1 INTRODUCTION
The research on the academic field of international business (IB) is a bit latter-day. Starting with the pioneering works of Dunning (1958) and Vernon (1965) on firm internationalization, the field has grown momentously churning out some time-tested theories. Unlike its counterpart business disciplines which focus on narrow subject areas, IB research is broader focused and draws on multidiscipline approaches (Aggarwal 2004) to explain the reasons why businesses go international.
It has been argued by Wang et al. (2008) that a firm’s internationalization process being more sophisticated calls for a multiple approach to be able to understand its nuances, the aim of this report is to use at most seven IB theoretical approaches to analyze the internationalization of Hyundai Motors Corporation (hereafter HMC). The analysis will seek to test the basic assumptions and concepts of the various theories, identify and question basic deviations of the theories from the internationalization of HMC and search for answers as to the reasons for the deviation.
This report begins with a brief historical account of HMC’s evolution, internationalization and current position in the global automobile industry. A brief review of the internationalization theories which are used in this analysis is undertaken. A thorough analysis of various phases of HMC’s internationalization using the theories (where applicable) then follows. A conclusion is drawn whether HMC’s global operations fit or deviated from the assumptions that these theories posit.

2 COMPANY HISTORY AND LITERATURE REVIEW

This chapter starts with a brief account of how HMC was formed, its historic timelines and its momentous journey from a knockdown assembler to becoming a hugely successful and influential multinational company in the automobile industry. The various theories of internationalization are then briefly reviewed to lay bare their basic assumptions and key concepts. 2.1 Brief History of Hyundai Motor Company

The Hyundai Motor Company’s (hereafter HMC) global success has been one of ‘grass to grace’. It began as a Complete Knockdown (CKD) assembler in 1968 (Lansbury, Suh & Kwon 2007: 51) and has now grown to become a respected multinational automobile manufacturer and occupies an enviable fifth spot in the league of world’s top-ten car manufacturers in terms of annual sales in 2012. (REUTERS 2013.)
HMC was founded in 1967 by a South Korean entrepreneur, Chung Ju Yung and immediately entered into a technology-sharing agreement with Ford. Exactly one year after its birth, HMC together with Ford developed its first car: the Cortina (HMC 2012). Its alliance with Ford ended in 1973 as a result of misunderstanding regarding managerial control and international market strategy issues (Lansbury et al. 2007: 51). HMC developed its own design and built model- the Pony with capital and technical support from Mitsubishi Motors of Japan in 1976
(Autoevolution 2013). Exports followed immediately to South America. With the initial success of the Pony, HMC developed its mass production system which saw sales increase sharply. In 1984, HMC exported the Pony to Canada and it became instant success becoming. The apparent success made HMC to establish its first overseas plant in Canada in 1985 but that plant was closed in 1993 due to operational inefficiencies and poor industrial relations (Teal 1995).
Following HMC’s impressive performance in Canada, it made a foray into the United States (US) market in 1985 and made its first export of Excel- a competitively priced brand in 1986. The car was highly bought by US consumers that it was achieved excellent sales in the compact car category for three consecutive years (HMC 2012). HMC ended the decade on a high note with the release of its mid-sized sedan, Sonata from its own internally developed technology (Autoevolution 2013). This marked the beginning of an era of sustained growth.
The decade that followed saw some epoch making events at HMC. It developed its first electric car and launched its first Korean-developed Alpha engine in 1991. Korea’s first concept car was developed (1992). In 1996, HMC completed it research and development (R&D) complex at Namyang, Korea and achieved a cumulative production of over 10 million units. It completed its Turkey and India plants in 1997 and 1998 respectively and acquired its key competitor, Kia Motors also in 1998 (HMC 2012).
HMCs focus in 2000’s was to expand to all corners of the globe, intensify its efforts in R&D to develop new generation vehicles and engines that are ecological friendly, brand building and sports marketing efforts. Today, the group employs 80,000 people worldwide and operates seven international plants in the US, Turkey, India, China, Czech Republic, Russia and Brazil. These plants together with the Korean plants (Ulsan, Asan and Jeonju) have a combined annual production capacity of 4.42 million units (Hyundai Global 2012). The BusinessWeek (2013) report shows that the total revenues of HMC at the end of 2012 stood at US$ 84 billion while its net income and total assets were US$ 9 billion and US$ 109 billion respectively. Its total equity was US$ 43 billion.

4.2 Literature Review

The theoretical assumptions, key concepts and questions underpinning these theories are briefly explained below.

4.2.1 The Learning Model
The learning model was pioneered by two Swedish scholars (Johansson & Vahlne 1977). Based on the experience of Swedish multinationals, they developed a stages model which later on became known as the Uppsala Model. The assumption behind this model is that the scarcity of knowledge of foreign markets makes difficult for firms to enter international markets and it is only by entering the market that the knowledge can be acquired. Also, the model proposes that firms start their international operations gradually first through a foreign sales agent, then establish a sales subsidiary before finally setting up a full-fledged production operation. Finally, they advise that to minimize psychic distance and its attendant uncertainty, businesses should start their international operations from socio-culturally and geographically close nations before extending to socio-culturally and geographically far countries.

4.2.2 Theory of International New Ventures

Some recent studies have criticized the inadequacy of the internationalization process theory to explain the internationalization process of some firms, particularly those in the high technology sectors (McDougall & Oviatt 1994, Bell 1995, Knight & Cavusgil 1996). This criticism arose when it was observed that these firms often start their international forays from their inception by entering different countries and targeting new markets. This phenomenon has been labeled various as born global (McKinsey & Co. 1993), global start-ups (Oviatt & McDougall 1994), international new ventures (McDougall et al. 1994) and instant exporters (McCauley 1999). Knight and Cavusgil (1996) and Lorange (2002) present some of these conditions as: niche market firms going global due to pressure on them to be successful; advances in production and logistics technology; advances in communication technology; agility, flexibility and adaptability advantages of small firms; entrepreneur’s foreign market knowledge and international experience; and global networks. They also argue that in spite of these conditions, only a few of all new firms can become born globals. Freeman et al. (2006) identify certain factors which are linked with born globals quick internationalization. These are: A small local market; management belief and commitment to foreign market; personal networks; unique technology; and growth through partnership and alliances. Finally, for international new ventures to be sustainable, Oviatt and McDougall (ibid) propose that they: 1) internalize some transactions 2) adopt alternative governance structures and good partnerships 3) acquire foreign location advantage and 4) possess unique resources.

4.2.3 The Resource Based View

The Resource- based view, having emerged in the mid-eighties and nineties, has become one of the cited theories in a wide array of disciplines (Kraaijenbrink, Spender & Groen 2009). Wernerfelt (1984) set the pace and other respected scholars like Rumelt (1984), Barney (1986a, 1986b, 1991a), Dierickx & Cool (1989), Conner (1991, Conner & Prahalad 1996), Helfat (Castanias & Helfat, 1991; Helfat & Lieberman, 2002), Kogut and Zander (1992), Amit & Schoemaker (1993), Peteraf (1993), and Teece (Teece, Pisano & Shuen 1997) followed suit. It seeks to explain a firm’s internal sources of its sustained competitive advantage. The theory assumes that for a firm to maintain a sustainable competitive advantage (SCA) over its competitors, it must possess some resources which are heterogeneous in nature and also very immobile (Barney 1991b). For this bundle of assets (tangible and or intangible) to achieve the desired results, Barney (1991a, 1994), further posits that they must be valuable, rare, inimitable, and non-substitutable (VRIN). Tacit knowledge, observe Kogut and Zander (1992), is likely to be transferred internally while codified knowledge tend to be transferred to third parties. Other related views like core competences (Hamel & Prahalad, 1994), dynamic capabilities (Helfat & Peteraf, 2003, Teece et al. 1997) and the knowledge-based view (Grant 1996b) seem to support this assumption. RBV has been observed by Peng (2001) as a link between the fields of Strategic management and international business and its valuable in the assessment of a firm’s multinational management, strategic alliances, entry modes and international entrepreneurship.

4.2.4 The Eclectic Theory (Paradigm)

This theory, also known as the OLI-framework or OLI-model, has its root in a number of economic theories like the foreign direct investment theory (Coarse 1937) and the transaction cost theory (Williamson 1975, 1985, Anderson & Gatignon 1986). This theory was first proposed by Dunning in 1976 following the earlier works on multinational enterprises (MNEs) by Aharoni (1966), Vernon (1966, 1971), and Caves (1971). The main proposition of the paradigm is that the degree and nature or pattern of a firm’s international production via foreign direct investment (FDI) hinges on a set of three factors: 1. A firm that seeks to enter foreign markets must possess some rent-generating assets and this Ownership (O) of assets gives it some advantages over its competitors or potential competitors in the host market. Dunning (1980) list sources of these assets as trademarks, patents, trade secret, excess entrepreneurial capacity and economies of scale production. 2. A firm is attracted to a foreign country or region if that country or region has some locational advantages (L) which the firm can exploit with its Ownership advantages to reap substantial returns. Again, some of the sources of these advantages are: low factor prices, appropriate technology, and some deliberate government incentives like trade barriers, tax holidays, fewer restrictions on profit repatriation, availability of potential market. 3. A firm operates abroad if it can utilize its rent-generating assets to produce more profitably internally (I) than selling those assets to a firm in the foreign country. Dunning (2000) argues that it is better to have a fully owned subsidiary than to go for other entry modes like alliances and licensing. Transaction costs, reputation protection, control over distribution channel and uncertainty have been cited as the reasons for total control (Pederson 2003).
The framework again posits that the applicability of OLI advantages is likely to be suited to a particular situation and that it differs across industries, geographical locations and among firms (Dunning 2001)

4.2.5 Institutional Theory

This theory has its foundation in many disciplines: sociology (Scott 1995), economics (North 1990) and organizational theory (DiMaggio & Powell 1983). The theory avers that the decision of a firm to enter a new industry or to start a foreign operation may be due to purely economic reasons; the decision is, however, taken in a social context (Klepper & Graddy 1990). Firms do not operate in a vacuum but they are governed by the interplay of institutional activities at the individual, organizational and inter- organizational levels (Oliver 1997). Institutions, according to Jansson (2002) are norms, rules, business mores, routines that are peculiar to a recognized social unit. The main propositions underlying this theory are institutions and legitimacy. It assumes that firms are influenced by external institutions and they deal directly or indirectly with those institutions. As such, businesses need to be abreast with the existing rules in their environment and modify their behavior to suit these rules. These external institutional contexts, following Jansson (1994b; 2001), Whitley (1992a; 1992b; 1996) and North (1990), consist of three strata: micro institutions (individual firms), meso institutions (organizational fields) and macro institutions (political and legal systems, regulatory bodies, social and cultural norms). Each of these institutions is governed by its own rules, laws and mores and also affect the other directly or indirectly (Jansson ibid).
The theory also posits that new firms or multinational companies (MNCs) do not only struggle to adapt to institutions in a new industry or new country, they also grapple with legitimacy issues (Aldrich & Fiol 1994). Legitimacy gaining –observes Kostova and Zaheer (1999) - is a two-way street: an interaction between a firm and its environmental actors where the firm convinces society of the benefits of its activities and society also approves of the firms operations. Jansson (ibid) argues that the heterogeneity of society with each unit having its own norms, values and rules make them to perceive legitimacy differently. Albeit, he together with Aldrich and Fiol (ibid) delineate four types of legitimacy that new firms or MNCs must overcome: cognitive legitimacy, sociopolitical legitimacy, technical legitimacy, and regulative (including procedural) legitimacy.

3. ANALYSIS OF HYUNDAI MOTOR COMPANY’S INTERNATIONALISATION

This chapter gives a detailed analysis of the internationalization process of HMC using the theories where applicable. The assumptions and concepts underlying these theories will be tested whether they fit a particular context or there is deviation.

3.1 The Uppsala Model and HMC

A critical study of HMC’s internationalization can be divided into four stages: export through sales agents from 1983 to 1990; expansion through sales offices from 1990 to 1994; the beginning of overseas production through Knock down (KD) assembly from 1995 to 1998 and the beginning of relocation of complete production systems overseas from 1999 to 2001 (Hyun 1995, Kim & Lee 2001, Lansbury et al. 2006). A cursory observation of this periods seem to offer credence to the ‘stages approach’ put forward by Johanson and Vahlne, ( 1977, 2002) However, a critical dissection of HMC’s internationalization depicts a deviation from this proposition. First, the increase in exports took place almost simultaneously with initial mass production. For instance, HMC produced the Pony in 1975 and export followed the following year to Ecuador; Canada and US in 1984 and 1986 respectively (HMC, 2013). The question that needs to be answered is: was these increase in export activities be attributed to substantial knowledge advantage that HMC had in those markets or other factor (s)? The later seem to be the possible situation because HMC had no prior experience in these markets. The rapid increase in investments to expand production might have created excess capacity and the only means to offset this problem was to seek foreign market.
Second, HMC’s entry into in North American and European markets at the outset of its operations also defies the ‘psychic distance’ argument of the learning model. HMC, coming from an Asian country do not share any cultural or institutional proximity with North America and Europe yet it achieved substantial success in these markets. What might have accounted for this? Was this entry a calculated one or due to serendipity? The entry was a well-planned strategy to capitalize on the combined large market size North America and Europe to ensure rapid growth in exports ; to shorten the process of gaining secured market shares in international markets and the time to gain international recognition (Lansbury et al. ibid). However, HMC’s failed attempt to establish a greenfield plant in Canada during its early development stage supports the learning model. Wright, Suh and Leggett (2009) point to inadequate knowledge of the automobile market in North America as immense contributory factor. For example, the Sonata was designed for the North American market but it was not customized to suit local conditions and customers’ expectations. A priori, this reason strongly vindicates the experiential knowledge proposition of the Scandinavia school.

3.2 Was HMC a Born Global?

The early stage of HMC’s internationalization mimics the characteristics of born globals postulated in the international new ventures theory. The European Union (EU 2012:11) definition of born globals as:
“…enterprises that, mainly within their first five years (to a maximum of 10 years), start intensive international activities. This is not only expressed by their exports accounting for at least a 25% share in total sales, but also by activities in more than one foreign country. Moreover, they generally have, from the outset, a plan for engaging in intensive international activities, which implies a good level of strategic thinking and willingness to take risks”
This clearly describes HMC’s early international activities. HMC’s instant forays into the export market can be attributed to the global vision and mindset of its founder right from inception. It is believed that Chung’s obsession with entering international markets led him to enter into strategic alliances with Ford and Mitsubishi and it was his “willingness to take risks” that pushed HMC to enter the North American market. A person who worked with him from 1985 to 1996 is quoted to have said of him:
“… It was impossible to present different opinions from Chung’s. Anyone who raised questions against Chung’s decisions should have been prepared to be fired the next day. … I would even say that Hyundai’s entry to U.S. market was led by Chairman Chung’s personal ambition. I agree that without Chung’s strong drive, Hyundai’s entry to U.S. could be delayed until its technology is comparable to the Japanese or European automakers.”

Again, Hyundai’s international business was a result of market-seeking strategy to avoid the small local market which was getting matured with intense competition (Lansbury et al. 2006). The intense effort that HMC put in its export drive buttresses this argument. For instance, Hyundai exported a total of 560,169 units, up 13% from the 1995 figure of 494,479. Regional sales for the year 1996 were 133,009 units in North America, occupying 24% of all exported vehicles; 178,328 units in Europe with 32%; and the rest of the regions occupying 44% with 248,832 units. (HMC, 1996: 567─568.)
Also, the networks (which Lorange 2002 posits is a prerequisite for born globals) and alliances that HMC developed in its early stages made them to spread their reach in the early periods. It is imperative to ask: was this a subtle strategic thinking to acquire some unique technology and advantages from these associations? HMC went into those alliances with the primary motive of acquiring some unique technology to operate internationally. (Lansbury et. al 2007: 23.) It can be seen from the arguments which have been adduced that HMC was indeed a born global right from its birth.

3.3 HMC and the Ownership, Locational and Internalization Advantages

HMC’s transition from local production to international production in multiple locations lends itself to critical inquiry. It recovered from its initial greenfield fiasco in Canada, to set up successful overseas production subsidiaries. There are a number of questions that need to be answered to clarify the apparent success after the initial setback. One, what advantages did HMC acquired that is drove them to invest in international production? Two, was the company guided by the awareness of these advantages before deciding on a location? And three, did they critically analyzed the implications that these advantages would have on their foreign productions?
Before establishing its first fully-owned subsidiary plant in India, HMC was strategically developing its production technology through vigorous R&D in Korea as well as Europe; building its brand image in North America, Europe and other western countries to gain legitimacy (Wright et. al ibid ). It is instructive to note that, HMC possessed some assets (both tangible and intangible) which they were going to exploit in their foreign operations. For example, when it entered India in 1996, HMC invested capital in excess of US$450 million to construct a fully- integrated plant with an annual capacity of 120,000 units. It also had in addition a burgeoning image as the producer of low-priced quality automobiles (Lansbury et al. 2007: 74─75).
It seemed that HMC strategically selected their overseas production locations based on careful evaluation of the advantages they could capitalized on. For instance, a government friendly to foreign investment and strategic export base between Asia and Europe (Ha & Cha, 2002; Yoon, 2002), were some of the reasons cited for its entry into India. Turkey’s entry was also based on its bilateral treaties with its neighbors in the Middle East and preferential tariffs applied to Turkish exports to these countries (HMC 1992: 774). A bigger market size and a low cost and abundant labor force (Motors Line, 2003:18) were given as the motivation to locate in Beijing, China. It appears Hyundai critically analyzed various locations in a foreign country before they finally settle on the one with superior advantages.
One peculiar feature about HMC’s international market entry mode is that, unlike its competitors who normally enter into joint ventures and strategic alliances in foreign markets, it chooses to operate its own subsidiary where the law permits. For instance, out of the seven plants operated by HMC, only two- Turkey and China- are joint venture operations (HMC, 2011). One would be tempted to ask why HMC do not want to capitalize on the advantages of strategic partnerships. A priori, it can be inferred that the bitter experiences it got with the failed Ford and Chrysler alliances have made them decide to go solo. Also, HMC have spent enormous amount of resources to change the perception of poor quality manufacturer (especially from the Excel debacle in the US) that consumers have of them and they would not want to give any license to an independent manufacturer it cannot control its production to produce an inferior automobile to further damage its image in the marketplace.
From the foregoing, it is clear that HMC’s international production followed the ownership, locational and internalization characteristics that the eclectic paradigm proposes.

3.4 HMC and the Resource Based View (RBV)

HMC’s internationalization reveals some interesting challenges about the resource based view (RBV). An in-depth scrutiny of the early stage internationalization through exports defers from Kogut & Zander’s (1993) view of local knowledge acquisition and transfer to foreign markets operations. The increase in exports took place at the same time of rapid expansion in local sales. These exports were not as a result of a tacit strategy to internationalize due to the possession of some competitive advantage but a hasty survival instinct decision to shed the excess domestic capacity in other not to collapse the nascent industry. (Lansbury et al., 2007: 37─38.) This aggressive drive to increase international market share explains the argument that HMC internationalized before developing significant firm-specific competitive advantages. For instance, the number of defects during the first 90 days among 100 new vehicles (which can be used as a yardstick to assess quality) new cars in sold in the US market in the early 1990s indicates Hyundai cars were almost as twice defective (200) as against the national average of 128 defects (Moon, 1995:96). This shows that HMC did not have any competitive advantages during its early stages of internationalization.
On the flip side, it can also be seen that the second phase of HMC’s internationalization through production agrees with a lot of the propositions of the RBV theorists. HMC did a lot of radical changes to its domestic operations before setting up its first overseas operation. What might have accounted for this? How did HMC develop its firm-specific competitive advantages from its initial lack of these advantages? Did transfer of knowledge determined HMC’s entry mode strategies? Is there a forward and backward knowledge sharing between HMC and its subsidiaries?
The international exposure of HMC assisted it to accumulate and develop its competitive advantages. The competition in the North American market which exposed the quality challenges of Hyundai cars made HMC to rethink its strategy of competing on low price to focus on product quality improvements. HMC executives realized that if they can become a world automobile giant like their Asian counterparts Toyota, they needed to develop their competencies on quality manufacturing. (HMC 1992:442─446.) As a result, HMC did a couple of strategic moves.
One, HMC entered into a technical cooperation agreement with Mitsubishi to develop their engine system and also benefit from the technological transfers (Lansbury & Woo 2002).
Two, new technologies like the Computer Aided Design and Manufacturing was developed, ‘scientific’ management of mass production and computerized parts supply was introduced thereby reducing design man hours. (HMC 1992:452─537.) Also, Human resources management was enhanced. New engineers and technicians were brought from Japan to man positions which had skills gap in Korea and HMC’s Korean employees were also taken to Japan to be trained in technical and managerial skills. (HMC 1992:372─518.)
Three, HMC introduced the Japanese- style quality management techniques like quality control system, a job suggestion system and an occupational invention system with financial rewards. Again, it elevated its Quality Control Section to Quality Control Division with 670 units and by 1987, it had increased to 1,700. (HMC 1992:728─729.)
Four, Hyundai invested heavily in automation, mechanization and industrial robotics in its production to improve its production management in order to better integrate work processes into increasingly mechanized, technologically sophisticated mass production systems (Lansbury et al. 2007:59─61).
Five, HMC increased its R&D efforts with the setting up of its first research facility in the Ulsan plant and followed it up an 870- acre ultra-modern research estate in Namyang to back its production (Winbush, 2011).
The transfer of knowledge and the internalization, quality production capabilities that HMC has acquired through its long years of learning might have influenced the choosing of a wholly-owned subsidiary vehicle as its entry into India (Kogut & Zander, 1993). In setting up Hyundai Motors India (HMI) operations, HMC transfer of over seventy expatriate managers and engineers some with over 15 years of production experience to supervise the construction and production. Also, the Office of Overseas Production Technologies codification of HMC prior experience in overseas production ensured it maintained control and efficiency at the plant while adapting car models and production system to fit local conditions. Again, the appointment of Koreans as the top management of the HMI operations reinforces deliberate transfer of tacit knowledge. The HMC’s American subsidiary’s contribution to the organization’s stock of tacit knowledge and dynamic capabilities (Tecce et al. 1997) depicts that knowledge does not only flow from the headquarters but through subsidiary initiative and capability, knowledge can be transmitted back to headquarters and across to other subsidiaries (Peng 2001). The North America R&D, and The Hyundai Motors Manufacturing America (HMMA) subsidiaries for instance ensured a flow of innovation and technological know-how to the creation of HMC’s integrated global production system (Wright et al. ibid).

3.5 HMC’s Strategies toward Institutions in India

The success of HMC has been attributed to how it has been able to gain legitimacy and managed it relationships with existing institutions in the countries it operates in (Jo & You, 2011). It adopted different strategies ranging from adaption to local conditions or imposition of company standardized procedures to suit a particular context. The case of HMI and is used to explain these strategies.
Following rules and regulations of the existing governmental institution at the federal and state levels leads to the gaining of regulative legitimacy as well as following the procedures of administrative bodies. Most of these regulations have been abolished at the central level due to the adoption of the trade liberalization policy in 1990s. HMI’s strategy towards regulative legitimacy has been acquiescence and compliance. For example, when the government imposed huge tariffs on the importation of parts, it shifted it policy to indigenization or local production or supply of parts. This change in policy resulted in the increase of local parts supply from 20 percent in 1998 to 65 percent as at 2000 (Lansbury et al 2003).
Jansson (2002) attributes the success or failure of a company in foreign country its management social and technical legitimacy in its organizational fields. HMI gained technical legitimacy (how various stakeholders evaluate the efficiency of a company’s commercial and technical activities) quickly on the highly competitive India market even though it was a late entrant. It adopted quality standardization and design localization, environmentally conscious manufacturing coupled with low-priced positioning strategy. For example, The Santro became instant hit when it was introduced because it was roomy, well ventilated and robust and fuel efficient, and also competitively priced. (Lansbury et al. 2007:75, Thimmaiah 2012.)
Social legitimacy- which is the way an MNC adapts to the sociocultural values, norms, behavior and rules in the society it operates- was achieved by the HMI through a number of ways and they are discussed below.
Even though HMI’s construction and production was dominated by highly competent and experienced expatriate managers and engineers, it employed a lot of local workers and continuously ceded a lot of management authority to Indian managers. (Lansbury et al. 2007:91). The localization of HMI management practices enhanced the status and role of the local managers and this helped to stabilize the internal labor market.
The Indian laws allowed for the formation of trade unions at various workplaces, the militancy of the Trade Union and its association of the leftist party coupled with the fragmentation of its front (Woon & O’Donnell, 2002) ensured that the government was not motivated to enforce the laws. With its experiences of antagonistic unions in Korea, HMI capitalized on government’s inaction to avoid the formation of trade unions. Instead, it established Workers Committee to address workers grievances.
HMI localized its wage policy to suit the prevailing living conditions in India. In the absence of collective bargaining agreements, workers were paid a basic salary and various allowances ranging from cost of living allowance, housing or rent allowance and flexible allowance. HMI’s remuneration package was higher than that of the local automobile manufacturers and also slightly above that of the MNCs (HMI, 1999-2000). This strategy was geared towards retention of high skilled workforce and the avoidance of industrial conflict internally while gaining legitimacy form the government, civil society and the general public.
HMI embarked on a lot of welfare programs and corporate social responsibility projects to deepen its social legitimacy among the dependents of its workers, in the communities it operate and the whole country. During 2000, for example, over 4000 family members of HMI employees were invited to partake in factory tours and other family bonding activities. Also, management introduced loan system for to cover marriage cost. Recreational facilities were also provided for workers and their dependents. Again, HMI consistently increased the hiring of people from communities it operated in and offered support for numerous community-initiated projects like clinics, schools, playgrounds, libraries. It provided school furniture, drilled bore holes (HMI, 1999-2000). All these activities contributed to an enhanced corporate image of HMI.