Posted June. 25, 2003 21:49,
Eight out of ten domestic companies surveyed said they were influenced by the bad economy this year. Worsened management conditions will make them go for stability-based management strategies rather than that for growth-based.
The Korea Chamber of Commerce (KORCHAM) reported on June 25 that 47.8% of domestic businesses surveyed said that the national economy would decrease in the latter half of this year while 33.9% forecast that they would remain low. Only 15.6% answered that the economy would recover by itself at a steady or even quickened pace.
In addition, management conditions are also expected to worsen. Only 13.9% answered that they would improve over the previous year while 39.6% chose Remain the same and 46.5% chose Worsen.
In fact, 38.3% said that sales revenue for the later half of this year would decrease while 23.4% said otherwise. The remaining 38.3% expected a similar figure as the previous year.
When it comes to setting up management strategies, companies have showed some passive positions 60% answered that they would concentrate on stability while only 32.2% considered further growth policy. In the same manner, 27% answered that they would reduce facility investment while 15.6% were faced in the opposite direction.
As for R&D and new recruitments, 53% and 44.8% said that they would remain at the same levels as the previous year for each section.
The greatest variable expected to influence the future economy was whether an overseas advanced economy will revive itself (37.2%) and the government`s coherence for economic policy (17.8%), the North Korean nuclear issue (11.6%) and SARS (10%).
An overwhelming percentage of those surveyed (56.1%) referred to diminished sales along with frozen consumer confidence as the most difficult obstacle to overcome. Small and medium-sized businesses (24.8%) said that they were having a hard time raising funds, as compared to 5.7% of large companies.
The most important index for setting up management strategies was surveyed to be net profit in the current term (43.9%) and sales revenues (34.8%) and cash asset holdings (8.7%) came next in order.
KORCHAM said that this uncertainty over the management environment will continue into the latter half of the year. Companies are therefore trying to focus on profitability-based operations rather than investment.