1. Mahan Sepehrifar
Amir Hossein Semsarzadeh
Amin Dehdarian

2.  A model of organizational learning
 A model of crisis construction
Why Hyundai???
 Leader automaker on its own despite the global
shakeout
 Increasing production more tan tenfold every decade
 Largest automobile producer in a developing
country

3. 1. How to move from imitative ”learning by doing” to
innovative “learning by research”?
2. Difference between learning in catching-up process
in a developing country and a developed one?
3. Crisis construction is useful for OL?
4. Can these models be imitated?
5. Any implications?

5.  Source: Crossan (1995)

7.  Source: Daniel Kim (1993)

8.  Ability of a firm to recognize the value of
new, external information, assimilate it,
and apply it to commercial ends (Cohen
& Levinthal . 1990)

9. Absorptive
Capacity
R&D Spending
Technological
Opportunity
 Source: Cohen & Levinthal (1990)
Appropriability
Competitor
Interdependence

10. Own R&D
 Source: Cohen & Levinthal (1990)
Technical
Knowledge
Absorptive
Capacity
Spillovers of Competitors
Knowledge
Extraindustry Knowledge

12. Anderson’s ACT model Ryle’s classifications
Declarative knowledge
Knowing that sth.
“Exists”
Tacit
Procedural knowledge
Knowing “How” it
operates
Explicit

13. Tacit
knowledge
Socialization Externalization
Internalization Combination
Tacit
knowledge
Explicit
knowledge
Explicit
knowledge
To
From

16. Source: Nonaka (1994)

17.  Need to tacit & explicit knowledge
 Elevating the level of ACAP
 External or internal

19.  Pre-crisis era
 Agreement with Ford
 Transferring packaged technology
 Training of Hyundai engineers
 Results:
 Translating explicit knowledge to tacit knowledge
 Valuable migratory knowledge
 Higher prior knowledge level

20.  Phase 1 (Internal crisis in the absence of external crisis)
 Complete plant construction in shortest time
 Acquire a production capability in shortest time (For
production members)
 Prior knowledge base
 Intense interaction among the members
 Reassembling cars for routinization
 Intensity of effort
 16 hours a day, seven days a week

21.  Phase 2
 Shift from assembly production to development of locally
designed cars (By government)
 Assimilating the imported foreign technology ASAP
 Prior Knowledge base
 Studying all related literature
 Licensing agreements with Italdesign & Mitsubihi
 Approaching 26 firms to receive unpackaged sources
 Hiring a manager to put knowledge together
 Intensity of effort
 Intensive interaction among members (in Italy)

22.  Phase 3: Translating external crisis to internal
 Oil crisis
 Developing next generation FF car and tripling production
 Prior knowledge base
 Approaching Mitsubishi for licenses
 Studying about CAM/CAD
 Studying Catia package for expanding knowledge
 Intensity of effort
 14 months for internalizing literature
 36 months of hard preparatory work

23.  Phase 4: Internal Crisis
 Becoming independent
 Developing a state-of-the-art engine
 Prior knowledge base
 Opening R&D centers and doing research
 Recruiting Korean-American engineers from US
 Collecting all English & Japanese literature
 Agreement with British Ricardo Engineering for technical training
 Intensity of effort
 Dividing taskforce to do research
 14 months of trial & error before first prototype and 11 broken ones!

25. Knowledge source and
complementarity
Experience
 Source: Zahra & George (2002)
Competitive
Advantage
Strategic Flexibility
Innovation
Performance
Social
Integration
Mechanism
Regimes of
Appropriability
Absorptive Capacity
Activation
Triggers
Potential Realized
Acquisition
Assimilation
Transformation
Exploitation

26. 1. Catching-up firms in developing countries reverse
the sequence of R,D,E of advanced countries
2. Migratory knowledge that is available for catching-up
firms, gives rise to prior knowledge base
3. Crises were constructed proactively rather than
reactively
4. Past successes in transforming crises into creative
learning evoke the self-confidence that leads to
further risk-taking by crisis construction

27.  Can Hyundai also use crisis construction for
pioneering?
 Can catching-up firms in other countries emulate
Hyundai’s learning model?
 What are the benefits and risks of internal crisis
against external ones?