'LG sees progress in changing management style'
LG Group Chairman Koo Kwang-mo, front row third from left, poses with participants at the LG Tech Conference at LG Sciencepark in Seoul, Feb. 13, 2019. / Courtesy of LG Corp.
By Baek Byung-yeul
LG Group Chairman Koo Kwang-mo is urged to show more leadership to build synergy between group affiliates to push boundaries and enhance overall competitiveness of the country's fourth-largest conglomerate in terms of total assets, industry officials said Thursday.
It has been two years since Koo took the helm of LG in June 2018. Under his leadership, LG is seeing visible progress in changing its business management style, which has long pursued stability over change. But officials added while Chairman Koo is managing the group quite well on multiple fronts, it would be a bonus if he shows a more “follow me hard” managerial style given top-down corporate culture is still prevalent here.
Under the new leader, LG Group has been accelerating its efforts to strengthen businesses with high potential and boldly close down what the group believes are “unprofitable and unsustainable” businesses.
LG Chem, a chemical and battery-making unit of the group, has been heavily investing in battery cells and packs for electric vehicles (EVs), which have been dubbed the “second semiconductor industry.”
Thanks to its efforts, LG Chem rose to global leadership in the EV battery business, edging out Japan's Panasonic and China's CATL in the first quarter of 2020. The affiliate has the largest market share in the global EV battery business, supplying its battery cells to leading ca manufacturers including Hyundai, GM, Volkswagen and Mercedes-Benz.
The battery arm also recently decided to sell its LCD polarizer business unit to a Chinese maker in a bid to use the money from the unit sale for its vehicle and EV battery businesses.
However, the country's top-tier business group has to address all outstanding issues related to its display affiliate LG Display, some industry officials said. LG Display has been concentrating on lucrative OLED panels after it was directly hit by the industry's oversupply of conventional LCD panels as Chinese rivals flooded the market with cheaper products. The company planned to mass-produce OLED panels at its Guangzhou factory in China in the first quarter of this year, but it could not meet the schedule due to the virus outbreak.
Chairman Koo is changing the way of work at companies by actively adopting digital technologies, according to LG. Its affiliates are accelerating their digital transformation efforts to deliver innovative products and services for customers.
“More than 50 percent of work processes will be conducted in a cloud computing environment this year and the figure will be over 90 percent in 2023. The digital transformation movement is led by LG Sciencepark, the group's research and development center,” a group official said.
Koo's “pragmatic” management style also has changed the corporate culture at LG. Since he took the top position, the group has joined the trend of skipping rigid formalities in a bid to let its employees focus on their essential tasks.
“Due to Koo's pragmatic management style, we could reduce unnecessary business practices, skipping the New Year's kick-off meeting. For this year's kick-off meeting, Koo delivered his New Year address via email to 250,000 employees across the world. Since 2018, almost every affiliate of LG also has been encouraging employees to dress less formally as well,” the group official said.