Analysis of Sustainable Business Practices at Kia Motors Corporation

This report examines Kia Motors' sustainable business practices and strategies, focusing on stakeholder analysis, financial performance, and competitive positioning. It identifies key stakeholders, including investors, employees, suppliers, and customers, and assesses their impact on the company'...Read More

Running head: SUSTAINABLE BUSINESS PRACTICES AND STRATEGIES
Sustainable Business Practices and Strategies
Name of the Student
Name of the University
Author Note

1SUSTAINABLE BUSINESS PRACTICES AND STRATEGIES
KIA Motor Corporation has its headquarters in Seoul, which is the second largest
manufacturer of automobiles in South Korea. The sales of the company have been estimated to
be 3.3 million in the year 2015 and Hyundai is one of the major shareholders who has a total
share of 34 percent in the company. The stakeholders of the company are a group of people who
creates an impact on the sale of the products in a direct or in an indirect manner (Gupta &
Sharma, 2014). The stakeholders help in putting pressure on the company so that they can
perform in a better manner and increase the output of the company. The decisions that are taken
up by the stakeholders helps in influencing the decision of the company as well, as they act in the
best interest of the company. The stakeholder of Kia motors is the investors, employees,
suppliers and the customers (Chen, Feldmann & Tang, 2015).
One of the primary stakeholders of the company is the investors who look after the rate of
profit of the organization. The investors are the primary stakeholders of the company, as it helps
them in transforming the share of dividends that are earned on the shares and keep the operation
cost of the company at a minimum level. This allows Kia Motors to maintain a higher rate of
profit level and minimize the operating cost as well (Zorkociova, Simorova & Sasikova, 2014).
The employees of Kia motors are provided with equal opportunities so that they can work
in an effective manner. Most of the employees are recruited without being discriminated on their
nationality, gender, religion and race. They are taken in to the process of decision making by the
company so that the management can make better decisions by consulting with the employees.
This helps the employees to get motivated, which helps them in giving better levels of
productivity (Dehning et al., 2017). The organization also provides its employees with job
security so that the employees can work in an efficient manner. This helps the organization in
increasing its level of productivity as well. One of the major concerns of the company is that they

2SUSTAINABLE BUSINESS PRACTICES AND STRATEGIES
provide low wages to the employees, which may affect them psychologically. The employees
may feel de-motivated within the organization, as they are not rewarded in a proper manner for
the services that they are providing within the organization. This is one of the major issues that is
present within the organization that needs to be solved in a proper manner so that the employees
can remain motivated (Barron, Pereda & Stacey, 2017).
The suppliers of the company are those who will provide the raw materials so that it can
be processed and supplied in the market for the customers to purchase it. The suppliers try to
control the prices of the raw materials, which may affect the operating cost of the Kia motors, as
the high prices may lead them to increase the prices when the product is available in the market.
The increase in the prices of the products will help the suppliers in getting a better rate of return
as well (Soo, 2014).
The customers are important stakeholders for the company, as it helps them in selling the
products in the market. The feedbacks of the customers will be considered by the company while
making any changes so that the level of comfort can be increased in the new products (Rhee,
Bohnsack & Lee, 2017).
One of the major competitors of Kia motors is Toyota, as they also provide new and
better products automobiles in the market at a competitive price. This has helped Toyota in
attracting a large number of customers towards them. Toyota is able to provide the products at a
cheaper rate because they maintain a good relationship with the suppliers, as the raw materials
are purchased by them at a cheaper cost. The company also takes in to consideration that the
employees are remunerated in a proper manner so that they can be an integral part of the
organization (Soo, 2014). The employees of Toyota are provided with a fair amount of wages

3SUSTAINABLE BUSINESS PRACTICES AND STRATEGIES
and salaries so that they can be motivated within the organization. Additionally, the employees
are also made part of the decision-making process so that their importance can be taken in to
consideration by the company. This is due to the fact that the employees communicate with the
customers at a regular interval. Toyota also provides the customers to become premium
customers so that they can avail the extra facilities that are present within the organization such
as free maintenance of the vehicle after a period of time. This allows the company to attract a
majority of customers towards them (Dehning et al., 2017).
The annual report for the company for 2017 shows that the profit has come to 27, 54,640,
that shows that the company is in a good position in its financial affairs. This salary of the
employees has been given at an amount of 278,251. The company has also spent on the
innovation part for their automobiles so that it can provide them a competitive advantage in the
market (Rakita, Madic & Markovic, 2017). The Research and Development team of the company
is very active, as the manufacturing of the hybrid cars has helped Kia motors in gaining a
competitive edge over the rivals that are present in the market. The company has sold around
62,510 cars in Korea and in the United States the sales volume for the company amounted to
112,490 units. In China, the volume of sales for the company was 193,410 units where as in
Europe; the volume has been 219,000 units. This shows that the company has positioned
themselves in a better manner across all the major markets that are present in the economy
(Gupta & Sharma, 2014).

4SUSTAINABLE BUSINESS PRACTICES AND STRATEGIES
Reference List
Barron, A., Pereda, A., & Stacey, S. (2017). Exploring the performance of government affairs
subsidiaries: A study of organisation design and the social capital of European
government affairs managers at Toyota Motor Europe and Hyundai Motor Company in
Brussels. Journal of World Business, 52(2), 184-196.
Chen, L., Feldmann, A., & Tang, O. (2015). The relationship between disclosures of corporate
social performance and financial performance: Evidences from GRI reports in
manufacturing industry. International Journal of Production Economics, 170, 445-456.
Dehning, P., Thiede, S., Mennenga, M., & Herrmann, C. (2017). Factors influencing the energy
intensity of automotive manufacturing plants. Journal of cleaner production, 142, 2305-
2314.
Gupta, P., & Sharma, A. M. (2014). A study of the impact of corporate governance practices on
firm performance in Indian and South Korean companies. Procedia-Social and
Behavioral Sciences, 133, 4-11.
Rakita, B., Madić, V., & Marković, D. (2017). Competitive strategies of late followers in auto
industry: case study Hyundai-Kia. Industrija, 45(1), 121-146.
Rhee, J. H., Bohnsack, R., & Lee, S. (2017). Hyundai Motor Company Case–Fostering Social
Enterprises. In The Role of Corporate Sustainability in Asian Development (pp. 119-143).
Springer, Cham.

5SUSTAINABLE BUSINESS PRACTICES AND STRATEGIES
Soo, K. G. (2014). Building your company with strong vision platform. International
Information Institute (Tokyo). Information, 17(7), 3021.
Zorkóciová, O., Šimorová, L., & Šášiková, M. (2014). Corporate Identity as a Strategic Tool for
Companies to Remain Competitiveness in Car Industry during Current Financial and
Economic Crisis. Journal of Applied Economics & Business Research, 4(1).