10/30/2020 00:52 GMT + 7
The leaders of large family conglomerates in Korea (chaebol) must do everything to counter the proverb ‘No one is rich in three families, no one is difficult for three generations’.
The leaders of the four largest corporations in Korea sat together at President Moon Jae In’s New Year reception on January 2, 2020. From left: SK Group Chairman Chey Tae Won, LG Group Chairman Koo Kwang Mo, Hyundai Motor Group Vice President Chung Eui Sun and Samsung Electronics Vice President Lee Jae Yong. Photo: Yonhap
Owners of Korean chaebol have outlined many sophisticated plans, complex shareholder structure networks to transfer the family business and maintain enormous wealth to the next generation.
After the death of Samsung Chairman Lee Kun Hee, eyes are on his only son, Samsung Electronics Vice President Lee Jae Yong. People are curious how Lee Jae Yong, 52, will pay his inheritance tax over 10 trillion won and take over the country’s most valuable company? Samsung’s total revenue is equivalent to one fifth of Korea’s GDP. Most of the revenue comes from the sale of chips and handsets.
The upheaval at Samsung also brought the new generation of Korean chaebol leaders to the spotlight.
Chaebul.com CEO Chung Sun Seop stated that Lee Jae Yong’s handling of the inheritance issue and leading Samsung Group amid the legal controversy surrounding him will set an important precedent for other chaebol preparing for succession. excess power.
Chung Eui Sun, heir to Hyundai Motor Corporation, was appointed Chairman earlier this month to replace his father, Chung Mong Koo. This is the first generation transfer in 20 years at Korea’s No. 2 corporation and the world’s 5th largest car manufacturer.
Mr. Chung, 49, has led the development of Genesis luxury cars and is committed to promoting hydrogen cars, electric vehicles and other mobility solutions in the future amid competition from the electric car company Tesla. acrimonious.
LG Group Chairman Koo Kwang Mo is also in the new wave of business leaders aged 40 to 50, who is brought to the front line thanks to his bloodline. The 42-year-old heiress took over the fourth largest corporation in South Korea from the late President Koo Bon Moo in June 2018. LG Group includes subsidiaries such as LG Electronics, LG Chem, LG Uplus, LG Household & Health Care.
All of these shifts come at a time when CEOs face a new era of challenges: one-hundred-year epidemic, trade disputes, rapidly changing technology.
Observers argue that third-generation chaebol leaders should adapt to the new business environment because they cannot run the company like their ancestors did in the 1960s and 1970s, when the first priority was to expand. tissue.
The founders of these conglomerates started out from the ruins of the Korean War of 1950-1953 and witnessed tremendous growth thanks to the government’s support in the 1960s and 1970s.
Several successful second-generation heirs, such as the late Samsung Chairman Lee Kun Hee, are noted for developing their father’s company into global brands, while also contributing to the rise of Korea. Nations to rise to the world’s 12th economy after a few decades.
The current third generation leader faces the daunting task of maintaining market leadership as well as fostering new growth engines for future survival.
A key figure in the world’s largest smartphone and memory chip maker, Lee Jae Yong is committed to expanding investments in chips, artificial intelligence, and 5G. Meanwhile, in January, Hyundai Motor Chairman Eui Sun also announced plans to invest 100 trillion won over the next five years to expand the electric vehicle line and develop self-driving car technology.
With the public’s growing awareness of corporate community responsibility and shareholder value, observers say the new generation of leaders must also shoulder the responsibility of reforming the board to generate growth. lasting. According to senior researcher Ahn Sang Hee of the Daishin Institute of Economic Research, it took Samsung some time to implement model reform due to inheritance tax issues and other pending bills related to inheritance plan. Hyndai Motor is also expected to reform the structure to strengthen the position of the new chairman.
In addition, Mr. Lee Jae Yong has two more trials waiting ahead because of his role in the controversial merger between subsidiaries and accounting fraud. Mr. Eui Sun does not have a large stake in Hyndai Mobis, which is seen as the key to controlling the group.
As domestic giants have been harshly condemned for their shady association with politics and fierce competition in key areas, new leaders are called to change their corporate culture and philosophy to survive. in. “The business structure and business portfolio may not change boldly under the new leadership, but the management style and culture should be changed to suit the new business environment,” said Mr. Chung Sun Seop. review. “The biggest challenge for third-generation chaebol leaders is to change the image from those who are” golden spooned “to real entrepreneurs with real business achievements.
Du Lam (According to Yonhap)
‘Crown Prince’ Lee Jae Yong does not take over Samsung easily
After Chairman Lee Kun Hee passed away, the tallest chair at Samsung remained empty.