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KB&M ( Week3).ppt
- Количество слайдов: 39
Korean Business & Management: Korean Economy in the Early Growing Stage Week 3
We succeeded because our people devoted their enterprising spirits. They used the force of their minds. Conviction creates indomitable efforts. This is the key to miracle. Man’s potential is limitless. -Chung Ju-yung, The Founder of Hyundai Group- 2
The Purpose n Understanding of the beginning stage of Korean economy and Korean companies in the 60 s and 70 s - The early Korean entrepreneurs - Post-liberation emergence and growth (1945 -60) - The Boom years of 60 s and 70 s - Five largest business groups 3
1. The Early Korean entrepreneurs n After Japanese annexation in 1910, Korea Changed dramatically - Modern capitalism introduced including civil law code, property right, taxation systems n The formation of Korean firms, however, was Strictly limited 4
1. The Early Korean entrepreneurs n n Japanese owned companies accounted for no less than 92 percent of the and 97. 1 percent of Korean companies during the Japanese occupation Despite the Japanese economic oppression, new class of Korean entrepreneurs emerged 5
1. The Early Korean entrepreneurs n n Park Hung-Sik was one of the first Korean entrepreneur who established trading companies, Whasin retail company Kim Song-Su also one of the first Korean entrepreneuer who established Kyongsong Textile company 6
1. The Early Korean entrepreneurs n Park Hung-Sik & Kim Song-Su were introduced and enhanced employment training programs, internationalization strategy, and achieved economies of scale and diversification of their companies n Park & Kim instilled strong mindsets of entrepreneurship and search for new business opportunities 7
Park Hung Sik (1903 -1992) 8
Kim Sung Su (1891 -1955) 9
2. Post-liberation & Growth(194560) n Post-liberation and post-war (1945~) created economic boom - First, the boom was due to the access to Japanese industrial leftovers, which were more than 30% of whole Korean assets & the Japanese businesses were sold at book value to the market - US gave huge reconstruction aids (more than 15% of Korean GDP and 80% of Korean foreign exchange) 10
1~3 th President Rhee Sung Man (1875 -1965) 11
3. The boom years of 60 s & 70 s n n New Government by President Park Jung-Hee at 1961 introduced new policies and five year economic plans Under Park regime promoted export-driven policy and strategic industries (heavy, assembly, petrochemical, non-ferrous metals, machinery, shipbuilding, and electronics) 12
Demonstration against corru[tion of Rhee government (Spring 1962) 13
5~9 th President Park Jung Hee (1917 -1979) 14
18 th Current President Park Keun Hye (1952 - ) 15
Military Coup by General Park (May 16, 1961) 16
3. The boom years of 60 s & 70 s n (Cont. ) New Government took the strong initiative for economic promotion by selecting and empowering competitive companies -Rather than personal ties and relationship, organizational capability became more important to receive government supports -Lots of Korean large firms (Chaebols) disappeared and new ones emerged 17
3. The boom years of 60 s & 70 s n (Cont. ) Korea experienced huge economic success and development during 60 s and 70 s -GDP per capita increased from USD 79 in 1960 s to 1, 597 in 1980 n Companies strongly favored by government grew rapidly -Those firms increased their revenues by more than 50% per year 18
3. The boom years of 60 s & 70 s n (Cont. ) Two major reasons for rapid growth of Korean economy and companies -external factors: Financial and technological aids from US Renew the diplomatic relationship with Japan (1965) -Internal factors: High education & skill level Confucian culture 19
3. The boom years of 60 s & 70 s n (Cont. ) Rapid growth of Korean economy changed the nature of Korean large companies (Chaebols) -Extreme diversification -Cheap loan -Less vertically integrated than their int’l counterparts Renew the diplomatic relationship with Japan (1965) -Too much focused on manufacturing and international trade for final products, ignoring key components 20
4. The Five Largest Business Group n Some of the five largest business groups were born in 1960 s -The leading firms created were: • Samsung Group, • Hyundai Group, • LG Group, • SK Group, • Daewoo Group 21
4. The Five Largest Business Group (Cont. ) n Samsung Group -The largest Korean business group - Started with sugar manufacturing business in 50 s - Expanded its businesses by being selected from the government as strategic industry group (i. e. , fertilizer manufacturing) - Started electronic good business in 1969 with the joint venture of SANYO, the Japanese competitor -Started semiconductor business in 1977 22
Lee Byung Chul (1910 -1987) Founder of Samsung Group 23
Samsung Group, then & now (1939) (Now) 24
Samsung Group 25
4. The Five Largest Business Group (Cont. ) n Hyundai Group -Started as car repair shop followed by engineering company in 50 s - Started growing rapidly in 50 s by doing the construction project of US military - Played the key role in building first Korean highway in 1967 - Started diversification into car and shipbuilding business in early 70 s 26
Chung Ju Yung (1915 -2001) Founder of Hyundai Group 27
Lee Byung Chul, Founder of Samsung Group 28
Hyundai Group 29
4. The Five Largest Business Group (Cont. ) n LG Group -Started cosmetic and consumer product in 1947 -Further diversified into petrochemical, petroleum processing, communication equipment and electronic wires in 60 s -Diversified further into machinery, instruments and insurance in 70 s -Well known Korean company for its entrepreneurial and risky decision 30
Koo In Hwoi (1907 -1969) Founder of LG Group 31
LG Group 32
4. The Five Largest Business Group (Cont. ) n SK Group -Started as a textile business in 50 s -Entered into trading, chemical and construction business in 70 s -Experienced big momentum after acquiring oil refinery company(Yukong) in 80 s -Well known company for aggressively acquiring other non -related businesses 33
Chey Joing Kun (1923 -1973) Founder of SK Group 34
SK Group 35
4. The Five Largest Business Group (Cont. ) n Daewoo Group -Founded in 60 s as export and textile company -Rapid expansion in 70 s accounting for 40% of Korean textile manufacturing -Close tie with government support and aids -Diversified aggressively into shipbuilding, automobile, machinery etc. during 80 s. -Pursued the most aggressive growth strategy -Bankrupted during the Asian financial crisis (1998) -However, the founder (Kim Woo Jung) is the symbol of Korean entrepreneurial spirit and global challenge 36
Kim Woo Jung (1923 -1973) Founder of Daewoo Group 37
Daewoo Group 38
5. Synthesis: The Emergence of Korean large companies n n n Emergence of entrepreneurs Taking advantages of new opportunities after the liberation (1945) Aggressive expansion strategy backed by Korean government and hard-working Swift relocation of human and technological resource across business activities However, corruption, heavy debts and moral hazard remained 39
KB&M ( Week3).ppt