Question Salim K Business & Management

Ethical challenges faced by Hyundai Motors in India

What Ethical challenges are faced by Hyundai Motors in India?

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Answer Internal Staff

Hyundai are a South Korean producer of automobiles that operate globally and have production facilities in Sriperumbudur in Tamil Nadu. They are the second largest car manufacturer in India (Hyundai, 2016), employing around 9000 people (Hyundai, 2016a).

There are many ethical issues that Hyundai faces, and Corporate Social Responsibility is an area growing in importance that Hyundai need to take seriously.

One challenge they face is pollution; as a car manufacturer this is especially important. Air pollution in India is a serious problem (WHO, 2016) that the Indian Government primarily attributes to transport and factories (Government of India, n.d).

Hyundai need to make sure that they take all appropriate measures to limit the pollution they produce. The Volkswagen emissions scandal shows how consumers put great importance on pollution reduction and companies that cheat this can face significant backlash (BBC, 2015). Hyundai’s CSR policy sets out their aim to reduce pollution across all their sites globally (Hyundai, 2016b).

Another issue is the treatment of workers. International companies often seek to profit from cheaper labour in developing countries such as India. Hyundai has faced persistent problems with employee relations in regard to pay (In-Soo, 2015). However, they have recently joined other car manufacturers in offering Indian employees significant pay rises (Chandramouli, 2016). This may show a commitment to offering a fair deal to workers, and improving employee and community relations.

Another important issue is faced by any company with significant international investment - the extent to which they reinvest in the community. Companies that simply move profits abroad do little to benefit local development and may generate resentment and bad publicity. Hyundai appear to have recognised this issue and be committed to action, as is shown by their CSR policy and Safe Move and Happy Move campaigns (Hyundai, 2016c).

References

Chandramouli, R., 2016, Renault Nissan workers bag 57% increase in wages, Times of India (online), available [http://timesofindia.indiatimes.com/business/india-business/Renault-Nissan-workers-bag-57-increase-in-wages/articleshow/52696895.cms], accessed 08/08/16

Government of India, no date, Vision Statement on Environment and Human Health, available [http://envfor.nic.in/sites/default/files/visenvhealth.pdf], accessed 08/08/16

Hotten, R., 2015, Volkswagen: The scandal explained, BBC (online), available [http://www.bbc.co.uk/news/business-34324772], accessed 08/08/16
Hyundai, 2016, Who We Are (online), available [http://www.hyundai.com/in/en/AboutUs/HyundaiMotorIndia/WhoWeAre/index.html], accessed 08/08/16

Hyundai, 2016a, Sustainability Management: Social: Employees (online), available [https://csr.hyundai.com/ta_400_01.do?CSR_LOCALE_PARAM=en] accessed, 08/08/16

Hyundai, 2016b, Sustainability Management: Environmental: Climate change (online), available [https://csr.hyundai.com/ta_300_01.do?CSR_LOCALE_PARAM=en] accessed, 08/08/16

Hyundai, 2016c, CSR: Hyundai Motor India Foundation (online), available [http://www.hyundai.com/in/en/AboutUs/CorporateSocialResponsibility/index.html], accessed 08/08/16

In-Soo, N. 2015, Hyundai Motor Workers Strike at All Three Domestic Plants, Wall Street Journal (online), available [http://www.wsj.com/articles/hyundai-motor-workers-strike-at-all-three-domestic-plants-1442968897] accessed 08/08/16

WHO (World Health Organisation), 2016, WHO Global Urban Ambient Air Pollution Database (update 2016), available [http://www.who.int/phe/health_topics/outdoorair/databases/cities/en/], accessed 08/08/16