Growth Mechanisms and Sustainability by Unknown

Author:Unknown
Language: eng
Format: epub
ISBN: 9789811624865
Publisher: Springer Singapore

4 Struggling to Produce High-Grade Steel in South Korea

To describe the difficulty associated with producing high-end steel products, understanding the technological complexities can be helpful but not provide a full picture. Notably, the organizational learning aspect can also provide important clues.

We use the concept of ‘technology recognition’ as the reason why companies are overly dependent on manufacturing equipment when introducing new technology. Specifically, in the case of high-grade steel manufacturing in the steel industry, we stress the existence of ‘technological recognition’ associated with the difficulties of steel makers in emerging countries, including South Korea. In addition, ‘interprocess coordination and interorganizational coordination’ for high-grade steel production will be described in detail.

South Korea planned to build integrated steelworks beginning at the end of the 1960s and introduced the funds and technology necessary for construction. The main partner was Japan. In the 1960s, South Korea obtained a large amount of funds for the construction of integrated steelworks, in conjunction with Japan, and built integrated steelworks in Pohang in the southeastern part of South Korea as a national project.4 POSCO (Pohang Iron and Steel Co.) was established as the result of this national project. As shown in Table 1, POSCO has grown to 5th in the world based on crude steel production.

In the history of the Korean steel industry, POSCO became the first integrated steel maker.5 However, the company is not the first steel maker in South Korea. In the 1950s, immediately after the Korean War, there were already steel makers without blast furnaces in South Korea.

POSCO started the operation of Pohang Steel Works, the first steelworks in the 1970s, and then built a second steelworks in Gwangyang located in the southwestern part of South Korea in the 1980s and started operations. Table 2 shows the breakdown of equipment procurement at Pohang steelworks.Table 2Main equipment suppliers of Pohang Steel Works

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