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The third generation is coming under a growing spotlight in South Korea's family-owned conglomerate sector as heirs apparent of the incumbent chairmen and grandsons of the late chaebol founders.
The second generation business leaders such as Samsung Electronics chairman Lee Kun-hee and Hyundai Motor chairman Chung Mong-koo have successfully carried out power transitions to their sons over the past few years.
Chung Yong-jin, a son of Samsung founder Lee Byung-chull’s daughter, opened the third-generation era when he was appointed vice chairman of Shinsegae Group in 2006.
Chung Eui-sun, a grandson of Hyundai founder Chung Ju-yung, and Lee Jay-yong, a grandson of Samsung founder Lee, joined the move. The junior Chung and Lee were promoted to vice chairmen in 2009 and 2012, respectively.
The three heirs in their 40s have deeply involved themselves in their groups’ decision-making processes.
Most of all, Samsung Group’s recent promotion of Lee is drawing wide attention from the global IT industry over policies at the conglomerate’s flagship Samsung Electronics, the world’s largest cell phone maker.
A group executive said that the 44-year-old vice chairman has made great contributions to the sectors of smartphones, TV, semiconductors and displays in terms of securing the No. 1 position in the businesses in the global market.
“As vice chairman, he will take on bigger roles in management of the overall businesses of the electronic behemoth,” said the executive.
Lee gained plaudits in September when Samsung Group officially announced that it signed a strategic partnership with Hong Kong’s Li Ka Shing, chairman of Cheung Kong Holdings.
Cheung Kong Holdings is the flagship unit of Cheung Kong Group, and Li is Asia’s richest man, ranked the ninth richest man in 2011. He also owns Hutchison Whampoa.
The meeting, which took place at the Cheung Kong Group headquarters in the central district of Hong Kong, was presided over by Lee Kun-hee and Li.
But Lee’s heir apparent, Jay-yong, is said to have played a huge role in leading the two major Asian conglomerates together for better business.
After graduating from Seoul National University, Lee started his career at Samsung Electronics in 1991 as part of a carefully drafted plan to groom him into the future heir of Samsung Group, which accounts for nearly one-fifth of the nation’s gross domestic product. He completed an MBA at Keio University in Japan and attended Harvard Business School.
Chung Eui-sun, Hyundai Motor vice chairman and Kia Motors president, was named a standing director of Hyundai-Steel.
According to Hyundai spokespeople, their direct involvement in the subsidiaries is aimed at enhancing responsible management.
“Construction is one of the three core sectors of our group, along with automobiles and steel,” a spokesman said. “Chairman Chung’s taking on the standing director’s role is designed to carry out responsible management.”
From 2005 to 2009, Chung was the president of Kia Motors Corp., a subsidiary of Hyundai Motor Group.
He received a bachelor’s degree in business management administration from Korea University and a master’s of business administration from the University of San Francisco School of Business.
Future business policies of Lee of Samsung and Chung of Hyundai could be the barometer of the nation’s conglomerate sector.
There are predictions in the market that Lee and Chung could seek a strategic partnership in the car-oriented semiconductor business in the coming years. The two figures have already built a close relationship.
“As the first step, over the coming year or so, we will prioritise the development of 100-per-cent unique technologies for the automobile semiconductor through our tech affiliate, Hyundai Autron,” a Hyundai Motor executive said.
“Apart from holding technologies, another key issue is to secure the capacity of mass production,” he said. “It is undeniable that Samsung Electronics’ large-scale assembly lines are attractive to us.”
A Samsung executive said it was not easy to forecast the future business at the present stage.
“(Mass production of car semiconductors for Hyundai and Kia) may be possible. We, however, believe it is entirely up to top-ranking decision-makers (including vice chairman Lee),” he said.
Shinsegae, headed by vice chairman Chung Yong-jin, distinguishes itself from the pack by bringing in the world’s best before its rivals, Lotte and Hyundai department stores.
It opened famed US gourmet grocery store Dean &DeLuca in its Gangnam branch in Banpo-dong, southern Seoul, last September, and its separate retail entity Boon the Shop is on the must-see list of every fashion-conscious tourist and Seoulites, too.
Chung started at the retailer after his mother, Lee Myung-hee, put him in charge of day-to-day management. He allows employees to wear jeans and T-shirts to work.
He also set up a college fund for the children of retired employees. Once one of Korea’s top tweeters with more than 110,000 followers, he has now closed his Twitter account but stays active on Facebook.