While many firms have introduced factory automation to acquire the competitive advantage, recent researches have pointed out that implementation of factory automation has ben failed due to lack of balance with human resource management. The purpose of this paper is to investigate the relationship between factory automation and dynamic flexibility. We have used the case study as a method of this study. Hyun and Ahn(1992) argued that dynamic flexibility - an ability to improve the total production system continuously for environmental changes - can be improved through the human resource management. This study investigated the effects of several factors - worker's skill change, job design, training, participation, etc. - on improvement of dynamic flexibility in relation to adoption of factory automation. In particular, when factory automation is introduced, worker's skill upgrading, job enlargement and enrichment, retraining, and worker's participation in decision making and implementation play an important role in improvement of dynamic flexibilty.
