Tuesday, May 27, 2008

Progressive LG: A Company with no Nationality

In my previous post, I pointed out that it was vital to anyone working with Korean firms to understand the specific dynamics of Korean business and specific firms.  
In addition, in past posts I noted that culture and norms varied among Korean firms. LG is among the most progressive. But, just because LG is changing, I wouldn't expect other firms to change soon. 

Korea Media...
LG Electronics said Tuesday it will replace at least one third of the Korean heads of its 84 overseas operations with locally hired employees in the next three to four years in an effort to become a ``company with no nationality.''

This is a bold reform initiative for a subsidiary of a South Korean conglomerate, where in the past important corporate positions have been filled exclusively by loyal Korean employees regardless of location or the nature of the business.

LG have already appointed several foreign specialists to the posts in its headquarters, such as the roles of chief marketing officer and chief human resources officer. Samsung, Hyundai and many other conglomerates, however, are still sticking to Korean executives and managers despite their growing global presence.

``On the surface, we are in a competition of products. But inside, it is a competition of human resources,'' Nam Yong, chief executive and vice chairman of LG Electronics, said at a press conference held in Seoul. ``We want to hire the most talented workers in each country. But if we always send Koreans to head overseas branches, local employees will not be motivated to work hard for a promotion. We want them to be motivated and have a vision.''

LG is one of the world's largest electronics makers. It is the second biggest maker of televisions and the fourth largest mobile phone producer. About 60 percent of its goods are manufactured overseas and more than 80 percent are sold outside of Korea. However, all of its 84 foreign branches and subsidiaries are headed by Koreans, similar to Samsung, Hyundai and SK.

Nam, who himself was a branch chief of LG's Los Angeles operations back in the 1980s, has been urging the company to use English as its official language since he became CEO last year. He has also introduced foreign businessmen to C-level executive posts at the firm.

Last year he appointed Dermot Boden, an Irishman formerly of Pfizer, as chief marketing officer; Thomas Linton, an American from IBM as chief procurement officer; and Didier Chenneveau, a French citizen from Hewlett-Packard as chief supply chain officer. Most recently, Englishman Reginald Bull was appointed chief human resources officer.

Even its Chief Technology Officer Paik Woo-hyun is an American citizen, leaving just CEO Nam and chief finance officer Jung Do-hyun as the only Korean citizens among the six C-level posts.

``What we are doing is not just replacing Koreans with foreigners. We want to change the corporate culture,'' Nam said. ``After three or four years, nationality or gender won't be taken into account when hiring top positions. Only performance and capability will be considered,'' Nam said, adding that employees are welcoming the arrival of able non-Korean leaders.

No comments:

Post a Comment