January 09, 2015 13:16
The children of big business owners usually join the family firm before they are 30, and within three years they have reached a top position, a study shows. That is faster than the four years it usually takes for an ordinary employee to rise to the position of assistant manager.
Nine of the 32 chaebol heirs surveyed became executives as soon as they joined the family business, and four rose to that position in just one year.
Some of them did have prior experience managing venture companies they set up themselves, but most of them were just catapulted to executive positions without any work experience. In other words they were promoted because the qualifications were literally in their blood.
This has led to endless incidents that cast doubt on their suitability. They are often spoiled and rude and have a dreadful sense of entitlement. The "nut rage" that seized Korean Air heiress Cho Hyun-ah was only the most high-profile reminder of this perpetual problem.
There are plenty of family-owned businesses in advanced countries, but the scions there undergo rigorous training and must prove their abilities first. Only a small handful are actually allowed to take part in managing their family-run companies.
The Wallenbergs of Sweden, for example, avoid public displays of conspicuous wealth and require their children to serve as naval officers and study abroad without financial assistance from their wealthy parents in order to qualify for management positions in their family-owned businesses. In fact, most global conglomerates, including Toyota, allow only offspring who have proven their abilities.
Korea's conglomerates must shake off their outdated hereditary practices. Such a corporate environment only brings disgruntlement among staff and hinders growth. The scions of conglomerates should be allowed to take part in management only after they prove their abilities.
Chaebol families must realize that hereditary succession of management control can severely damage their business and in the worst case drive it to bankruptcy.
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