Three members of Hyundai Motors chairman Chung Mong Koo's family have been promoted to company president positions at the same time. Hyundai Motors announced a few days ago that Chung's only son, Chung Eui Sun, son-in-law Shin Sung Jae, and nephew Chung Il Sun have been promoted to head affiliated companies. Each man is between the age of 35 and 37, so there can be no question that these are promotions received at a super high speed. Under ordinary circumstances it would be reason to congratulate someone, so why are there so many voices expressing concern? The reason is simple; people with unproven management skills have been put in top positions simply for being part of the tycoon's family. Hyundai Motors should be an example to other companies, so it is sad to see it make such choices. It seems as if it cannot rid itself of the temptation to engage in pre-modern hereditarily management.
Chung Eui Sun will be president of Kia, which is not your simple individual or mid-sized company. It is almost a national company, given the role it occupies in the national economy and its share structure. The country has seen many times just how big the effects are when things go wrong at a company that size. That is why someone with expert skill needs to be in the position of president and other top spots. About Chung, however, you have your doubts. Perhaps aware of those doubts, Hyundai Motors announced that the personnel move was made to increase the responsibilities of the major shareholding family, but that is not persuasive. Increased responsibility on the part of the major shareholder does not guarantee knowledgeable management, and are there not many companies that assert the same only to engage in reckless and irresponsible management?
Common sense management tells you that it is not wise to suddenly entrust the management of a conglomerate to children and other family members just because you hold them precious. If they lack management skills they should do like is done in advanced countries, and be left to manage the family shares while not participating in day-to-day company affairs, as doing so would be best for them and best for the national economy. Such is the case, and yet hereditary management continues recklessly at jaebeol groups. The country has been saying it will have jaebeol reform, but companies have a long way to go before they modernize their operations.
The Hankyoreh, 28 February 2005.
[Translations by Seoul Selection (PMS)]
[Editorial] Hyundai Family's High-Speed Promotions |
