Published : 2013-12-20 20:01
Updated : 2013-12-20 20:01
Barring the unexpected, Hwang Chang-gyu, a former Samsung Electronics semiconductor veteran, will be installed as new chief executive officer of KT, the second largest mobile service operator in the nation, next month. Few would say he is unqualified, with his management skills having already been proven. Still, he will have so many obstacles to overcome during his three-year term in office.
When it picked Hwang, now a university professor, as the next KT chairman on Monday, the CEO selection committee said it gave high marks to his vision for reinvigorating the crisis-ridden mobile carrier and the strategies he offered to turn his vision into reality. It added his capacity for organizational streamlining and his global-mindedness were also taken into account.
KT is in crisis, as the selection committee acknowledged. First of all, its business environment is rapidly worsening, as witnessed by a steep cut in its operating income. Last year, its operating income plummeted 30.6 percent from the previous year. Moreover, KT, which was late in entering the new LTE market, will have to fight an uphill battle against its two rivals.
Against this backdrop, Hwang will be put under mounting pressure to expand its market share and increase its profits. But it will not take long before he finds that the main obstacle is KT’s bloated organization ― a legacy from its time as a nationalized company.
KT, which was privatized in 2002, has 31,750 people on its payroll, more than five times the combined number of employees of its rival, SK Telecom, and its subsidiary, SK Broadband. KT will not be able to compete effectively with SK Telecom unless it is made lean and mean. No wonder, its CEO selection committee looked for a person capable of restructuring the organization when it was screening CEO candidates.
While overcoming the challenge he will face in pushing for organizational restructuring, Hwang will also have to “raise the value of the company,” as the selection committee put it. He will require the kind of managerial acumen that he demonstrated when he was president of the semiconductor division of Samsung Electronics in 2007-08. He was given due credit for catapulting the chipmaker into world renown.
Another problem that lies with KT is that, though it was privatized long ago, it is still heavily under the influence of the government, as evidenced again by the ouster of Lee Suk-chae from the post of chief executive officer in November.
Despite a long list of vaunted credentials as a corporate manager, he will be suspected of taking the KT helm with the help of the Park Geun-hye administration. He will also find it difficult to turn down recommendations for top executive posts by the ruling Saenuri Party and politicians close to President Park. This surely is a difficulty for him.