By Jane Han
Staff Reporter
SK's management credo, which helped power the company's growth from a textile manufacturer to an industrial conglomerate in three decades, has recently been recognized by a U.S. professor.
Kannan Ramaswamy, a professor at the Thunderbird School of Global Management, highlighted SK's Management System (SKMS) as a set of principles that are the bedrock on which the company stands today.
SKMS, a philosophy introduced by former SK Chairman Chey Jong-hyun, is equivalent to Johnson & Johnson's ``Our Credo'' and Toyota's ``Toyota Way.''
Ramaswamy said that three decades ago many South Korean companies were struggling from survival in the face of the oil price shock that shook the world.
But against an unfavorable backdrop, Chey forged the core set of management principles and values to begin spreading the company's wings.
``Chey recognized a very important truth about competitive positioning and sustainable advantage,'' said the professor. ``If a company aspires to be among world leaders, it would be best not to rely on other organizations as a source of best practices. It had to shape its own.''
He explained that South Korean firms were at that time fashioning systems that replicated the successes of leading companies from the Western world, but SK took a dramatically different route.
Ramaswamy highlighted three key characteristics of SKMS that differentiates itself from other management credos.
First, the system articulates clearly the guiding principles that offer a roadmap for decision makers, he said, exemplifying SK's pursuit of all actions to enhance the happiness of stakeholders.
``This intent has very explicit implications for the way in which the company recruits, trains and deploys its people,'' said Ramaswamy, who stressed that such a clear and precise sense of direction guides leaders and employees when confronted with competing priorities.
He said SKMS is also unique in that it contains living values that are transmitted across generations.
``Contrary to many firms that have a set of values that seem to have lost their relevance in the current context, SK has been able to groom and nurture its core SKMS principles and values to stay relevant,'' he said.
The third difference SKMS boasts is its unifying code of conduct for globalization efforts, Ramaswamy said.
``SK provides a unifying vehicle that synthesizes an implementable code of conduct within the globalizing firm,'' he said, adding that leaders and managers find themselves in uncomfortable situations for having adopted a relative approach instead of the absolute approach to globalization that firms such as SK actively promote.