The Korea Herald is publishing a series of articles titled Global Brand as part of the first installment of Power Korea. Korea’s success story is a 60-year-old tale written by not one, but many who worked to build one of the world’s most powerful nations from the ashes of war. This Global Brand series is designed to honor those who made this Korean Dream come true. This is the 10th part of the Global Brand series. — Ed.
In 1896, amid the social and political upheaval of the late 19th century, the first-ever modern store opened in Seoul under the name “Park Seung-jik Store.”
This small miscellaneous shop, more than 100 years later, grew to be one of the nation’s top 20 conglomerates, as well as its oldest existing firm: Doosan Group.
In 1946, the family-run business turned a page by changing its name to “Doosan” and welcoming Park’s eldest son, Park Too-pyong, as the first official chairman.
Throughout its 117-year history, the company has had to make radical changes in its business portfolio to survive in the dynamic Korean society and in the global community.
Doosan has nevertheless been able to maintain its identity, thanks to its consistent focus on people, officials said.
The group’s management philosophy is largely represented by the slogan “2G,” which stands for a two-way growth plan ― growth of people and growth of business.
“This belief, that human resources growth and business growth are in a mutually beneficial relation, is a core intangible asset of Doosan,” said a company official.
Reflecting such culture, the group created a positive sensation in the advertisement industry last year with its catch phrase “People are the future,” a line which offered hope to the young generation in an era of unemployment.
Unlike other conglomerate leaders, Doosan’s top executives would actively participate in the group’s recruitment process.
Chairman Park Yong-maan, together with vice chairman Park Gee-won and Doosan Infracore president Kim Yong-sung, is often seen in recruitment sessions at universities.
Park, having taken office early last year to succeed his elder brother Park Yong-hyun, also introduced a new corporate philosophy he coined “the Doosan Way.”
“The family-centered management has many advantages, especially in terms of business continuity and communication,” he said last year.
“With the influx of the younger generation and the rise of foreign-national employees, however, I felt the need to reorganize Doosan’s corporate culture.”
Under the revised direction, the group’s century-long focus on people will remain unchanged, while a touch of open- and global-mindedness will be added, he explained.
The chairman is also one of the few top businesspeople who communicates directly with the public through social network service channels.
Park is well known among social networks for his unceremonious comments and colloquial attitude. Though he was often criticized for lacking dignity, his easygoing manners were considered to be consistent with his people-centric way of thinking.
Bold corporate restructuring
It took Doosan more than just its warm, human-based philosophy to grow from a miscellaneous shop to beer distributor to a total infrastructure-creating conglomerate.
The secret to the group’s survival and growth was the bold acting power of the new chairman, especially in corporate restructuring and aggressive overseas mergers and acquisitions.
Though he took the group’s helm through family succession, Park is considered the first as well as the best man of business to run Doosan.
Former chairman Park Yong-hyun had long been involved in the group’s management but, being a former medical professor, was not as fully devoted to the family business as his younger brother.
Park Yong-maan, on the other hand, joined the group in 1982 as a Doosan Engineering & Construction freshman and successively filled key posts in the conglomerate’s various subsidiaries.
“He may be a family-based conglomerate owner but knows the firm inside out, just as thoroughly as a management specialist would,” said a company official.
Park also established a unique precedent in Korean conglomerate history by aggressively leading the group’s restructuring and selling off its key business subsidiaries.
In the 1950s, Doosan enjoyed its golden days in the local liquor industry, after acquiring Oriental Brewery and expanding it into OB Beer. Ever since then, the liquor sector has been the conglomerate’s initiative business.
It also continuously expanded its business portfolio to construction, machinery and electronics as well as media and culture.
The 1997 financial crisis, however, was a turning point for Doosan to switch its business drive from consumer goods to capital goods.
In 2000, the conglomerate acquired Hankook Heavy Industries & Construction and then in 2001, sold its signature OB Beer, displaying its determination to move on to the infrastructure-building industry.
“Doosan’s history, moving from distribution to consumer business, and then on to capital goods and heavy industries, is in line with Korea’s industrial history itself,” said a company official.
“The bold decision and the timely changes were the key to our survival over the past century.”
Aggressive overseas-driven growth
Another characteristic of the family-owned conglomerate is its active drive in overseas mergers and acquisitions.
By acquiring leading infrastructure firms, including British engineering firm Bobcock and U.S. construction parts maker Bobcat, Doosan boosted its infra-building subsidiary Doosan Infracore to the world’s seventh-largest machinery enterprise.
The group’s sales grew eightfold, from 3.4 trillion won ($3 billion) in 1998 to 25.2 trillion won in 2011, according to officials. The overseas sales proportion, too, soared from 12 percent to 62 percent during the same period.
Encouraged by such achievements, Doosan is expected to maintain its research and development budget this year despite the ongoing economic slump. Especially, its heavy industries sector will increase investment in construction infrastructure such as excavators and other machine tools, in order to support the overseas construction deals, officials said.
The recruitment trend, too, will remain active. The group hired 2,100 new employees in the second half of 2011 and the level remained more or less the same last year, officials said.
“Most companies tend to hire less, owing to financial difficulties, but it is our firm and unwavering belief that long-term growth may never be achieved without the supply of innovative human resources,” the official said.
By Bae Hyun-jung (
tellme@heraldcorp.com)
