case study
Professor K. Ravi Kumar and Research Fellow Divya Bhutiani prepared this case based on interviews with LG Display. This case is intended for class discussion and learning, and not intended as source of research material or as illustration of effective or ineffective management. We wish to thank Padmakumar Nair and Malia Tumacder for their invaluable inputs in writing this case. COPYRIGHT © 2017 Nanyang Technological University, Singapore. All rights reserved. No part of this publication may be copied, stored, transmitted, altered, reproduced or distributed in any form or medium whatsoever without the written consent of Nanyang Technological University. The Asian Business Case Centre, Nanyang Business School, Nanyang Technological University, Nanyang Avenue, Singapore 639798. Phone: +65-6790-4864/6552, E-mail: asiacasecentre@ntu.edu.sg
LG DISPLAY WROCLAW: CREATING A WORKPLACE OF JOY
K. Ravi Kumar and Divya Bhutiani In January 2009, Ji-Hyung Kim, LG Display’s (LGD) Country Director of Poland was developing a new operations strategy for the factory that had opened four years ago. The factory in Wroclaw, Poland was essential to the company’s Eastern European operations, making the plant a gate-of-entry and control centre for the emerging markets of the region. The emphasis was of high importance and was made known to all plant employees, and the management at LGD’s headquarters was looking forward to having operational efficiency and healthy financial statements at the end of the year. To enable this, the company had been giving Kim and the local managers a hand in reinforcing and supporting their activities. Kim, who was sure of this support, relied on his professional background and human management skills to make the plant in Poland a swiftly organised and managed factory that had short lead times, lowered costs and better manufacturing capabilities. Being nearly 5,000 miles away and eight hours behind the company headquarters in Seoul, Korea, Kim expected to face some cultural and geographical challenges for the Polish operation. He was also concerned with the timing of business meetings with headquarters and the long flights employees had to take if face-to-face business meetings were necessary for certain important internal decisions, such as many new product development processes. Other than that, he was convinced that the cultural differences would be negligible since tasks were purely operational and did not require much local adaptation. As he was given full responsibility and control in forming his local team, he decided to manage the local talent in the traditional Korean way. But shortly after its early development stage, LGD Wroclaw began to suffer from a high turnover rate of local employees. Local talent, which joined the company on the promise of working for a global manufacturer of state-of-the-art products, became unhappy for various factors. The sum of these factors had not only increased costs of talent acquisition but also lowered efficiencies and manufacturing capabilities. Kim and his team needed to know what was causing such conflicts and believed immediate action must be taken to improve the welfare of the company and its employees. What were the underlying causes of the high turnover rate and how could they make improvements? Was the working environment harsh or were headquarters managers treating the local employees in a wrong manner? Although the motto of LGD Wroclaw was to make the company a joyful place to work, the company was nowhere near being a “joyful company” that it had expected to be. The company was losing its reputation in the local market and a solution had to be found to create a beneficial environment for the global management and the local employees.
HBSP No.: NTU137 Ref No.: ABCC-2017-018 Date: 12 May 2017
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Kim’s target was to raise the general employee competency level by 85% within the next nine months. Although the time was short, Kim believed that this would be a reasonable goal considering the fact that he had full-fledged support from the company headquarters. Kim wondered if the suggestions to increase employee engagement at the Wroclaw plant will be able to produce quick results to save “face” or dignity in front of his headquarters. THE COMPANY LGD was the world’s largest manufacturer of liquid crystal display (LCD) panels with revenues of KRW 16.27 trillion (USD 14.66 billion) and operating income of KRW 1.2 trillion (USD 1.1 billion). The company originally began as part of a South Korean company called Geumsung (later called LG Electronics) in 1987, developing software products and thin film transistor liquid crystal displays (TFT-LCD) in the central R&D centre. By 1993, the company officially launched their LCD business and within two years that they developed their first LCD plant in Gumi, a small town in South Korea. The same year the company released its first 9.5” TFT-LCDs, and by 1998, the company began mass production at their second LCD plant in Gumi. In 1999, the company spun off its LCD business from Geumsung and formed a joint venture with the Dutch company Koninklijke Philips Electronics to create a company called LG Philips LCD. It manufactured active matrix liquid crystal displays in the company’s third LCD plant in Gumi. The company made breakthrough innovations in the LCD industry by developing the world’s first 20.1” TFT-LCD for TVs in 2000, the first 52” TFT-LCD for high-definition televisions (HDTV) in 2002, the first 55” TFT-LCD by 2003 and the first 100” LCD panel in 2006. Within those years, the company opened module-assembly plants in Nanjing and Guangzhou in China, and in Wroclaw in Poland, operating a total of 11 manufacturing plants altogether. On 12 December 2008, LG Philips LCD announced its plan to change its corporate name to LG Display as Philips decided to sell all of its shares. The company claimed the name change reflected the company’s business scope expansion and business model diversification, the change in corporate governance following the reduction of Philips’ equity stake and LG’s commitment to enhanced responsible management. The removal of the Philips name from the company required LG to revitalise and redefine its brand equity, and its vision and mission statements. LGD decided to base their campaigns on bringing dreams to life. (See Exhibit 1 for LGD’s mission and vision.) The change also acted as a powerful equity in reinforcing the LGD brand image in the marketplace and leveraging the brand name fully in the LCD display market where competition was fierce. The high brand recognition not only established a platform of trust but also enabled good talent acquisition. (See Exhibit 2 for a timeline of LGD’s major events.) THE LAUNCH OF LGD WROCLAW, POLAND On 6 September 2005, LGD announced that it would open a TFT-LCD module plant in Wroclaw, a small city in southern Poland approximately 340 km away from Warsaw. This was not only a big step for LGD but also a major investment for Poland and the Polish workforce. The news of this travelled fast across the country, creating a buzz of enthusiasm among potential employees. Despite the size of the European market, no global brand had ever set up a manufacturing plant in the area before. This was the first time a global manufacturer commenced its production in Europe. Nearly two years after the initial announcement, operations began with an initial capacity of three million modules per year, and the company had an optimistic outlook for the future. The Polish plant was important for LGD because it offered a demographic advantage and significant cutbacks in distribution costs. It was home to 22 institutes of higher education that had good international
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reputation and graduated more than 22,000 students every year. Furthermore, the geographical adjacency to target markets gave LGD a head start compared with the main competitors. The company had positive return on investment expectations from the plant and they also underlined a plan to further enhance and develop the plant’s capacity to a total of 11 million modules by 2011, which accounted for an extra investment of EUR 429 million. The importance of the plant was also seen in the range of products to be manufactured. The company claimed to allocate the capacity of the local plant to the production of large and wide LCD TV modules, such as 26”, 32”, 37” and 42”, as well as 19” and above for computer monitors. Mr. Duke Koo, the Executive Vice-President of worldwide sales at LGD claimed,
Our plan to build a TFT-LCD module plant in Poland is part of our strategy to lead the fast-growing European LCD TV market as well as supporting our customers via the timely supply of products and swift technical support, both of which will be facilitated by establishing a production base nearer to our customers. This move is in line with the ongoing trend of major TV set manufacturers setting up production plants in Central & Eastern Europe.1
LGD had consistently pursued a strategy of optimising its global manufacturing processes and its plan to build a TFT-LCD module factory in Poland was in line with this goal. Central and Eastern Europe provided a favourable environment for LGD to build lasting strategic partnerships with its customers. The company predicted several benefits from the Wroclaw plant, including the high-quality labour available in Poland and the high level of support from the Polish government. Wroclaw, the nation’s educational and economic centre, was well known to also have a well-established infrastructure, including efficient road networks and excellent power supply. The support from the government gave the company room to breathe and established a platform of mutual benefits. LGD decided to return the favour of the local government by creating an affluent work environment and contributing to a positive workplace that gave the local workforce the opportunity to work for a global manufacturer. (See Exhibit 3 for the timeline of LGD Wroclaw.) ISSUES AT LGD WROCLAW The LGD factory in Poland was meant to be a melting pot of the know-how of the global headquarters and the diligence of the local talent. The intention was to create a significant location in Eastern Europe with distribution and manufacturing advantages over the competition. However, the company’s Polish factory did not operate as successfully as they had hoped. At an early stage, LGD Wroclaw had an employee turnover rate of around 10%, which was twice of Poland’s industrial average of 5%. The turnover rate was especially important in emerging markets with tech-manufacturing capabilities because of the time lost in educating new employees about many of the complicated operational management techniques, such as just-in-time production, kanban and lean manufacturing. These types of training activities were implemented to create high levels of factory utilisation, shorter lead times to meet demands of the global management and a better learning curve. But the high turnover rate was creating an additional cost burden on the company. Furthermore, the overall production operating rate was very low, and the defect ratio and return defect ratio of the plant was high in comparison to other plants. Employees were losing motivation to work at LGD Poland due to the lack of mutual trust between the company and its employees, leading to low levels of employee satisfaction. Low levels of motivation accounted for the main reason behind the high turnover rate, and many new employees were also affected by the negative comments of the unsatisfied employees who were leaving. Employees leaving the company claimed that the main reasons for leaving were difficulties in communicating with the Korean managers. They further claimed that the lack of successful
1 EE Times (2005, July 9). LG.Philips LCD to build TFT-LCD module plant in Wroclaw, Poland. EE Times website.
Retrieved from http://www.eetimes.com/document.asp?doc_id=1297405
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communication actually enhanced the cultural gap between the two parties, resulting in more complications at work. To them, the Korean managers showed little or no effort in trying to establish rapport or sympathy with them, seemed to show no respect to the local standards of the Polish culture and continued to ignore comments made by their local employees. This not only fuelled arguments and disagreements but also fostered lack of enthusiasm and engagement. During their exit interviews, the local employees while sharing their reasons to quit remarked:
Manager Hong would come to work on a Friday and tell our team that we will be having an overnight workshop on Saturday and Sunday to foster team bonding and “brotherhood”. I was told Korean people were all about building friendships and strong relationships within the workplace, but I see these people all day during weekdays. I would like to spend some quality time with my family for at least two days a week instead of meeting my co-workers that I don’t really click with, on my precious weekends!
I could not understand why people stay here overtime when our shift is in fact over and there is no more work to do. Manager Kim apparently stays in the office until late at night, but him staying overtime gives me no reason to do the same. Yet it’s funny how people give me the strange look every time I leave the office at 6pm. It seems as if they are trying to make me feel guilty about leaving the office on time. I don’t feel the least bit guilty, but I definitely don’t feel too comfortable.
As a result of the information gathered from exit interviews and several other sources, LGD Wroclaw decided to conduct an internal survey to understand more about the cultural misunderstandings that local and expat employees were facing in September 2008. The management hoped the study would help in finding the reasons of the dispute and point them in the right direction in establishing solutions to create positive results. Director Kim also decided to organise a taskforce consisting of both Polish and Korean employees to provide solutions to these issues. He believed that by doing so he would be able to achieve two main objectives: firstly, identify and solve the current problems and secondly, create a platform where employees from different cultural backgrounds would establish rapport and get to understand each other’s perspective on business. CHANGE MANAGEMENT Kim and the taskforce agreed upon a new set of goals to be achieved by the end of December 2009. The CEO had given the following orders to Kim:
The managers of LGD Wroclaw should be attentive listeners and considerate of the culture of their local employees. We should develop a stimulating company culture where everybody would be excited to go to work in the morning.
The ultimate goal of LGD Wroclaw was to create an atmosphere of a “joyful workplace” where employees felt they had ownership of their work and were loyal to the company. This new project and goal assessment was thought to lower the employee turnover rate. The new target turnover rate was 5%, which was half of what they were having. An employee satisfaction survey was conducted for LGD Wroclaw employees to rate their experience working in the company. The survey included many different questions with the goal of coming up with a fair evaluation of employee satisfaction. On a scale of 1–5, with 1 being the least satisfied and 5 being the most satisfied, the average score for the general employee competency level was 3.4. The taskforce set this score as the baseline and decided to implement changes that considered a goal of a decent increase to foster productivity. The company wanted
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to raise this score for the general employee competency level to 85% and to increase the production- operating rate to 94%. Two employee key performance indicators (KPIs) were selected: (1) to increase motivation by improving job skills, enhancing employee welfare and further promoting communication between the managers and employees; and (2) to increase job satisfaction by making a pleasant atmosphere, changing the internal culture and thus improving the perspectives of their employees. The company defined each point independently but stressed that both points were complementary and supported each other to create a chain of improved production. The company expected to have an increase in both KPIs and they also expected that the synergistic effect would exceed the sum of its parts to create a more positive impact on the turnover rate, thus improving the manufacturing efficiency. Kim was also concerned with other performances and linking scores. He was convinced that micro- management of every problem was needed in order to create synchronisation within the overall effort. More specifically, LGD Wroclaw wanted to raise all the sub-key performance indexes of company performance, satisfaction and mutual trust up to 4.0 points out of 5.0. (See Exhibit 4 for the current and target KPI levels of the company.) The main trigger for Kim to achieve this change in culture and management was more personal than work- related. Although it was important for him to save the plant, it was more important to preserve his reputation and future prospects in the company. It was very important in the Korean culture to save “face” amongst peers. If he could not improve the current situation of the Polish plant, he would continuously be negatively evaluated by other country directors of different LGD plants. It would be shameful for Kim that his plant had a low-performance rating, which would be detrimental to his career growth. Kim was in his last year of being a director and successfully managing the Polish plant would enable him to be the chief executive officer and even to head future plants in Europe. With his personal welfare and the success of the company at stake, Kim was motivated to spend much of his time and effort on this project and wished to see tangible improvements in the near future. Employee Engagement Looking at the poor employee satisfaction survey results and the comments from the employees in their exit interviews, Kim knew that LGD Wroclaw was definitely not considered a joyful workplace by his employees who were still with the company. He decided to look at the engagement level of his existing employees using the Gallup’s 12-item employee engagement survey, the Q12. High employee engagement had been linked to low turnover rate, high satisfaction and high employee performance, all which was on the agenda for Kim for the Wroclaw plant. As expected, the results of the Q12 survey were alarming and Kim decided to actively participate in the efforts to create a joyful company and raise the engagement levels of his employees. Along with the human resource (HR) department of his company, Kim started brainstorming for activities which would create an overall rapport among peers; establish trust and pride; bring individuals to a mutual standpoint, complement and enhance individual capabilities via specialised training; and also bring fun and joy into the workplace. He knew that the task ahead required more specific thinking and decided to go with four activities: 1. Training programmes that enhanced personal capabilities and delegated more responsibility to
employees to foster the feeling of earned responsibility. 2. Increased communications among peers and team members by creating transparency within the firm so
that business decisions were transferred efficiently through the different ranks. 3. Great WorkPlace (GWP) activities that had the goal of bringing local and Korean employees together,
establishing a bridge for cultural interaction and dialogue among different teams within the plant. 4. Sports activities based on constructive competition to foster friendship and teamwork.
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The sole aim of all these activities was to enhance employee engagement levels in the company so that employees thought beyond their self-interests and cultural differences. Training Programmes The first option of developing training activities to enhance corporate performance and foster positive perceptions seemed to make the most sense to Kim. The President of LGD Wroclaw had claimed, “To offer customer satisfaction with #1 quality and productivity, we need to have qualified employees.” Kim thought that additional education and a change in the way of thinking would be ideal to achieve this aim. He also believed that the classroom atmosphere would remove barriers between the two cultures and establish an environment for learning and interaction. Within the training activities, one of the possible suggestions was to develop a “Lean School”, where employees could learn about ways to detect and eliminate waste while offering competent products to maximise customer value. Kim knew that lean manufacturing had been around for a long time for Asian manufacturers, but it was new to Europe. He believed that local employees would react very positively towards these practices and implement this in their workplace activities with strong motivation. According to the employee satisfaction survey, there seemed to be a strong need for lean education. Some of the employee comments included:
We don’t know how to work smart.
MS Office training is needed for us to analyse data, and we need additional job-related training as well.
Local employees were aware of the shortcomings in the system and were also motivated to improve with the help of the management. Kim thought that this was the most important way of reaching down the ranks and establishing a constructive and profitable interaction. Taking these factors into consideration, Kim thought that the school should comprise a total of eight sessions focusing on the 5S Visual Management and Lean Manufacturing. If necessary, seven extra sessions of problem-solving courses may also be added to help employees identify, define and resolve issues at work, and to educate them on how to create and present reports. He believed that this education plan would create a win-win situation for employees and the company by increasing their engagement at work. Another major problem was the lack of communication within the two groups of employees. This not only blocked the transfer of business knowledge but also created and increased dissatisfaction and distrust between co-workers. Kim understood that the lack of communication started a chain of ambiguity that led to strong feelings of dislike among the two groups. Kim decided to develop leadership courses for both local managers and expats. There were many instances when employees of different cultures had experienced conflicts while giving feedback to their subordinates, and Kim believed that leadership training would definitely help to resolve that tension and raise employee motivation within the plant. These courses would not only help managers in giving feedback to their subordinates, but they would also help employees to communicate effectively with their seniors on a regular basis. Within the curriculum, sessions involved attentive listening, developing team relationships and personal development. The training would include theoretical teaching and roleplaying of potential workplace scenarios. Both the audience and the actors involved in the roleplays would evaluate the situation and establish common grounds on the subject. Lastly, the company could offer “Joyful Lectures” where all members of LGD Wroclaw would attend courses related to improving soft skills and enhancing their ability to interact effectively with co-workers and customers. Soft skills were essential human interaction capabilities targeted to the well-being of the individuals. Unlike the other training sessions, these lectures were less theoretically and involved exercises related to peer-to-peer interaction and communication. The lectures would have an informal classroom
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atmosphere to facilitate and foster sharing among employees in a friendly and constructive environment. A few benefits of the proposed lectures were that employees would be able to listen to different points of views between Eastern and Western cultures, occasionally meeting famous business spokespersons and having extra time for discussions and self-studying. The purpose of these lectures was to equip the individuals with a basic understanding of the subject and allowed them to find ways to fully understand and appreciate it. This process would not only establish understanding about different perspectives but also foster creativity and innovation where employees would be challenged to come up with new solutions to existing situations. Increased Communication The second means of creating a joyful company was to foster transparency within the company and improve employees’ communication skills. Lack of communication emerged as one of the main reasons of employee dissatisfaction and it had to be addressed immediately. There was no sense of mutual trust between the LGD Wroclaw management and its employees, and many have complained that they have lost motivation due to the lack of information sharing within the company, sometimes even within their own team. This fact made employees question their managers’ motives. Some thought that the managers personally disliked them, that they were not trusted with information or that they were seen as incapable of completing tasks or orders from upper management. The lack of communication created an information deficit which became a major issue that decreased workplace motivation. The associated ambiguity led to many misunderstandings as employees had to assume things instead of being fully informed. The main underlying issue was that managers were unaware of how to share information with employees other than through formal letters. The HR department was in search for a new method of information sharing since production employees did not have access to the company’s Intranet. Furthermore, it took a long time to provide information to all four shift members on a timely basis. To try to improve communications, LGD Wroclaw had made efforts to hang banners on walls to promote a cheerful atmosphere, but people rarely paid attention to the banners. The banners were ineffective in enhancing productivity and production. Many voiced their dissatisfaction and unhappiness with the company as they were merely enduring their work. As one Polish employee remarked, “there is absolutely no motivation to be happy about working at LGD.” While thinking about the current problems at the Polish plant, Kim understood that a lot had to be changed to improve employee morale and motivation. To boost the morale of his employees, he would have to teach his managers on how to communicate effectively and he would also sponsor outdoor activities and gatherings for the entire team. One solution that he thought would be good was to hold a monthly or quarterly meeting for all employees to watch “morale movies” that shared information about upcoming events, activities and other corporate-related news. This would be an innovative and interesting way to increase employee consciousness and develop their comprehension of upcoming local events and company targets. Kim also noticed that even though the employees were getting their hands on the most crucial parts of the products during the manufacturing phase, they had little or no knowledge on the finished product line of the company. In other words, the employees only knew about the parts they were responsible for, but were unaware of the rest of the processes and the finished products. Since the employees were only performing routine tasks in the plant, it hindered their capability to feel a sense of belonging to the company and of ownership towards their jobs. Kim knew that showing employees the final results would be very motivating so he decided that he would show them the outcome of their efforts visually. To better inform employees about the company’s products and technology, Kim believed that it was essential to create an internal showroom where all of LGD’s products would be displayed. On some of the product panels, the same morale movies or other corporate advertisements could be aired throughout the office premises to keep the employees entertained in between meetings or during breaks. These movies would act as an additional motivating factor to keep
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employees up-to-date and help improve their negative perspectives towards the firm. Furthermore, seeing the products on a daily basis would remind employees on how much they were contributing to the company. This would establish a sense of pride, resulting in higher motivation levels. Another option to enhance corporate communication was to install digital information stands in every corner of the plant. Despite LGD being a manufacturer of display screens, managers had never thought of utilising their own products as tools to share information within the company. Kim thought of developing touch screen panels that would distribute information within teams and act as a tool for sharing clustered data. Apart from playing corporate announcements, Kim also wanted to explore the possibility of these information stands to be linked to the HR system that acted as a check-in/-out tool for employees. Although this would be expensive to implement, the stands would offer easy access to all important company information and employees would no longer complain about the delay or lack of information sharing within the company. Kim believed that the returns would far exceed the initial investment since the immediacy and sharing of information were not only important for personal morale and motivation, but were also key factors of the lead production process to enable the plant to increase operational efficiency. The ease of information sharing would also motivate managers to send out frequent updates on important topics and processes regarding orders and leads. Kim believed that the screens would be a sweet spot for managers to merge formal letters and face-to-face interactions, and this would remove the barriers of communication. Kim thought of converting the company shuttle buses into “Talking Buses” where announcements would be made to employees during their ride to and from work. LGD Wroclaw had offered multiple shuttle buses for their employees to commute to work conveniently. Talking buses could be an economical and efficient way of sharing information since no extra time would be taken away from employees during their shifts. If this were to be implemented, announcements would be recorded on CDs and handed over to bus drivers on a weekly basis. The CDs would be played during the last six minutes on their way to work, and the recordings would be of recent corporate news, events, HR issues, safety procedures and other work-related information. Kim believed that two factors were essential for the success of this method. Firstly, the information announced must be succinct and straight to the point. He thought this was essential because long messages tended to be neglected. Secondly, the information must be relevant and not redundant in order to keep the employees engaged and motivated to listen. He also thought that a familiar or liked voice must be heard, so he thought of coming up with a poll for employees to choose their preferred narrator who would read the company news. Creating a Great WorkPlace (GWP) The third alternative was the GWP campaign where the company would provide entertaining and diversified activities to get their employees more involved in corporate activities in order to build teamwork. As of then, most employees were unwilling to participate in any extracurricular activities with their colleagues, and managers were seeing that there was a lack of teamwork and cooperation within teams. Many were complaining that the atmosphere of the company was too rigid and cold. They were seeing the off-business hours as a way to run away from the corporate culture. This was why they even dreaded the idea of having voluntary extracurricular activities outside the workplace. GWP activities were aimed at enabling people to build friendships outside of the workplace, allowing them to break their daily routine tasks and take a break from work. The success of this effort would mainly depend on the activities selected for this programme and Kim was convinced that mutual attraction points of both cultures must be understood and met. He also knew that a healthy competition among participating teams would fuel and trigger a sense of belonging among employees. Some of the events that HR had in mind were Joyful Planting, Canteen Making and Photo Contests. Joyful Planting would be a weekly event where employees would take an hour or two off from their work shifts to plant seeds of their choice with their team members at a nearby park. The Canteen Contest would be a one-time activity where employees would take half a day off from work to create and decorate a container for eating. Each team member would make one container and individuals would also have the chance to
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create one as their own souvenir. As for the Photo Contests, employees would be asked to take pictures of a particular theme (such as passion, love or travel) every two weeks and these photos would be showcased for others to vote every week. The three most voted photos would receive an award. All of these activities would be owned and managed by employees and would involve significant team building and communication efforts. The aim was to bring together employees who had similar hobbies and interests. Furthermore, the company thought of taking on a few other initiatives to raise the overall quality of life for their employees. They thought that the provision of a severance package would raise employee engagement and reduce turnover on the local average. They also believed that the benefits package would instil a sense of pride in being employed by LGD in both employees and their family members, thus also raising the company reputation. To do this, they thought of providing medical care to all LGD Wroclaw employees by creating a clinic within the company compound. There were a few instances in the past where employees had accidents while working, and the poor quality and inadequacy of public medical facilities hindered them from getting emergency treatment. LGD Wroclaw wanted to create its own medical clinic where operations will take place 24 hours a day with fully equipped ambulances ready for emergencies and all employees would have access to basic medical services easily. This would, however, be a huge investment for LGD Wroclaw as they would need extra capacity for another building and would need to hire specialists with medical degrees. The HR department also thought of constructing a “Green Path” within the LGD Wroclaw campus where rest spots and benches would be placed to create a more pleasant working environment. There were currently no sitting areas within the compound where employees could sit or take a walk during breaks. The lack of exposure to sunlight kept levels of motivation low and employees felt trapped in the workplace. Smokers were the ones who dominated the outdoor space and non-smokers generally stayed indoors to stay away from the smell. Therefore, many employees suggested a small park where people could walk around, have lunch outside and relax during their free time. If the Green Path were to be selected, several benches and tables would need to be installed along with other sheltered rest areas and the park would need to be decorated with flowers and trees. This seemed like a minor investment with a major impact on employee morale and it would also give employees some time away from all the noise and clutter of the manufacturing process. Another option was for the company to create fitness facilities for their employees. Managers knew that those who took care of their health were much more satisfied and happier than those who did not. The plant was not fully equipped with exercising equipment for employees to keep both their mind and body healthy and the only recreational activities available were ping pong tables. Employees had complained multiple times about not having a place to relieve their stress and keep their body in shape after work. Hence, the best idea was to have a semi-gym within the company for fitness, bodybuilding and weight loss. The facility would include multiple bench presses, rods, dumbbells, runway tracks, bicycles, treadmills and possible training sessions for individuals and small groups including yoga, pilates and zumba. The upside of this was that employees would not only care for themselves, but also become more socially adept in forming teams and exercising. Sports Activities Last but not least, LGD Wroclaw considered the option of constructing a variety of sports activities for their employees to enjoy after work. Both Polish and Korean employees had expressed their interest in playing sports with their team members and other employees within the company. Yet, there were not many places for them to enjoy physical activities within the compound. According to the employee satisfaction survey, more than 100 people claimed to be interested in playing sports after work, and some were already starting to develop informal sports groups within the company.
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Hence, the company thought of developing four different types of sports facilities/events for its employees: (1) multi-sports programme, (2) more ping pong and foosball tables, (3) soccer championships and (4) a Polish-Korean soccer game. The idea of multi-sports programme was similar to the proposed GWP gym but this facilitated a larger scope of services, ranging from fitness centres and yoga courses all the way to swimming pools and dance programmes. Both employees and their family members would be able to use the membership together. LGD Wroclaw already had a few ping pong tables installed, but many employees had requested for the compound to have several more tables to accommodate their strong interest in the game. The company could purchase a total of nine ping pong tables and three foosball tables, and install them in several locations in the plant such that these recreational services would be enroute towards the entrance and shuttle bus stations. Soccer championships were pre-existing sports activities participated by many different companies around the world, including LGD Wroclaw. Oftentimes, competitions were organised between multiple teams to build teamwork and friendship amongst different clusters. Further promoting these activities would enhance team spirit between employees of all departments at LGD Wroclaw. The Polish-Korean soccer game was similar to the soccer championships except that there would only be two teams playing against each other: one team consisting of Polish employees and the other being Korean. Employees thought that this would promote friendship just like the UEFA or FIFA games and would increase mutual trust. After the game, members could celebrate together by having a small barbeque party and socialise with their peers. CONCLUSION All of these options were considered as best practices that could contribute to higher employee engagement, lower turnover rates and higher work satisfaction within large corporations in Korea. As Kim was on a flight to a business meeting, he was concerned of the changes that could happen and the outcomes of those major transformations. He knew that immediate action had to be taken to bring his employees together as one united workforce of mutually satisfied individuals and efficiently functioning teams. While he was reading the HR report and the results of the employee satisfaction surveys, many thoughts came to mind. Would these activities be effective in making LGD Wroclaw a workplace of joy? Or will it cause further cultural disagreements between the local employees and the Korean expats? Should LGD Wroclaw engage in one of the four activities or should they implement parts of each segment? Kim had to implement changes quickly and reduce employee turnover rate before his next evaluation period as he surely needed to save “face” before his peers started pointing fingers at him. The decision of making that huge investment of time and money to transform the culture of LGD Wroclaw was something that Kim had to decide sooner rather than later.
For the exclusive use of D. Singh, 2020.
This document is authorized for use only by Dalbir Singh in UCW HRMT 621 Summer 2020 Final taught by DALTON GRADY, Simon Fraser University from Jul 2020 to Oct 2020.
Page 11 ABCC-2017-018
EXHIBIT 1
LGD MISSION AND VISION
Slogan
System
In the vision of LG Display that is “You Dream, We Display”,’ the word “You” indicates all our customers, partners, and members of LGD and “Display” means realisation of dreams transcending the concept of mere showing. In other words, it is “to create the world where people are dreaming with LG Display” as well as the expression of the strong determination that intends to provide advanced values based on competitiveness differentiated from other competitors. To accomplish such vision, “Global No.1 Display Company” was set as our detail goal while newly defining the six signature basic competences of LG Display. The core values and ideal qualities that the company requires in employees become the basis of corporate culture as well as the code of conduct to be equipped with all employees. Source: LG Display. (2014). Vision. LG Display website. Retrieved from http://www.lgdisplay.com/eng/company/vision
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This document is authorized for use only by Dalbir Singh in UCW HRMT 621 Summer 2020 Final taught by DALTON GRADY, Simon Fraser University from Jul 2020 to Oct 2020.
Page 12 ABCC-2017-018
EXHIBIT 2
TIMELINE OF LGD
LG Display January 1987 Began developing TFT-LCDs in the Central R&D Centre of Geumsung
September 1993 Built LCD Business Unit
September 1995 Started mass production of Gumi LCD Factory 1
Released its first 9.5” TFT-LCD screens
February 1998 Started mass production of Gumi LCD Factory 2
July 1999 Developed a joint venture with Koninklijke Philips Electronics, creating LG Philips LCD
July 2000 Developed the world’s first 20.1” TFT-LCD for TVs
October 2002 Developed the world’s first 42” TFT-LCD for HDTVs
November 2002 Ranked the world’s biggest manufacturer of large TFT-LCDs
December 2002 Developed the world’s first 52” TFT-LCD for HDTVs
May 2003 Started mass production of Nanjing Module Factory in China
October 2003 Developed the world’s first 55” TFT-LCD for HDTVs
December 2004 Started mass production of Nanjing Module Factory 2 in China
September 2005 Announced the plan to build the Wroclaw Module Factory in Poland
September 2006 Develops the world’s first 100” TFT-LCD for HDTVs
February 2007 Started mass production of Wroclaw Module Factory in Poland
December 2008 Philips sold all of its shares in the joint venture and LG Philips LCD became LG Display Source: LG Display. (2014). Milestones, Company. LG Display website. Retrieved from http://www.lgdisplay.com/eng/company/history
For the exclusive use of D. Singh, 2020.
This document is authorized for use only by Dalbir Singh in UCW HRMT 621 Summer 2020 Final taught by DALTON GRADY, Simon Fraser University from Jul 2020 to Oct 2020.
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EXHIBIT 3
TIMELINE OF LGD WROCLAW
LGD Wroclaw
September 2005 Foundation of LGD Wroclaw Investment agreement with Poland
March 2006 Construction of LGD Wroclaw Plant June 2006 Development of the first good LCD Module February 2007 Start of mass production May 2007 Opening ceremony January 2008 Establishment of LGD Poland DSC July 2008 Reaches production and sales quantity of 5 million units May 2009 Reaches production and sales quantity of 10 million units
Source: LG Display. (2014). Milestones, Company. LG Display website. Retrieved from http://www.lgdisplay.com/eng/company/history
EXHIBIT 4
LGD WROCLAW’S CURRENT AND TARGET KPI LEVELS
Source: Compiled and created by authors.
For the exclusive use of D. Singh, 2020.
This document is authorized for use only by Dalbir Singh in UCW HRMT 621 Summer 2020 Final taught by DALTON GRADY, Simon Fraser University from Jul 2020 to Oct 2020.