Corporation leaders warn of grim economic outlook

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Corporation leaders warn of grim economic outlook

During a time of economic crisis, Korea’s corporate titans are calling on their companies to review policies, to adapt to “unprecedented” conditions and to innovate for the future.

The speeches are light on specifics, but from the typically reserved leaders of the country’s top conglomerates, their words point to an economy on the edge.

“Escalating difficulties caused by the new coronavirus are revealing that SK’s existing safety net is no longer valid,” SK Group Chairman Chey Tae-won declared in an emergency message sent to top executives on Wednesday.

He implored the companies’ leadership to refrain for simple “holding out” for a sunnier outlook.

“Old practices should be discarded. It’s time to start devising a whole new safety net … that leaves no organization or staff behind,” Chey continued. “I want every affiliate to review their practices and systems from scratch.”

Chey added a fundamental revision in the way organizations work and cope with business crises was essential, as a similar situation may happen again any time in the future.

For example, Chey ordered the conglomerate’s affiliates to accumulate data and research on the results of telecommuting, to allow it to become a regular practice in the future. SK ordered staff to telecommute as the virus outbreak became widespread in February.

Lotte Group Chairman Shin Dong-bin said the new coronavirus will bring “an unprecedented crisis.”

The country’s fifth-largest conglomerate had already established a task force dedicated to fighting the disease in mid-January. But the chairman, currently in Japan, summoned executives for an emergency video meeting on Wednesday.

“We’re already in a crisis, but it’s even more important that we properly cope with the situation once the peak is over,” Shin said. “With an unprecedented crisis anticipated ahead, transforming our business strategy is the only way for us to keep afloat.”

He called for a stable system in which its staff can fulfill their daily tasks and duties regardless of disruptions like the coronavirus outbreak. Affiliates were ordered to reconsider their business strategies, he added, in line with monitoring results of the fluctuating global economy.

Lotte expects the business impacts of the coronavirus will last through this year’s third quarter.

Samsung Electronics Vice Chair and the group’s de facto leader Lee Jae-yong set out for a morale-boosting trip to the Samsung Advanced Institute of Technology on Tuesday, the company’s main hub of science research.

Lee’s Tuesday message was centered on pursuing long-term research and development.

“It’s especially during difficult times that we have to thoroughly prepare for the future. Innovation is the only way we could respond to the public support,” he said during a meeting with the company’s research leadership. “This will be our big leap.”

On the same day, the Federation of Korean Industries, a business advocate group, held an emergency press briefing calling for additional support from the government to keep local businesses afloat.

“Our economy was already going through a list of difficulties before the virus struck. Now we’re facing an emergency situation even more severe than the financial crises in 1997 and 2008,” the federation’s Vice Chairman Kwon Tae-shin said.

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