In recent consultations with small and medium-sized businesses, President Lee Myung-bak said the chaebol owner-centered style of management needs to be changed. He stopped short of specifying details of how to do so, but said they should alter their management style to favor co-prosperity with SMEs.
But it takes no genius to guess what message Lee wanted to get across to the business tycoons controlling Samsung, LG, SK and other business conglomerates, given his previous remarks and his administration’s recent policy statements. He was saying that top managers, who are at the owners’ beck and call, are seeking to maximize profits at the expense of SMEs.
His message was made clearer, given his administration’s policy of pushing business conglomerates to share their “excess profits” with their suppliers ― a policy that smacks of socialist economics. Big businesses, though irked by this policy, cannot complain in public for fear of retribution.
This is not to say Lee should abandon his lofty ideal of promoting SMEs as business conglomerates’ legitimate partners for co-prosperity. They should be encouraged to lay the foundation of growth now as suppliers to chaebol and join their ranks. As he said, the national economy would be exposed to a great risk if it were to depend on a handful of business conglomerates.
If his administration finds it necessary to rein in what it regards as chaebol’s runaway business practices, it will do well to do so within the realm of fair trade. It is of no use to complain that chaebol refuse to toe the line when they have gained so much from its business-friendly policy. It simply did what it was required to do when it launched the policy.
All the administration needs to do is enforce the statutory rules of fair trade strictly and, if necessary, strengthen them.