‘MB-style Reshuffling’ Boom in the Business Sector

President-elect Lee Myung-bak’s ‘MB-style reshuffling’ wave, emphasizing ability and efficiency, swept the nation’s business sector.

Aggressive business management movement including expansion of investment has become clear after Lee and the nation’s business leaders held a meeting on December 28, showing signs of the revival of business planning department which have lost power since the financial crisis in 1997.

According to the business circles on January 1, the Federation of Korean Industries (FKI) is considering concentrating its internal business structure on the Task Force (TF), in an effort to support and cooperate with the next government’s various projects.

Other than the seven departments of the presidential transition committee, the president-elect created six additional Task Forces under the umbrella of a special committee for strengthening the national competitiveness; the government’s innovation and deregulation, attracting investment, climate change and energy related issues, the grand canal plan, Saemangeum (an estuarine tidal flat), and science business belt.

FKI’s Vice President Lee Seung-cheol said “An organization consisting of TF in charge of each project works more efficiently than an organization divided by sectors such as economy, welfare and labor. While working as the mayor of Seoul, President-elect Lee successfully restored the Cheonggyecheon stream running through the center of the city and reformed the transportation system by operating a project team, proving the efficiency of the organization.”

The FKI also considers strengthening relative evaluation of the employees in order to inspire tension into the organization.

In line with the launch of business-friendly government, the domestic companies are planning to reshuffle their organizations to support aggressive business management. The functions of the planning department which have reduced drastically since the financial crisis came into the spotlight once more.

Samsung Group launched a TF to nurture future growth engine in October 2007 after suffering from a failure in the automobile business shortly after the financial crisis, resulting in the loss of experts in the planning department.

“After the financial crisis swept the nation, corporations have been regarded as the culprit of the crisis. That’s why they have put value on merely maintaining their business. However, they will become more aggressive and put a higher priority on future growth under the next government. If the plan is realized, planning functions will come into the spotlight since they can manage global M&As and new investment in general,” said a senior Samsung executive.

As Hyundai-Kia Automotive Group Chairman Chung Mong-koo announced his plan to invest 11 trillion won next year, South Korea`s top carmaker is strengthening its marketing and sales department.

“Our management style has become aggressive. We will announce additional personnel changes soon in order to strengthen marketing and sales while maintaining our quality management,” said an official from Hyundai-Kia Automotive Group.

Yoo Byeong-gyu, a director at Hyundai Research Institute, said, “It’s a natural phenomenon, though belated. If a firm sticks to restructuring, it necessarily perishes. However, Korean businesses could neither invest nor grow due to business-unfriendly environment.”

“Even though firms are trying to strengthen their planning arms, they cannot borrow money from banks and invest unreasonably anymore. Financial parts will play a more significant role due to the function to evaluate profitability and stability of investment plans,” said a Korean businessman.

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