In His Own Way

Dongbu Group Chairman Kim Joon-ki lauded for his unique style of management to build a business empire; Dongbu's annual sales exceeds 10 tln won

Dongbu Group is unique in many ways from the other conglomerates in its management policies, especially in personnel policies. The group has been recruiting its management officers from section head level and up to top executives from outside the group, which is a practice unusual in the corporate community in the country. The number is not limited to a few, but in droves. The group has so far hired over 50 high-level officers from outside the company in recent months. They were employed by such group affiliates as Dongbu Steel, Dongbu Construction, and Dongbu Life Insurance, key companies in the group and they have been assigned to key positions in the companies such as strategic planning, finance, management reform, marketing and technology.
The group's personnel policy to hire away managerial level people from other companies, especially Samsung Group. Furthermore, they have been put in charge of key positions in affiliate companies.
Dongbu Chairman Kim holds such a high regard for Samsung people, in particular, the group's management system, although he respected Hyundai Group founder Chung Ju-yung for his daring business style and progressive attitudes. But as time passed he began to watch Samsung Group Chairman Lee Kun-hee's management style and impressed with Samsung's systematic management system. He said Samsung Group is being managed well, although the chairman spends long time abroad for business, including the International Olympic Committee(IOC) as he is a member. He wondered that it was the system that runs the group not depending on the chairman's individual effort and has decided to introduce the systematic management system in his group, too. The chairman often said Samsung is the only Korean company, which is ranked tops in the world and successfully build system management system and he needed former Samsung executives to help install Samsung management style.
The system management style never allows the group's operation swayed by the top boss because it is run by a system and the Dongbu chairman's management philosophy won many friends in the business community and has become a good model to follow by other business groups.
It was natural that the number of former Samsung managers recruited by Dongbu increased in the process of the introduction of Samsung management system. About one third of Dongbu executives are former Samsung men.
The group went through many ups and downs in the process of boosting its total annual sales to 10 trillion won.
In 1974, when the group first try to win projects in the Middle East, it made many mistakes in tendering its bids. At times, its winning bids were too low to make profits to the point that a number of its employees became so desperate that they thought about suicide. They continued to try to hang on and try to win projects come shine or rain and they finally succeeded in winning big projects including the Riyad International Airport project in Saudi Arabia. Earning oil money helped the group to expand into other areas of businesses including finance, electronics, and steel.
Dongbu Group celebrates its 37th year of operation this year.
Chairman Kim managed the group to boost its total sales to 10 trillion won a year without the help from any one including his late father Jin-man, a former vice speaker of the National Assembly. The feat was so great that his late father in his death bed in hospital told his son that he was success. The chairman was so sad at times that it was the last word from his father. But like his father said the son was such a success as a businessman. He started his empire-building venture with only 25 million won to set up the Miryung Construction Co. in 1969 and no one had any idea that the company would expand to be a group with many affiliates.
The chairman often says that they should learn from America's pioneering spirit and its energy. America is the nation built by emigrants He believes that the emigration spirit recognized diversity, which is why Dongbu is open to outside recruitment of its managers. The pioneering spirit is progressive culture, which shows Dongbu is full of vibrant energy, doffing off its stale conservative image.
Dongbu Group has now been working on management strategy for the second half of this year. The group plans to foster its affiliates in five areas of business, including raw material, chemical, construction, logistics, finance and IT, to be leaders in each of their business fields by starting new business projects in search of futuristic growth engines. The group is focused on finding new business projects in the area of bio sector of semiconductor new material with its success in non-memory chip foundry and the Asan Bay plant of Dongbu Steel as a huge lesson. nw

Dongbu Group Chairman Kim Joon-ki