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[FOUNTAIN]Clean corporations

Published: 08 Oct. 2003, 22:08

Known as “the father of modern management,” Peter Drucker rose to intellectual stardom in 1946, when he published his “Concept of the Corporation.” Written under the sponsorship of General Motors, the tome was the first scientific analysis of a major global corporation. But General Motors, which essentially made the book possible in the first place, completely ignored Mr. Drucker’s advice and even told its subcontractors not to buy it for gift presentations. Alfred Sloan, who ran GM at the time, was especially displeased with Mr. Drucker’s ideas.
The friction between Mr. Sloan and Mr. Drucker was most apparent in the question of the accountability of a corporation. Mr. Sloan’s idea of corporate accountability was to maximize profits within the boundaries of the law. But Mr. Drucker pointed out that company’s social responsibility was as important as its economic achievements. A company inevitably shares responsibility for the quality of life in a society, and therefore it can survive in the long run only if it wins respect from members of the society. Mr. Drucker wrote that GM, the world’s biggest business entity at the time, was ignoring that social obligation, according to a book by John E. Flaherty about Mr. Drucker.
The social marketing consultants Steve Hilton and Giles Gibbons took that idea to the next level and asked for social leadership from corporations. In their book, “Good Business: Your World Needs You,” Mr. Gibbons and Mr. Hilton say that companies must actively participate in changing the world by using their organizations and brands. They cite Coca Cola’s anti-AIDS campaign in Africa as an example of the acceptance of social responsibility.
SK Group was not long ago selected as having the best corporate image in Korea. The name SK immediately reminds us of the Academic Quiz Show, which the company has sponsored since 1973. Their TV commercials also advertised not products but the company’s honest, clean image. SK’s founder, Chey Jong-hyon, added to the goodwill image by founding the Korea Foundation for Advanced Studies.
Lately, SK has been in the middle of a series of scandals, from fraudulent accounting to slush funds. SK and its executives are responsible for the crisis, but other businessmen are worried too. What is the minimum ethic for corporate social responsibility in Korea?

by Lee Se-jung

The writer is a deputy business news editor of the JoongAng Ilbo.