus and results.

It is argued that these business organizations have considerably positive outlooks based on their operational characteristics using some examples from the balanced scorecard perspectives. As a result, both of these organizations are also in respective strong positions to compete against each other in the global automobile market. Hyundai is a large business organization with multinational operations. The organization is based in South Korea, and is generally considered as the biggest automobile company based in that country. However, it is important to note that this business organization is not necessarily limited to the manufacturer of automobile products, although the company is most popularly known for its automobiles. For example, the company also manufactures auto parts, as well as steel. The company also manufactures defense vehicles for South Korea, as well as heavy industrial tools and machinery. Furthermore, there is also a part of this business organization that manufactures electrical products. However, for the purpose of this discussion, emphasis is given more on the automobile business of this company.

The headquarters of companies located in Seoul, but the actual scope of operations is worldwide. It has significant presence in the American market as well as in Europe. It also has increase extensive presence in markets in the developing economies, especially in Southeast Asia (Hyundai, 2013a). On the other hand, Honda is also a large business organization based in Japan. This Japanese company is most popularly known for its automobile products. However, similar to the case of Hyundai, Honda is also a manufacturer of other products, such as aviation products or aviation parts, as well as telematics products. The company is also well known for its production of robotics machinery. Furthermore, the company is currently involved in the production of bikes and motorcycles, as well as solar cells (Honda, 2013a). The headquarters of this company is located in Hamamatsu in Japan, but the scope of operations of the business is worldwide. It has major operations in the United States, Canada and the European markets. Furthermore, similar to the case of Hyundai, Honda also contains extensive operations in developing economies, such as the countries of Southeast Asia (Honda, 2013a).

In terms of management measurement/metrics as well as knowledge management, business organizations Honda and Hyundai employ extensive R&D activities as well as business strategic formulation. The R&D departments of these business organizations are primarily the ones responsible for knowledge management pertaining to product development and design. For example, both Honda maintains R&D efforts for the purpose of developing advanced robotics, among other products (Honda, 2013a). Basically, the company uses knowledge management for the purpose of identifying potential opportunities when it comes to product design and development, based on the characteristics of their target markets around the world. The information collected from their worldwide operations is used for the identification of these opportunities. The resulting identified opportunities are then translated into product design and other related activities in the R&D department.

In addition, management measurements/metrics used, the company uses a wide variety of metrics, including metrics pertaining to the operational efficiency of manufacturing plants, as well as metrics related marketing and sales activities in the target markets. Metrics are also used for the purpose of evaluating organizational performance based on the productivity levels of individual employees. These are just some of the major metrics used in the company (Honda, 2013a). From the internal process perspective, and the learning and growth perspective, it is possible to analyze the situation of Honda in terms of management practices used. For example, the company’s internal process perspective emphasizes the need for a considerably high level of process efficiency, noting that the companies actually facing considerable challenges. These challenges are emphasized in the financial perspective of a balanced scorecard for this business organization, in relation to the deadline of the US market and European market for automobile products.

On the other hand, in the learning and growth perspective, the company can use knowledge management for purpose of collecting valuable information that he could use for taken advantage of possible opportunities that it may have for its businesses, such as the development of new products, an increase of about 10% in its product design and development output, and so on. On the other hand, Hyundai has a situation similar to the case of Honda. Basically, Hyundai maintains knowledge management activities based on the collected information from its various operations worldwide, and the operations from its various businesses. As noted earlier, accompaniment taints a variety of businesses in addition to its automobile manufacturing business. The information collected from these business operations are used as basis for the identification of possible business opportunities, such as the development of new products related to one or any combination of its business outputs (Hyundai, 2013b).

The company also uses metrics for the valuation of business organizational performance, such as metrics used for HR performance, as well as metrics used for sales in my getting, and so on. Hyundai can use the internal process perspective, and the learning and growth perspective in order to identify possible steps that can be taken to address its current financial situation, which has declined as a result of the difficulties facing the American and European markets. For example, from the internal process perspective, the company can increase the overall streamlining its processes for the purpose of minimizing wastage and maximizing productivity. On the other hand, from the learning and growth perspective, it can be argued that this company can focus more on the learning and growth achievable through R&D efforts for the development of new products, noting that advanced features and technologies in automobile products are frequently considered as attractive factors that make these products more sellable (Sturgeon, et al., 2008). The workforce aspect of the organization of Honda is based on extensive utilization of talent and skills for the purpose of maximizing organizational efficiency, such as efficiency in manufacturing processes. For example, it should be noted on the firm is known for its advanced robotics technology.

The development of its robotics technology puts emphasis on the ability of the business organization to make use of expertise of its workforce pertaining to this particular industry (Honda, 2013a). Furthermore, the company also uses its workforce for the purpose of directly interacting with its target markets, as well as for the purpose of developing suitable programs to support its corporate social responsibility efforts (Honda, 2013b). In terms of operations, Honda has posted continued expansion and growth in developing economies, based on the ability of these economies to continue to develop their market potential. However, as noted earlier, this company has experienced significant decline because of the recession in the United States and Europe (Cachon & Olivares, 2010). For example, reports indicate that the company actually has a current level of revenues amounting to ¥7.94 trillion for its global operations, but this level of revenues is significantly lower in comparison to the revenues of the company in the previous fiscal year (Honda, 2013a). Furthermore, the operations of the company can also be considered in terms of its large workforce.

At present, the company maintains more than 179,000 employees worldwide (Honda, 2013a). The company can use a financial perspective in order to identify opportunities. For example, the financial perspective emphasizes the need for this business organization to identify possible opportunities in developing economies, instead of focusing mainly on its traditional core markets in the United States and Europe. The company could aim for an increase of 10% in its sales revenues within the next 2 years in the operations it has in the developing economies. Furthermore, the company can also use the customer perspective us a way of identifying the potential opportunities it has to increase customer loyalty as a way of counteracting the increasing competitive force coming from Chinese automobile manufacturers (Sun, Mellahi & Thun, 2010). On the other hand, in the case of Hyundai, it should be noted that this business organization maintains operations amounting to a global total of 77.8 billion Korean Won for its global operations (Hyundai, 2013b).

However, it should be noted that, similar to the case of Honda, Hyundai has also experienced a significant decline in its operations because of the recession in the United States and the recession and the European countries (Cachon & Olivares, 2010). As a result, the company is facing considerable challenge associated with the decline of its markets in the United States and Europe. Similar to the case of Honda, this company can also take advantage of the financial perspective as a way of identifying potential opportunities that it has in order to increase its financial performance. For example, many business organizations nowadays are focused on the expansion and growth of their operations in the developing economies, such as the economies in Southeast Asia. As a result, it would be beneficial for this business organization to aim at increasing its financial performance based on an increase of, for example, 10% in its sales revenues from the Southeast Asian regional market. In relation, the company can use the customer perspective toward identification of current trends that can be used in order to maximize the overall attractiveness of the products of this firm.

For example, the company can use the customer perspective in order to increase the development of features in its automotive products that would satisfy environmental efforts to address global warming. In conclusion, Hyundai and Honda are large business organizations that exposure to the financial decline in the United States and European markets. However, these business organizations can take advantage of the continuing economic growth in developing economies, such as the countries in Southeast Asia. As a result, companies can actually focus their activities within these developing economies. The use of the balanced scorecard emphasizes the increased attention needed for improve the operations of these business organizations in these developing economies to improve their financial performances.


Blackburn, C. (2010). Downfall of the US Auto Industry: Short Report. Gatton Student Research Publication, 2(2), pp. 1-8. Retrieved March 30, 2013 from http://gatton.uky.edu/GSRP/Downloads/Issues/Fall2010/Downfall%20of%20the%20US%20Auto%20Industry%20Short%20Report.pdf Cachon, G., & Olivares, M. (2010). Drivers of finished-goods inventory in the U.S. automobile industry. Management Science, 56(1), pp. 202-216. Retrieved March 30, 2013 from http://opim.wharton.upenn.edu/~cachon/pdf/cachon-olivares%201.pdf Honda

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