B&E: With younger generations embracing western management styles, will the Chaebols mend their ways?
MO: One of the interesting points of the present large business
groups in the emerging markets is that, while family ownership is firmly maintained, the management of the group companies is undertaken by professional managers. Considering the well-known principle of division of “ownership” and “management” in modern large enterprises theoretically, it is not a big contradiction. It is true that Chaebol’s management style is changing. The transparency and accountability of listed companies is highly necessitated by the business society in present Korea. However, the core of the Chaebol system, the central ownership of single family and their strong influence in the management decision, in particular in investment, still remains pretty much the same, and hidden in the multi-layered ownership structure with many unlisted holding companies.
B&E: Are the Chaebols holding back the Korean economy?
MO: I don’t think so. The small and medium enterprises in Korea are basically weak when compared to Japan or Taiwan, and they have been always the large business groups that have led Korean industrial upgradation. Large business groups maintain the economic development of Korea as the main driving force. If the growth rate of large business groups falls down, the rate of Korean GDP will also decline. But that is different from saying that large business groups are holding back the whole economy.
B&E: Will the Samsung scandal herald the end of Chaebol’s grip on South Korean economy?
MO: I don’t agree with the idea. The scandal of Samsung in these few years is essentially, in my understanding, not led by economic reasons, but by the political necessity to scapegoat the most prominent wealth producer in Korea (such abnormal degree of wealth concentration to a single entity will hardly happen again). And considering the critical importance of Samsung to Korea, it’s unbelievable that the government & jurisdiction will drive it into a corner in a real sense.
For Complete IIPM Article, Click on IIPM Article
Source : IIPM Editorial, 2008
MO: One of the interesting points of the present large business
groups in the emerging markets is that, while family ownership is firmly maintained, the management of the group companies is undertaken by professional managers. Considering the well-known principle of division of “ownership” and “management” in modern large enterprises theoretically, it is not a big contradiction. It is true that Chaebol’s management style is changing. The transparency and accountability of listed companies is highly necessitated by the business society in present Korea. However, the core of the Chaebol system, the central ownership of single family and their strong influence in the management decision, in particular in investment, still remains pretty much the same, and hidden in the multi-layered ownership structure with many unlisted holding companies.B&E: Are the Chaebols holding back the Korean economy?
MO: I don’t think so. The small and medium enterprises in Korea are basically weak when compared to Japan or Taiwan, and they have been always the large business groups that have led Korean industrial upgradation. Large business groups maintain the economic development of Korea as the main driving force. If the growth rate of large business groups falls down, the rate of Korean GDP will also decline. But that is different from saying that large business groups are holding back the whole economy.
B&E: Will the Samsung scandal herald the end of Chaebol’s grip on South Korean economy?
MO: I don’t agree with the idea. The scandal of Samsung in these few years is essentially, in my understanding, not led by economic reasons, but by the political necessity to scapegoat the most prominent wealth producer in Korea (such abnormal degree of wealth concentration to a single entity will hardly happen again). And considering the critical importance of Samsung to Korea, it’s unbelievable that the government & jurisdiction will drive it into a corner in a real sense.
For Complete IIPM Article, Click on IIPM Article
Source : IIPM Editorial, 2008
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