By Cathy Rose A. Garcia
SK Group has grown and developed into the third biggest conglomerate in Korea, in large part due to the SK Management Systems (SKMS).
SKMS has played a little known but critical role in the growth and development of the SK Group in the past and will continue to drive its growth in the future.
The value of SKMS was once again emphasized during a seminar attended by SK Group Chairman Chey Tae-won and top executives of SK Group units in Jeju last Oct. 5 to 8.
At the seminar, SK’s top executives discussed business trends for 2011, and confirmed the importance of people and SKMS as crucial keys for the future growth and development of the company. Through active use of SKMS, the company should be able to improve and build a stronger corporate culture, as well as effectively manage and foster core members.
``SK will evolve and develop based on its corporate culture and human resources. This is an important matter as SK gradually rises to become a global company,’’ Chey Tae-won said.
From a small enterprise based in Suwon, SK Group is now the third largest conglomerate in Korea and the 86th biggest among global companies.
In 1979, many companies were struggling because of the oil crisis, but SK Group was already looking towards the future, rather than dwelling in the current crisis.
At that time, SK founder Chey Jong-hyun said, ``SK must be a world-class company by 2000, and therefore a system to raise its management and human resources to world-class standards is necessary. In order for SK to endure any crisis, there must be a strong corporate culture.”
SKMS was conceptualized and implemented as a new practical management system in 1979, focusing on building SK businesses and developing its human resources.
``Most theories and knowledge on management are from foreign resources. Application of these principles in the Korean business culture is not easy. Thus, it is necessary to develop a unique, Korean-style management system,’’ Chey Jong-hyun said.
The management system aims for the vertical integration of its business processes and for the creation of a world-class management system in order to become a global company. The management philosophy is described as people-centered, rational and realistic.
SKMS reflects Chey Jong-hyun’s belief that the key in corporate management is the people, and the development of the company is directly connected with the development of each employee. This was at a period when many businesses did not pay attention to improving workers’ motivation and capabilities, but Chey Jong-hyun proved to be well ahead of his time.
``People determine the quality of the work,’’ the SK founder said.
In surpassing the level of the world’s most outstanding companies, SK set its eventual goal to ``Super Excellent” (SUPEX), the highest level to be achieved by workers.
The success of SKMS can be seen with the SK Group’s achievements, such as its successful shift from a polyester fabric business to a petroleum business in 1980.
After the SUPEX philosophy was applied in 1989, SK overcame many struggles to succeed in the telecommunications field, when it took over Korea Mobile Telecom (now SK Telecom) in 1994.
``While global companies were only concentrating on survival in the oil crisis about 30 years ago, Chey Jong-hyun saw the necessity for devising a unique management system and principles at SK. SKMS is valuable because the system blended with the distinctive Korean corporate culture,’’ said Kanan Ramaswamy, a business management professor at the Thunderbird School of Global Management in Phoenix, Arizona.
Now, Chey Jung-hyun’s son Chey Tae-won is continuing his father’s vision for SKMS, which will propel the conglomerate to further success in the global market.
Since 1979, SK Group has continually modified its management system to keep up with global trends. It also established the SKMS Institute, Korea’s first research institute of business management systems, which is now in its 31st year.
``SKMS is SK’s vital power, and SK’s vital power comes from SKMS. It is necessary to increase the vital power for the company’s continuous development, and therefore the evolvement in SKMS is required,’’ Chey Tae-won said.