[OUTLOOK]Presidents and the bottom line

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[OUTLOOK]Presidents and the bottom line

The term "CEO president" seems to have caught the media's fancy lately. CEO is the abbreviation for chief executive officer, and I believe this term is being used to differentiate it from the kind of presidents we have had until now. Of course, the CEO of a business isn't the same as the president of a country, but a business and a country are both objects of management. The people want their president to give up political or "imperial" ambitions and become more like a CEO.

So what is the difference between a successful CEO and a president?

Management philosophy: A successful CEO has a particular management philosophy. He or she sets this philosophy as the standard for the decisions and actions made by employees. Much in the same way, a true president tries to plant a philosophy of government in the hearts of the people and turn it into a unifying force. When the Sept. 11 terror struck the United States, the "melting pot" was able to show amazing unity because the people of the United States had a strong sense of what it meant to be a nation. Without this sense of nationality, national unity is next to impossible. Unfortunately, our country is now experiencing disarray and conflict over the policies toward North Korea.

Strategic business unit: The CEO of a company decides the basic guidelines and strategy, and establishes a long-term management plan. A CEO operates what is called a strategic business unit; in Korean companies, the section that plays this role would usually be called the planning and management division. Our president also announces our national strategy and our long-term development plan at the beginning of the year through a speech by the prime minister.

But without a strategic research team like the ones in companies, the results are often poor. The Ministry of Planning and Budget, the Ministry of Finance and Economy, the Office of the Prime Minister and the Blue House all have planning functions, but there is no longer a central organ for planning the national economy like the Economic Planning Board of the past.

One might question the need for a state economic plan in these market-driven times, but the state plan I am talking about is not the five-year plans of the past. I mean a plan for a comprehensive economic strategy based on analysis and evaluation of the international and national economic situation. I mean the building of a structure where all national agencies can interact seamlessly. Japan strengthened the economic planning function of its cabinet office that absorbed the function of the now defunct Economic Planning Agency. The results of the integration can be seen in Japan's "Economic White Paper 2001" published early this year. There are many government and nongovernment economic institutes in our country. We must find a way to construct a comprehensive plan for the economy, using those resources.

Personnel management: A successful CEO pays careful attention to personnel management. The essential goal of management is the pursuit of productivity. A CEO needs an efficient staff with good managerial skills. A president also needs the right kind of officials in the right positions to raise the efficiency of state administration. There are numerous modern management techniques taught in management classes that can be applied to governing a country. For example, there is a need for economical and rational systems engineering and also for operations research to analyze problems and plan solutions. It is useless to look for such modern management techniques in the outdated bureaucratic system we now have.

Priorities: A CEO would like to do many things but there is a limit to his or her personnel and resources. Therefore, a successful CEO determines the priorities of business opportunities to maximize the distribution of resources. A wise CEO would start with the project that he or she determines has the biggest payoff and the highest chances of success. The CEO would then distribute the best personnel and most of the resources to this project. This should be the same in the administration of a country, but the presidents of our past have put their personal political interests before the priorities of the state, and by taking on projects of great personal and political interest but little chance of success, they have failed over and over. The proper governing of a country cannot be done without the priorities being set right.


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The writer is an economist and former prime minister.

by Nam Duck-woo

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