CENTRALIZATION AND DECENTRALIZATION OF GLOBAL KNOWLEDGE TRANSFER STRUCTURE

A COMPARATIVE STUDY ON TOYOTA AND HYUNDAI’S PRODUCTION SYSTEM TRANSFER

Abstract

This paper discusses the Japanese and Korean firm’s global knowledge transfer structure through a comparative study of Toyota and Hyundai. Toyota Production System (TPS) pursues productivity and flexibility in manufacturing, mainly depending on human resources. On the other hand, Hyundai production system also pursues productivity and flexibility; however, it depends less on human resources, but more on the role of capital. The knowledge transfer of Toyota is based upon humane transfer; on the contrary, the knowledge transfer of Hyundai is based upon codified knowledge and module part suppliers. The differences in knowledge transfer are linked in their knowledge transfer structure. In Toyota’s knowledge transfer, each domestic plant has an initiative, and other organizational units support it, which forms a decentralized structure. In Hyundai’s knowledge transfer, corporate headquarters has an initiative, which forms a centralized structure. Both centralized network and decentralized network have their own strengths and weaknesses.