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Title: The expansion and restructuring of the steel industry : the case of POSCO and BSC.
Author: Lee, Young-Hoon.
Awarding Body: Birkbeck (University of London)
Current Institution: Birkbeck (University of London)
Date of Award: 1992
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This thesis provides an analytical and empirical comparison of the evolution of the British and Korean steel industries. Although there are important similarities, the main companies BSC and POSCO, having been state-owned for most of their lives, and both recently privatised, their historical evolution was quite different. POSCO expanded continuously, BSC restructured and retrenched. We examine the three main factors that have shaped the fortunes of the two companies: international competition, corporate strategy and government policy. The world steel industry witnessed a significant trend of internationalisation. The primary form has been through the spatial expansion of steel production and the growth of steel trade. The steelmaking activity has been still under the control of national capital and government. The internationalisation of productive capital was relatively slow. The nation state and national capital have more room to organise its steel industry. The rapid expansion of POSCO and the restructuring of BSC has consisted of two main components; massive capital investments and intensive utilisation of inputs, - particularly labour. POSCO's corporate strategy has been rewarded successfully by its rapid capacity expansion, profitable performance and strong competitiveness. BSC's restructuring was very costly. After heavy investments based on misguided forecasts in the 1970s, BSC had to massively restructure its operations, closing marginal plants and increasing the intensity of operation. This restructuring produced a much smaller, but low cost and profitable producer. The British and Korean government developed different forms of state-ownership, government supports and control. The massive supports and elaborated control structure tended to undermine the commercial objectives of BSC. The Korean government effectively provided POSCO with incentives for its expansion. BSC and POSCO had significant autonomy in running their business. One interesting feature of both histories is the role of economic irrationality in success. In Korea, most analyses, e. g the World Bank, indicated that creating a steel industry would be wasteful and uneconomic. In Britain, successful restructuring of the 1980s was only possible on the basis of the misjudged investments in integrated facilities of the 1970s.
Supervisor: Not available Sponsor: Not available
Qualification Name: Thesis (Ph.D.) Qualification Level: Doctoral
EThOS ID:  DOI: Not available