TonyMoly, a popular budget cosmetics maker in South Korea, has changed its CEO five times in a two-year period. The company said such leadership changes were made because CEOs had to resign for “personal reasons.”
However, the Korean cosmetics industry says without hesitation that such short-loved CEO terms at TonyMoly have been caused by inadequate communication and are worthy of becoming an object of ridicule in foreign media. The average CEO tenure was 5 years and 4 months. Former CEO Ho Jong-hwan abruptly stepped down only a month after taking office in January.
As a result, TonyMoly has been notoriously nicknamed “the graveyard of CEOs.” Though the company says CEOs resigned for personal reasons, few would buy that. The cosmetic industry and market watchers reckon that TonyMoly chairman Bae Hae-dong takes most of the credit for the internal turmoil. It has been rumored that chairman Bae, a self-made businessman, were rarely content with the work of professional CEOs.
Since Chairman Bae strongly believes that TonyMoly has come this far solely thanks to his “principles,” many say, he is unable to work side by side with professional CEOs.
Many think that TonyMoly having five CEOs in 2 years was caused by his own bigotry that my opinion is always right. His micromanagement is thought to have triggered professional CEOs’ departure from the company.
“Generally speaking, self-made businesspeople tend to be too confident that they don’t listen to the opinions of their subordinates. In other words, they opt for micromanagement whereby they closely observe or control the work of their subordinates or employees. Many point out that the chairman of TonyMoly is probably one of them.”
The long-drawn out internal tumult seems to have weighed down on TonyMoly’s business performance. When TonyMoly went public in July, it ambitiously said it would jack up its annual growth rate to 20 percent. However, its third-quarter sales rose 12 percent y-o-y to 57.1 billion won.
