[Exclusive] Chung Eui-sun's 'Innovative Management' on Trial... Hyundai Mobis to Restructure into Business Unit System Next Month

Hyundai Mobis to Expand Division-Based System Company-Wide from June
Transition to Item-Specific Division System... Spreading Horizontal Organizational Culture
Reporting Structure Simplified to 3-4 Levels, Enhancing Work Efficiency
Mobis Tests Chung Eui-sun Style Innovative Management with Autonomous Seating and Remote Work Systems

[Asia Economy Reporter Su-yeon Woo] Hyundai Mobis will implement a divisional organizational system across the entire company starting in June, operating organizational structures by business item. This strategy aims to quickly respond to market changes and improve work efficiency through a horizontal organizational structure. Attention is focused on whether this organizational restructuring, reflecting the 'innovation management' policy emphasized by Hyundai Motor Group Vice Chairman Chung Eui-sun, will expand throughout the group companies.

According to the automotive industry on the 26th, Hyundai Mobis will carry out an organizational restructuring next month by reorganizing the organization according to business items. A related task force has been formed to draft the blueprint for the new organization, and detailed information about the restructuring is expected to be announced as early as this afternoon. The core content involves shifting from the existing function-based system?such as production, design, marketing, design, and quality control?to a business item system, including divisions like the Sports Utility Vehicle (SUV) Division, Commercial Vehicle Division, and Future Vehicle Division (tentative name).

Previously, Hyundai Mobis introduced a divisional system in some departments, such as the Electrification Division in 2018 and the Lamp Division last year, operating them individually. Having confirmed the synergy effects from adopting the divisional system, Hyundai Mobis has decided to expand this operation company-wide. The decision-making process will also be drastically reduced to 3-4 steps. Through this, the company plans to spread an 'Agile' horizontal organizational culture to enhance product development expertise and strengthen responsible management.

The divisional organizational system is a method of organizational operation implemented by large corporations such as Samsung, LG, and SK Group. In companies that are not large in scale, organizing by function?such as production, design, marketing, quality control, finance, and accounting?improves work efficiency, but in large corporations handling multiple business items, function-based organizations can actually reduce efficiency.

On the other hand, if production, development, design, and marketing departments are separately placed under each business division according to business items such as compact cars, commercial vehicles, and eco-friendly vehicles, it is expected to speed up market responsiveness and decision-making. This is because each division can focus solely on analyzing the market of its assigned item, quickly detect trend changes, and simplify the work reporting system.

This approach aligns with Vice Chairman Chung’s previously mentioned 'innovation in working methods.' In his New Year's address this year, Vice Chairman Chung stated, "We will promote change and innovation in the way the organization thinks and works." Since then, Hyundai Motor Group has been accelerating internal cultural innovation by consecutively implementing policies such as a flexible dress code, free seating, and abolishing handwritten face-to-face approvals. The personnel evaluation method has also shifted from relative evaluation to absolute evaluation, and a selective working hours system has been applied to establish a flexible work system.

In particular, Hyundai Mobis is being operated as a testing ground for the group's 'innovation management' potential. The free seating system, where employees choose their desired seat daily instead of fixed seating, was piloted last year in some departments of Hyundai Mobis and Kia Motors and is now spreading to all group companies including Hyundai Motor Company.

Also, although Hyundai Motor Group stopped remote work at the end of March due to the spread of COVID-19, Hyundai Mobis continues to operate a two-shift remote work system within departments. This is a pilot operation to examine the feasibility, effects, and side effects of remote work introduction.

An industry insider said, "Excluding the headquarters of Hyundai and Kia Motors, Hyundai Mobis is the largest affiliate within Hyundai Motor Group, so various innovation possibilities are being tested through Mobis. If this divisional restructuring is successfully established at Hyundai Mobis, it is highly likely to spread to all affiliates."