LGE Strategic Alliances and Human Resource Management
Chaebols is defined by business structures that consist of firms operating a diverse number of industries, but the group is controlled by a dominant family. The business group accounts for a large percentage of the economy – LG Electronics (LGE) is an example of one of this corporate structure. We will discuss how LG has impacted the South Korean economy as well as outline the positive and negative characteristic of chaebols and the South Korean economy. We will identify LGE’s human resources strategy, and how they deal with diversity. I will also explain one of LGE’s strategic alliance and its global objective.
The Organization and ...view middle of the document...
LG’s mission is to continue to create innovative and premium with an objective of becoming the top innovative electronics company in the world.
A chaebol is a firm controlled by a family with several affiliate firms operating in different industries with no separation of ownership and management. Founder families dominate and control the business. The business accounts for a large portion of that country’s national economy. According to (Einhorn & Kim 2014) chaebol, account for 85 percent of gross domestic product, and they employ only 13 percent of the workforce. The other 87 percent of the country’s workers are self-employed or work for small and midsize companies with much slower rates of growth. The management format of this business entity is a paternalistic style in which employees are expected to be extremely loyal and devoted to the company. Chaebol businesses are an integral part of the Korean economy and the business unit and government establish a relationship that is reciprocal.
Positive and Negative Characteristics of Chaebols for Local, Global, and South Korean Economy
Chaebols are successful because they import capital into the economy which has a positive impact on the global economy. They also simulate the marketplace by creating new products and developing new product lines for the economy. They foster an environment they embraces buying and merging corporations by establishing new domestic and international market places. Chaebols tend to avoid making decision to ensure the growth and long term state of the organization. Chaebol allow for swift decision making, is usually done from a long-term perspective, because decisions are made with long term strategies in mind. Chaebols create opportunities for employees to transfer into other affiliates positions. Chaebols have a diversified portfolio and large economies of scale and large investment pool.
Negative characteristics of chaebols are that management tends to make decisions for their own benefit and all other stakeholder interests are ignored. Chaebols often hinders innovation and creativity. Heightened risk because they tend to over-invest in declining economies in which causes them to have a higher debt to equity ratio compared to other business models. Negative decisions have a larger impact on the economy. Lack of core competencies, sabotages fair competition, and chaebols creates an atmosphere for monopolies to exist. This creates a market that discourages free and fair marketplace engagement. Chaebols also tend to foster injustice, influencing of governmental officials, as well as engaging in corrupt practices. Many view chaebols as a microcosm for fraud, corruption, price-fixing and competition damaging practices.
Chaebols has resulted in significant contribution to the economy with unprecedented development for the Korean economy. Chaebols still account for larger a portion of the country’s Gross Domestic product (GDP). Chaebols...