Harmony Is Key to Drug Firm’s Success

In baseball, there is the “20-20 club.” Its members are players who record 20 homeruns and 20 steels in one season.

In general, sluggers lack speed and fast runners lack hitting power, which means it is very difficult to join the 20-20 club. In 2004 and 2005, not a single Korean professional baseball player made it to the club.

Samjin Pharmaceuticals is a member of the “management” 20-20 club.

The firm’s annual average sales and net income both grew by more than 20 percent during the five years since 1999. According to LG Economic Research Institute, only 19 out of the 677 listed companies did so during the same period.

There is another hidden record.

According to a recent Korea Exchange announcement, only nine companies saw six-year consecutive growth in net income among the 328 companies whose accounts were closed last December. Samjin was one of them. Samjin’s sales per employee jumped from below 100 million won in 2001 to 220 million won last year.

How was all this possible? Samjin didn’t even develop a blockbuster-level new medicine during the period.

When asked about the secret behind Samjin’s success, the CEO gave a simple answer.

“All that a company has got to do is to take good care of its employees. All that employees have got to do is to work hard with a sense of ownership.”

Sound Labor-Management Relations Is the Secret-

Geworin, a headache medicine, is about the only famous drug that Samjin is known for. However, among pharmaceuticals, the company is very well known for its strong welfare policies for employees. For instance, Samjin introduced the five-day work week system in as early as 1977.

Lee became CEO in 2001 as the company’s first “salary-based” CEO.

He had worked as a salesman for 30 years and is therefore thoroughly aware of the reality in Korean pharmaceuticals industry, where diverse products are produced in small amounts and competition is fierce.

That is why Samjin started pursuing “people-oriented management.” Lee first changed the wage negotiation practices so that employees could concentrate on work without any contempt.

“A bargaining period that lasts four, five months is a drag on both the management and the labor. So, the management offered to give the labor what it wanted as the annual wage.”

The labor announced it would agree to the offered wage without negotiation. This has been going on for the fifth year. Samjin has continued its record of no labor-management dispute for 38 years since its establishment in 1968.

Samjin is also well known for its “sauna management,” where, once or twice a month, everyone from new employees to executives go for a sauna together and have dialogue.

“This year’s goal is sales of 150 billion won. We’re aiming high. But when I see our employees, I don’t think it’s an impossible goal, either.”

Jae-Dong Yu jarrett@donga.com