Family ties tightened at head of conglomeratesThe reshuffle at Samsung Group — which took almost two weeks and included promotions and the reorganization of its business portfolios — clearly shows Samsung Electronics Vice Chairman Jay Y. Lee has stepped up his responsibility and role within the organization.
With the end of the year closing in, it is becoming more apparent that the third and fourth generations of the founding families of major conglomerates, such as the Samsung heir apparent, are taking a bigger role within the organizations.
A study by conglomerate analysis provider CEO Score shows that the children of family-owned conglomerates join the family business at an average age of 28 and are promoted to the executive level in an average of 3.5 years.
“Their connections overseas and their creative young minds are expected to find new growth engines for many of the conglomerates under such difficult times,” said an industry insider who requested anonymity. “But at the same time, there are concerns over these young executives about their abilities, since they haven’t gone up the [promotion] ladder through the proper channels.”
One of the companies undergoing a generational change is Hyundai Heavy Industries, which promoted Chung Ki-sun, the son of Chung Mong-joon, who is Asan Foundation chairman and the biggest stakeholder of the heavy industries company. The junior Chung was promoted from managing director to senior managing director even though he is only 35 years old.
Chung Ki-sun now holds the record for being the youngest executive within Hyundai Heavy Industries and the fastest promotion from managing director to senor managing director.
The young executive, who is the grandson of late Hyundai Group founder Chung Ju-yung, has risen to the top quickly considering he only joined the family company six years ago.
After graduating from Yonsei University majoring in economics, Chung Ki-sun joined the accounting department of Hyundai Heavy Industries in 2009. In August that same year, he left for the United States, where he earned an MBA from Stanford University. He then returned to Korea and worked as a consultant for Boston Consulting Group.
He only returned to Hyundai Heavy Industries in June last year and was given the position of general director of management planning.
The promotion of the young executive wasn’t the only change that took place at the nation’s leading shipbuilder. The company, which is suffering from huge losses caused by shrinking global orders and fierce competition with rivaling Korean companies, has promoted more young people to its executive roster.
Among the 57 people who were promoted to assistant managing director, the first level of executives, nearly half, or 28 people, were in their 40s.
GS Group is another major conglomerate in Korea that is undergoing a generational shift, with third-generation children taking the reigns of the family business.
GS Retail’s vice chairman, Huh Seung-jo, was the second-generation family member of the late GS Group founder Huh Man-jung. But he stepped down this year, paving the way for a third-generation management era.
In Huh Seung-jo’s place, his nephew Huh Yeon-soo took the position of GS Retail CEO.
GS Group Chairman Huh Chang-soo is himself a third-generation family member. This year, his son Huh Yoon-hong was promoted to senior managing director at GS E&C, introducing the fourth generation to the executive level.
Shinsegae Group, one of the country’s biggest retailers, is undergoing a similar transformation, as a female member of the family-owned conglomerate will be playing a larger part in the company’s management next year.
The retail conglomerate raised the profile of Vice President Chung Yoo-kyung to CEO to oversee the department store business. She is the daughter of Lee Myung-hee, the Shinsegae Group chairwoman and sister of Samsung Group Chairman Lee Kun-hee.
Shinsegae Group on Dec. 3 announced a large-scale reshuffle. The reshuffle involved 85 executives and included the promotion of the group’s president in charge of strategic management, Kim Hye-sung, to vice chairman.
Chung Yoo-kyung will be taking on more responsibility next to her brother and Vice Chairman Chung Yong-jin.
It took nearly two decades for the younger sister to earn her CEO title. She joined the family business as managing director of Westin Chosun Hotel in 1996.
Kim Dong-kwan, the eldest son of Hanwha Group CEO Kim Seung-youn and a third-generation family member, was also promoted from managing director to senior managing director.
Some relatives weren’t promoted but had their roles within the company expanded. Doosan Group Chairman Park Yong-maan’s eldest son Park Seo-won, vice president at Doosan’s ad agency affiliate Oricom, was also named senior managing director of the duty-free business that the conglomerate won recently.
As it was with Chung Ki-sun of Hyundai Heavy Industries, most of these children of family-owned conglomerates, who are now in their 30s and 40s, have been groomed over the years in preparation for the day they will join the family business. Many of these third- and fourth-generation offsprings have studied overseas and worked at consulting firms before joining the family business.
BY LEE HO-JEONG [firstname.lastname@example.org]
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