Shinsegae chairman to receive history lesson over 'Tank Day' fiasco

Protesters in Gwanghwamun Square in central Seoul condemn Shinsegae Group Chairman Chung Yong-jin for his lack of apologetic commitments following Starbucks Korea's "Tank Day" marketing debacle last month, demanding a shutdown of the cafe chain in Korea, May 27. Yonhap

Shinsegae Group Chairman Chung Yong-jin will sit for a “history lesson” after the conglomerate’s Starbucks Korea rattled the country last month with its controversial “Tank Day” tumbler marketing campaign, which caused an outcry among the public and victims of the bloody crackdowns on key pro-democracy uprisings against a military junta in the 1980s.

Shinsegae said on Monday that Chung will sit for a lecture on June 24, together with presidents of the group's nearly 50 subsidiaries. The lesson will be in two parts, covering historical consciousness and social sensitivity, delivered by professors from Sungkyunkwan University’s departments of history and sociology.

Executives of Emart, which runs Starbucks Korea operator SCK Company, will hear the same lectures on Wednesday. Shop managers and store employees of more than 2,110 Starbucks cafes in Korea will hear it on June 22.

To accommodate the class simultaneously for the cafe employees nationwide who number roughly 23,000 in overall, the company will close all Starbucks locations at 3 p.m. and play a recorded video of the lesson from Wednesday. The brand has never closed early here since it first opened in the country in 1999.

Shinsegae said the decision reflects the gravity of the recent issue and its determination to prevent similar incidents from recurring.

“This history lesson fulfills Chung’s pledge to receive a history education himself, while solidifying the executive leadership's resolve to accept full accountability,” Shinsegae said in a statement. “This lesson serves as an opportunity to reposition Shinsegae as a socially healthy enterprise that prospers together with the nation.”

But it remains to be seen how the lesson will affect the conglomerate — not only in terms of businesses but also public reception. Ahn Chong-ki, research professor at Korea University’s Institute for Research on Labor and Employment, said it takes time to establish a sense of “truthfulness" for a company and that it cannot be create instantaneously through a single event.

Shinsegae Group Chairman Chung Yong-jin bows in apology for Starbucks Korea's "Tank Day" marketing at Josun Palace Hotel in Seoul's Gangnam District, May 26. Korea Times photo by Shim Hyun-chul

“What will matter is their course of action in the future," Ahn said.

"If I were Chung, I would step forward and share with the public what I learned in the lesson, what social contributions I will make in the future and how the lesson will alter our businesses. Such updates will have to continue in a consistent manner to show the chairman isn’t simply trying to escape blame but is actually determined to do something."

The professor said private companies must transparently share their values and show respect to market participants and consumers to secure their standing.

“What private capital can do to express their values is to make certain commitments for socially or publicly shared goals in a sustainable fashion. That will show the companies have delivered their truthfulness to their consumers,” he said.

Chung's planned history lesson comes after Shinsegae said last week that it will appoint Chung as the new co-CEO for Emart and its property development subsidiary, Shinsegae Property. The move reflects the chairman's tighter grip over the group's businesses, including Starbucks. The appointment will be on the table during the group's annual leadership reshuffle later this year and finalized through a shareholders' meeting next year.

Shinsegae said it will revamp its system of approval for business plans to prevent a similar marketing controversy from happening in the future. The conglomerate admitted the fiasco occurred because none of the SCK executives in the line of approval noticed the risk in the marketing.

A new checklist of “social sensitivity” will be newly introduced to the system to find any possible connection of a planned business to the country’s history, holidays, politics, military, disasters, gender, violence and discrimination, Shinsegae added.