ed Anti-business sentiment

Tycoons aim at wrong target for their misdeeds

Sohn Kyung-shik, chairman of the Korea Chamber of Commerce and Industry and the chairman of the Presidential Council on National Competitiveness, has expressed concern over what he perceives to be rising anti-corporate sentiment. His concern is half-true, and he aims at the wrong target for corporate problems. Public sentiment turns negative against conglomerates, not small- and medium-sized companies.

The chairman claims the rising anti-corporate sentiment stifles entrepreneurship, which will become an impediment to honing national competitiveness. He argues that active corporate investment will create more jobs and power the economy.

He should have done extra homework before generalizing the anti-corporate sentiment. Many people, especially the jobless youth, sometimes vent frustration against the conglomerates. Despite their robust growth, technology-intensive business groups have not been aggressive in new hiring. Their growth has little trickle-down effect. In other words, chaebol's unprecedented prosperity and increase of their wealth have benefitted little the job seekers and consumers. Their boom widened income disparity and social polarization.

Statistics also don’t show that sentiment has worsened noticeably. The KCCI report shows that public perception of corporations had been improving from 2008 till last year. The index rose to 51.5 in the second half of last year, from 45.6 in the first half of 2008 and 54 in the first half of last year. The index fell slightly to 50.8 in the first half of this year.

Consumers are quite objective in grading companies. They gave high grades to firms for upgrading national competitiveness and productivity. Companies got low evaluations on ethical management and social contribution. The data shows that public judgement is not arbitrary, emotional and discretionary. The public points out what companies are lacking.

The chairman fails to understand that the lingering anti-chaebol sentiment is of the companies’ own making. They hire less, invest less, fatten pockets of families and drive out SMEs. They are not transparent in ownership transfer. It is, therefore, not correct to blame the public for the anti-chaebol sentiment. Conglomerates themselves should find the causes behind the negative feeling.

It is true that politicians went too far in bashing tycoons, including Cho Nam-ho, chairman of Hanjin Heavy Industries. They grilled Cho at a National Assembly hearing over massive layoffs. Lawmakers are trying to fan or exploit the anti-chaebol sentiment ahead of the elections next year.

It is true that conglomerates exploited President Lee Myung-bak's business-friendly policy. They did not make a corresponding effort to share the growth they achieved. The tycoons showed only greediness and mercantilism, with little care for additional hiring and social donation.

Conglomerates should not blame the public for the unfavorable sentiment. They must make efforts to win the hearts of consumers through ethical, transparent and responsible management. Tycoons should demonstrate the spirit of noblesse oblige, and shun away from emperor-like behaviors and practices. Conglomerates, especially stingy tycoons, are at the epicenter of the less-than-friendly corporate sentiment. They need to refrain from exploiting subcontractors and to seek ways of prospering together.