LG Group Chairman Koo Bon-moo called on the group’s executives to push for “qualitative growth.” His remark seems to shift from the “crisis theory” that he has stressed since the beginning of the year.
LG Group expected an even greater crisis this year than the one it suffered a year ago, however, it has enjoyed an unexpectedly favorable business performance. Accordingly, LG Group’s management target in the latter half is expected to focus on becoming a market leader through solid management rather than just escaping from the crisis. At a seminar with the groups’ executives held at the LG Twin Tower in Seoul on July 8, Chairman Koo said, “We should pursue quantitative growth without fail.” Noting that clinging to growth without internal stability will not be helpful to their future, he stressed, “We should map out concrete plans and carry out them thoroughly and obstinately.”
Earlier in the year, Chairman Koo mentioned the crisis theory, saying “Managerial environment in the future is the crisis itself.” However, he put more emphasis on solid management than crisis at the seminar with executives, the first of its kind in the latter half, showing a somewhat different tone.
The background behind his remarks seems to stem from the fact that major subsidiaries of LG Group are enjoying a more favorable business performance in general. LG Electronics expects a turnaround into a surplus with its Mobile Communication (MC) business headquarters along with the market debut of its strategic smartphone G3 in the second quarter. The MC business headquarters, which posted a deficit for the third consecutive quarter, is making an attempt to escape from crisis. Thanks to the MC business headquarters, LG Electronics is likely to see an overall improvement in operating profit ratio.
The operating profit ratio of LG Electronics soared from 2.1% last year to 3.4% in the first quarter of this year. LG Chemicals, which leads the global market in petrochemical and secondary cell fields, succeeded in jacking up its operating profit ratio to 7.5% last year. Along with LG Display, LG Innotek is also expected to join the list of enterprises enjoying a 4% level in the operating profit ratio.
