Three Keywords Reflected in Personnel Management

Korea’s business circle has completed their regular personnel changes.

LG and SK, among the nation’s four biggest business groups, have announced personnel changes, and the Hyundai Kia Automotive Group is expected to announce its personnel changes on December 28 at the earliest. Lots of other business groups, including Kumho Asiana Group, Hanjin Group, Hyundai Heavy Industries, Shinsegae, and STX Corporation have finished their personnel changes for the year.

However, the Samsung Group is expected to announce its personnel changes just before the general meeting of shareholders in March next year, since it is now subject to a special investigation due to the slush fund scandal.

The characteristics of this year’s personnel changes boil down to three keywords: spreading merit-based personnel management, securing new growth engines, and strengthening global competitiveness.

With economic conditions expected to remain uncertain next year, the three keywords implying both survival and growth strategies are likely to be adopted by other companies that have not finished their personnel changes.

Merit-based personnel management is notable in LG, which has shown unprecedented management performance this year.

LG Group promoted LG Chem President Kim Bahn-suk to the group’s vice chairmanship, thus putting its major business under the control of vice chairmen (LG Group’s holding company LG is run by Vice Chairman Kang Yu-sik, and LG Electronics is run by Vice Chairman Nam Yong).

LG Chem Vice President Park Jin-soo was also promoted to LG Chem president. Kwak Woo-yeong, Bae Won-bok, and Song Dae-hyeon, directors of the Mobile Communications Department of LG Electronics, were all promoted to vice presidents since they have successfully launched a series of hit products, including the Chocolate phone and the Shine phone.

Well-performing employees in their early 40s were also promoted to high level management positions. Those promoted include LG Telecom’s Customer Relationship Team chief Min Eung-jun, who has lured a whopping 7.8 million subscribers this year, Strategy and Planning Team chief Park Sang-hoon, and Kwon Jun-hyeok in charge of technology strategies.

Kumho Asiana Group Chairman Park Sam-koo allowed presidents of the group’s 19 affiliates which generated record sales and operating profits for the first nine months of this year to maintain their positions next year.

Hanjin Group announced 46 promotions while raising Korean Air’s Executive Directors Kang Yeong-shik and Seo Yong-won to the vice president level.

Korean businesses are expected to adopt performance-based personnel management more aggressively. In order to place a heavier responsibility on each department, SK Group introduced the ‘Company in Company’ system, which prevents under-performing departments from getting a free ride.

Hyundai Heavy Industries promoted 69 employees this year. Even though it has focused on shipbuilding, it chose 55 (out of a total of 69) from non-shipbuilding businesses in an effort to secure global competitiveness as an integrated heavy industry company.

In its regular personnel changes early this month, Shinsegae appointed Shinsegae Mart (formerly Wal-Mart’s) Vice President Jeong O-muk to division chief so as to strengthen its private label (PL) strategy and spread ‘price innovations’ starting from its superstore chain E-Mart.

This year, LG Group promoted 84 employees to directors. Under its new strategy to preferentially secure core technologies in future growth businesses, the group chose 18 directors or 21% (out of a total of 84) from its research and development division.

LG Electronics also appointed Vice President Nam Young-woo to president of its businesses in Asia. Mr. Nam has contributed to analyzing business strategies of LG Group’s affiliates operating in the communications service area and nurturing future growth engines while working as the leader of the business management team at LG Corporation.

Aiming at expanding its business, LG Chem appointed Managing Director Nam Cheol, who worked as an M&A specialist at the global consulting firm Booz Allen Hamilton, to expert advisor.

SK Group, which announced its transition to a holding company in July this year, promoted SK Energy President Shin Heon-cheol, a close assistant to SK Group Chairman Chey Tae-won, to vice chairman. Such a movement of SK shows the group’s effort to accelerate global management.

Targeting global management, the STX Group yesterday divided all of its affiliates into four business sectors of marine transportation and trade, shipbuilding and machinery, plants and construction, and energy. Also, it unprecedentedly promoted 64 employees to high-level managers.

Out of the 60 newly promoted high-level mangers of LG Group, 20% will be in charge of global businesses. It reflects LG’s strategy to secure competitiveness on the global market.

Shinsegae, striving to expand its business in China, promoted General Manager Jeong Min-ho, leader of E-Mart’s Shanghai branch, to director, four years earlier than average.

Personnel management of construction firms, which have struggled this year due to mounting regulations, also showed efforts to strengthen global competitiveness.

GS Engineering & Construction created global business task force team while promoting Managing Director Heo Seon-haing, in charge of sales in the Middle East, to executive director of overseas plant sales businesses. Daewoo Engineering & Construction elevated its overseas sales division to an independent business sector consisting of four teams: petrochemistry, energy, engineering, and construction.