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CONTENTS
01 THE EMERGENCE OF CHAE-BOLS
02 KOREA’S TOP 4 EN-TREPRENEURS
2.1 SAMSUNG2.2 HYUNDAI2.3 LG2.4 SK
30. CHAEBOL VS KEIRETSU
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CHAEBOLS
Definition of CHAEBOL: a family-controlled industrial conglomerate in South Korea
: a closely held, integrated, yet diversified corporate entity that produces a wide array of product lines for global consumption
Origin of CHAEBOL
재 財 chae wealth, property벌 閥 bol faction, clan
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CHAEBOLS & FAMILIES
Hyundai 현대 - Jung Family, Jung Ju Young ( 정주영 )
Samsung 삼성 - Lee Family, Lee Byung Chull ( 이병철 )
LG Group 엘지 - Koo & Huh Family, Koo In Whoi ( 구인회 ) Huh Man Jung ( 허만정 )
In the year 2004, after 57 years of partnership,
LG Group
GS Group
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RISE OF THE CHAEBOLS
- Early 1960s President Park Jung Hee encouraged business to invest in the productive economy
- With other late industrializing countries after World War Ⅱ, Korean firms had to industrialize by borrowing and improving technology that had been developed by experienced firms in more advanced economies
- Korean firms began their rise by combining reengineered technology and mass production with competitive labor costs
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SAMSUNG
Lee Byung-Chull ( 이병철 )
1938 - Samsung Trading Company( 삼성상회 ) in Daegu
1953 & 1954- Cheil Sugar & Co. , Cheil Wool Texitle & Co.
1960s- Moved into the service sector- End of 1960s total sale: $100 million
1970s - Entered Electronics and Heavy Industries - End of 1970s total sales: $3 billion
1980s - Succeed in making 64KDRAM - Started to make “Worlds First” different types of semiconductors
SAMSUNG Samgyeop-sal
1990s - Digital Frontier Samsung - With it’s digital and internet technology Samsung became a “Digital Company”
2000 – Present- Represents Korea- Selected in Top 5 Brand Company- Take 21% of Korea’s export
Lee Kun Hee ( 이건희 )
Machinery & Heavy Indus-tries
- Samsung Heavy Industries
Electronics Industries
- Samsung Electro-Mechanics- Samsung SDI- Samsung Corning Precision Ma-terials- Samsung SDS- Samsung Techwin- Samsung Mobile Display- Samsung Digital Imaging
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SAMSUNG’S AFFILIATES & SUBSIDIARIES
Chemical Industries
- Samsung Total Petrochem-icals- Samsung Petrochemicals- Samsung Fine Chemicals- Samsung BP Chemicals
Financial Services
- Samsung Life Insurance- Samsung Fire & Marine Insurance- Samsung Card- Samsung Securities - Samsung Investment Trust Man-agement- Samsung Venture Investment
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SAMSUNG’S AFFILIATES & SUBSIDIARIES
OTHER AFFILIATED COMPANIES
- Samsung C&T Corporation- Samsung Engineering- Cheil Industries- Samsung Everland- The Shilla Hotels & Resorts- Cheil Worldwide- S1 Corporation- Samsung Medical Center- Samsung Human Resources Development Center- Samsung Economics Research Institute- Samsung Lions- The Ho-Am Foundation- Samsung Foundation of Culture- Samsung Welfare Foundation- Samsung Life Public Welfare Foundation
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SAMSUNG’S AFFILIATES & SUBSIDIARIES
1940s 1947 Establishment of Hyundai Togun by Chung Ju-Yung Chun Ju-Yung November 25, 1915 ― March 21, 2001
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HYUNDAI’S HISTORY
1960s
1965 Hyundai Construction become the first construction company to go overseas
ex) → Thailand, South Vietnam, Australia Alaska, and Guam
1968 Hyundai Motors was established
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HYUNDAI’S HISTORY
- Hyundai Merchant Marine- Hyundai Securities- Hyundai Elevator- Hyundai Logiem- Hyundai Asan- Hyundai U&I- Hyundai Research Institute- Hyundai Investment Network
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HYUNDAI’S AFFILIATES & SUBSIDIARIES
Chung Ju-Yung resided as the president of the Federation of Korean Industries (FKI)
Hyundai Motor Com-pany
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HYUNDAI’S HISTORY
Pony
Sonata more upscale midium-sized car
→North American Market
1990~21C
Hyundai kicked off high-technology R&D and restructuring auto, machine ship building, and elec-tronics→ over 10% of the total revenue into R&D 1994 U.S sales of Hyundai cars topped 125,000, a company record
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HYUNDAI’S HISTORY
HISTORY
•1998 – Visit to the North Korea with a herd of cows and the launching of Mt. Kumgang tourism
•1999 – Establishment of Hyundai Asan
•2000 – Former CEO Jung Mong-hun continues inter-Korean economic cooperation
•2001 – The honorary chairman, Jung Ju-yung passed away and the completion of Hyundai group restricting
•2003 – Chairman Jung Mong-hun passed away and commencement of a new system and structure for further breakthroughs under CEO Hyun Jung-eun
•2004 – Proclamation of Vision 2010.
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HYUNDAI’S HISTORY
Nowadays
consisting of 47 companies with 83 branch offices in 46 countries
Annual Sales for 1994 $ 49 billion more than 161,000 employees worldwide
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HYUNDAI’S HISTORY
Back-ground• 1947 founded by Koo In-Whoi
Started as Lucky Chemical Company
Initially manufactured cosmetics.
branched out into plastics (combs, toothbrushes,
basins…)
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LG’S HISTORY
• 1953 Establishment of Trading company.
• 1958 Creation of Goldstar. – Production of radios, refrigerators and Tvs.– Mergeance of Lucky-Goldstar.
• 1967 Pioneer in oil refinery ( South ko-rea)
• 1995 Renamed LG
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LG’S HISTORY
• 70-80’s
Lucky chem-
istry
Goldstar electronics
« Dual-track » product
innovations
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LG’S HISTORY
Nowadays
• 39 Affiliated companies, 39 joint-ven-tures
• 130 Branch offices around the world
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LG’S HISTORY
Differentiation
• Personality Cult
• Decentralized.– Development of competent professional
managers–Major strategic decisions still made in
the chairman’s office but individual companies are free to pursue their busi-ness as they see fit.
LG DIFFERENTIA-TION
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• A Conservative company– Avoids risky ventures
• Group harmony oriented– Motto is « INHWA »
• Emphasis on the sustainability
• Emphasis on the importance of competitive-ness
LG’S SPIRIT AND VISIONS Samgyeop-sal
• Majors efforts and investments on R&D
– Centered in the Central Research institutes in tae-dok • Undertakes research in chemical technologies
– R&D complex in Anyang• Focused on electronics research
• Agressive production overseas
LG DEVELOPMENT & STRATE-GIES
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Strict attention on Quality
Commitment to efficiency
Strategic Management
MissionLG’s goal is to become number 1 electronics manufacturer in the world
LG DEVELOPMENT & STRATE-GIES
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DAEWOO’s Past & Present
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DAEWOO’S PAST AND PRESENT
Daewoo firstly started aggressive management and had many good effects on the development of South Korea. Also, like Samsung and Hyundai, Daewoo attracted attention from people all over the world by performing a role of enhancement of national interests as a globalized conglomerate.
Although Daewoo group is disappeared now, it’s affil-iates such as Daewoo Construction, Daewoo Internationals, and Daewoo Shipbuilding & Marine Engineering are still re-maining and being acknowledged as international compa-nies from all over the world.
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DAEWOO GROUP
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•Founder : Choi Jong-geon (최종건 )•Founded : 1939•Headquarters : Seoul, South Korea
SK GROUP
Samgyeop-salHISTORY
1953 - Sunkyung Group began when the current founders acquired Sunkyung Textiles
1958 – Sunkyung started the Korean first fiber export and producing the basic polyester thread
1973 – Sunkyung established Sunkyung Petroleum
1980 – Sunkyung took over the privatized Korean Petroleum Public Corporation
1983 – Sunkyung started to develop overseas oil fields
1985 – Sunkyung formed the basis of the general information communications business
SK’S HISTORY
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1996 – Sunkyung Telecom launched the first commercial CDMA cellular phone service for the first time in the world
1997 – Sunkyung changed its name from Sunkyung to SK
2004 – SK succeeded in launching DMB saterlite
2006 – SK launched into revitalizing mobile phone market of 3.5 generation
2007 – SK provided more advanced services by constructing nationwide HDSPA network
2010 – SK Group is now the fourth largest conglomerate(chaebol) in South Korea
SK’S HISTORY
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Energy & Chemicals
- SK Energy - SK Chemicals - SKC- SK E&S - SK Gas - SK Lubricants
Marketing & Logistics services
- SK Networks - SK Walkerhill - SK E&C- SK Shipping - SK Securities - SK M&C
SK’S AFFILIATES & SUBSIDIARIES
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SK’S AFFILIATES & SUBSIDIARIES
Information & Telecommunication
- SK Telecom - SK C&C - SK Broadband- SK Telesys - SK Telink -SK Communications
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There is a criticism about SK group that it has de-veloped itself with a improper way such as a cozy rela-tions between politics and business. When Roh Tae-woo was the president of South Korea, Roh Tae-woo’s daughter and Choi Tae-won, the current CEO of SK group, got mar-ried. Because of it, Sunkyung could make the basis to de-velop the company to the number one oil refining com-pany and telecommunication company in South Korea.
CRITICISM
KOREAN CHAEBOLS VS JAPANESE KEIRETU
KOREAN CHAEBOLS(Samsung)
$ 62 billion 50
150,000
Family held
Highly cen-tralized
Early stage of development
JAPANESE KEIRETU(Mitsubis
hi)
$ 433 billion 189
400,000
Publicly held
Moderately decentralized
Clearly estab-lished
Size ・ Annual Sales
・ Number of compa-nies
・ Number of em-ployees
Nature of owner-ship
Centralization of power
Professionalization of Management
KOREAN CHAEBOLS VS JAPANESE KEIRETU
KOREAN CHABOLS(samsung)
unequals ; government over firm
Almost exclu-sively external
financing
Employees as variable cost of
production
relative equals
Large percentage of internal financ-
ing
Employees as fixed cost of production
Business-govern-ment relations
Nature of financ-ing
Approach to hu-man resource management
JAPANESEKEIRETU(Mitsubi
shi)