Friday, February 28, 2020
Chaebol Chairmen Taking the Lead in Changing Corporate Culture
To Adapt to Era of 4th Industrial Revolution
Chaebol Chairmen Taking the Lead in Changing Corporate Culture
  • By Jung Min-hee
  • January 7, 2020, 11:23
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SK Group chairman Chey Tae-won

Once a symbol of authoritarianism, chaebol chairmen are taking the lead in changing the corporate culture of their business empires. In the era of the Fourth Industrial Revolution, creativity has become more important than ever, so they are seeking to establish a new corporate culture based on autonomy and communication. In particular, young leaders with a global mind are embracing the Silicon Valley culture of Apple, Google and Facebook.

SK Group chairman Chey Tae-won is a leader in this change. He stressed “deep change” at the June 2016 expanded meeting of group CEOs in a bid to change the corporate culture. He has also been championing social value, which refers to the achievements of a company in resolving various social issues, such as pollution and jobs, through its business activities. In May last year, SK Group unveiled a system to measure the social value created by its affiliates in compliance with the chairman’s new business philosophy, which calls for sharing benefits with society.

Samsung Electronics introduced a job grading system based on career development in 2016 to transform its existing seniority-based personnel management system into a job- and role-oriented one that values expertise. The company introduced a voluntary commuting system in 2015, allowing employees to work autonomously as long as they work more than four hours a day and more than 40 hours a week. The company sought to transplant a Silicon Valley-style corporate culture suitable for IT companies.

Samsung Electronics vice chairman Lee Jae-yong visited the cafeteria of Samsung C&T's construction division and lined up with a meal plate to lunch with employees. In particular, he sought to reach out to young employees by taking selfies with them.

Hyundai Motor employees who worked with white shirt sleeves rolled up wear jeans and T-shirts these days. Under the leadership of senior vice chairman Chung Eui-sun, Hyundai Motor Group is rapidly changing its corporate culture to introduce innovative work practices and share values. ​​It has unified the titles of regular employees into two and reduced the number of positions from six to four. In addition, it introduced an absolute performance assessment system and eliminated the minimum years of service required for promotions, helping competent employees to get promoted quickly.

LG Group Chairman Koo Kwang-mo declared the creation of a “New LG” through digital transformation. LG Electronics has strengthened its IT culture through its chatbot service called LGenie that aims to improve employees’ learning ability. The group chairman’s New Year greetings were delivered to the world through video clips.

However, since corporate culture innovation is based on performance, employees and corporate heads are obsessed with performance. “Young chaebol chairmen are facing the burden of having to surpass the performance of their fathers and grandfathers,” a commentator said. “Furthermore, they need to come up with solutions to overcome the low-growth era. This means they need a different management philosophy and operation method from those of their fathers and grandfathers.” In addition to improving corporate culture, he added, "Chaebol leaders need to win the hearts of group members by showing their commitment to responsible management. They should be willing to step down if the performance of their business groups is poor."