Growth index puts companies in check

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Growth index puts companies in check

The Commission on Shared Growth for Large and Small Companies announced the 2011 shared growth index for the country’s 56 large companies for the first time yesterday. The 56 companies were put into four categories: excellent, good, average and improved.

The commission personally surveyed executives of 5,200 contractors of the 56 companies in November and December.

“The purpose of the shared growth index is to promote effort throughout industries, but not to rank large companies,” Yoo Jang-hee, chairman of the commission, said during its 16th meeting at the Palace Hotel in southern Seoul. “The index is to evaluate how well large companies are following through on their promises.”

Hyundai Motor, Kia Motors, Posco, Samsung Electronics, Samsung Mobile Display and Samsung Electro-Mechanics were deemed “excellent.”

Some 20 companies including Daewoo Shipbuilding and Marine Engineering, Doosan Infracore, Lotte Shopping, LG Electronics, E-Mart, LG Chem, LG Display and Samsung Heavy Industries received a “good” classification, while 23 companies including Daelim Industrial, SK Hynix, GS Caltex, KT and S-Oil were “average.”

Dongbu, Hyundai Mipo Dockyard, Hanjin Heavy Industries and Construction, Hyosung, LG U+, STX Offshore and Shipbuilding and Homeplus were in the “improved” category.

“The shared growth agreement signed between large companies and their contractors is only the beginning and if they do not act on it, they will be criticized for doing a one-time event,” Yoo said.

The commission said those in the “excellent” category will be exempt for one year from the Fair Trade Commission’s probe into how they treat their contractors. They will also be given advantages when they apply for government projects. However, there will be no disadvantage for those in the improved category.

“They are still better than other firms not taking part in the shared growth agreement,” the commission said in a statement.

“With the announcement, businesses are subject to criticism,” said Lee Seung-cheol, a senior executive at the Federation of Korean Industries. “The evaluation needs to be changed in a way that praises companies that are successful in shared growth effort.”
By Limb Jae-un [ ]

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