Family-controlled South Korean conglomerates are seeking out new growth models to replace their conventional competition-driven growth formulas, amid public calls for economic reform.
The shared value creation model that CJ Group is exploring is one such effort.
CJ is Korea’s 14th-biggest conglomerate in terms of assets, and its core businesses include food, retail, media and entertainment.
“The group adopted ‘creating shared value,’ or CSV, as a core management strategy in November 2013, on the 60th anniversary of the group’s foundation, as a part of its plans to pursue sustainable growth,” said Min Hee-kyung, executive vice president of CJ Corp., in an interview with The Korea Herald.
Min is currently directly in charge of CSV, and her department was the first such organization in corporate Korea to formally embrace creating shared value as the key to its social contribution strategy.
“Unlike corporate social responsibility or philanthropy, CSV, an idea that was proposed by management guru Michael E. Porter, pursues economic success by creating value for society,” she said.
“As society becomes more transparent on the back of development of information and communications technology, it is getting increasingly difficult to generate profit relying on traditional sales and marketing methods. This is why CJ is exploring CSV as a new growth model.”Shared value in action
CJ has already developed a number of CSV projects on a group level, targeting opportunities to improve business as well as the situation of society’s underprivileged.
For instance, CJ O Shopping, CJ’s cable TV home shopping channel, runs a “co-existence” program with small and medium-sized companies that are competitive but lack marketing and sales resources.
CJ O Shopping does the marketing for these SMEs so that they can focus on manufacturing.
“These programs also are run on a global basis,” Min said. Partnering with the state-run Korea International Cooperation Agency, CJ Corp. launched a project to develop an agricultural village in Vietnam by transferring advanced farming technology. In return, CJ has secured a food supply channel in Vietnam.
CJ also prides itself on being a leading exporter of Korean cultural goods ranging from food to film, and the group has heavily invested in educating Korean talent in artistic and cultural fields.
Her department has further strengthened tours and programs for the foreign community to experience Korean culture.
“I think CSV will be well-established within the group as a core strategy,“ said Min.
Before joining CJ in 2011, the executive was responsible for promoting investment opportunities in the Incheon Free Economic Zone to the world as director general. Before that, she served in several executive roles in the financial sector, working in cities such as New York, Tokyo and London.
By Seo Jee-yeon (firstname.lastname@example.org