Will LG Morph into a Truly Global Company?

Posted by: Ihlwan Moon on May 27, 2008

If things pan out as Chief Executive Officer Nam Yong envisions, LG Electronics will emerge as the first truly global company belonging to the chaebol, South Korea’s family-controlled conglomerates. Sure, there are already several well-known multinational companies run by the Koreans. Samsung, Hyundai and LG all have scores of subsidiaries and plants around the globe and the bulk of their sales come from overseas. But when it comes to management style and human resources policy, they all have more or less followed the traditional Korean way.

Unfortunately, many foreign talents who have stayed with the chaebol find Korean corporate culture to be suffocating. No more, says Nam, who took over the helm of LG Electronics early last year. That’s because leading Korean companies have reached a level where they must seek innovation themselves, instead of imitating innovative star players. “Everything boils down to the race to recruit talents,” says Nam. “We must attract people who are among the best in each area regardless of their gender or nationality.”

To get the message across, Nam has declared that 30% of 84 overseas LG subsidiaries will be headed by foreigners in three to four years against nil at the moment. In the past six months, Nam has named four top officers at the headquarters with foreign talents. They are Chief Marketing Officer Dermot Boden (formerly with Pfizer), Chief Procurement Officer Thomas K. Linton (from IBM), and Chief Supply Chain Officer Didier Chenneveau (from Hewlett-Packard) and Chief Human Resources Officer Reginald J. Bull (from Unilever). Nam says embracing global standards in every sense will help LG post a double-digit annual sales growth and a 6% profit margin from 2010.

Reader Comments

Jack

May 27, 2008 10:37 AM

I never had good experience with Korean electronic products. A Samsung DVD player took my DVD and wouldn't let it out no matter what I tried, only after a few months. I had to get rid of with the DVD inside. A Samsung smart phone that I bought for $600 a few years ago was constantly crashing and reception was pathetic. I changed to a Treo recently with the cell company and same plan and it worked so much better. It's just my experience, but this is too many coincidences to be just coincidences for me.

wpak

May 27, 2008 9:49 PM

LG's big push for becoming a truly globalized company is positive and necessary in the competitive cut-throat electronics industry. By attracting talent based on performance and skill over nationalistic and traditional loyalistic mentality, this will improve LG's HR and boost the corporation in the long run. Maybe LG will help set a precedent for other chaebols (Samsung and Hyundai) in setting a trend for becoming a globalized company.

SKas

May 28, 2008 4:16 AM

Having worked at LG they can never be one. They can talk one thing and do something completely different.
Their culture is outright horrible

Jack the Pot

May 28, 2008 11:55 AM

Jack's IP address = China
No global brand is going to waste its time investing on quality in China. It is all about price in China. That's why you can't get a refined products there. So don't complain; but if you do want to complain, go and complain in the Samsung article. This article is about LG.

JMil

June 17, 2008 1:51 PM

I worked at LG for 6 years. Their culture is racist. Only Koreans and their opinion matter. I have seen many USA born citizens with talent hired as managers and were given no authority only pawns for Korean decisions and the results. The management decisions made by Koreans are based on how thing work in Korea. They usually go wrong leaving the American managers as the fall person.
The LG CEO plan will never work.

Alfonso

October 23, 2008 6:04 PM

Current LG's and Korean companies' overall work culture abroad has no future.
Mr Yong Nam's local management policy shall succeed but too many enemies are hiden...
Goog luck Mr. Nam!

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Bloomberg Businessweek’s team of Asia reporters brings you the latest insights on business, politics, technology and culture from some of the world’s biggest and fastest-growing economies.

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