Hyundai Reputation Damage

May 21, 2006

Hyundai Reputation Damage

No doubt about it. The indictment of Hyundai Motor Company’s chairman Chung Mong Koo has thrown the company into disarray. Since South Korean companies are usually family controlled and operate top-down, a succession plan is not exactly in place. The embarrassment of government corruption charges among one of the country’s most charismatic and revered chairman is palpable. As a company spokesperson commented to The New York Times: “He is the Moses who brought us where we are today. We don’t know who could replace him.”

Knowing that this scandal has made headlines worldwide (the chairman’s image on this posting came up when I typed in Hyundai into Google Images), I went to the main Hyundai web site to see how it was being handled. Interestingly and not surprising, there was no mention of the chairman’s arrest and replacement. The chairman’s signed letter to web site visitors is still up.

The USA Hyundai web site also has no mention of the chairman’s predicament although I searched deep and wide. The new slogan at Hyundai USA is “rethink everything.” Sounds like the parent company should rethink what they are going to do next now that their chairman is issuing directions from a jail cell. The board needs to get professional management inside the company to keep it functioning and prevent paralysis. Another message I saw flashed on the Hyundai USA web site was a commitment to “open management.” Again, Hyundai needs to carefully review its promises as the world swoops in and carefully monitors how they are handling this crisis.

The Hyundai board needs to begin rescuing its reputation and showing leadership strength. One of the first steps in stopping the bleeding is to disclose the situation honestly and quickly. There is a small window of opportunity (and good will) that will suddenly close if Hyundai does not act soon. lgr

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Leslie Gaines-Ross
Leslie Gaines-Ross

As Weber Shandwick’s Chief Reputation Strategist, I focus on the ever changing world of reputation. For the past 25 years, I have relentlessly observed, researched and commented on the rise and fall of corporate and CEO reputations.

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