A company with no "confidential money" used to bribe public officials, no "secret funds" and no internal "auditing office."

Editor of Weekly Chosun, Kwon Yong-kee interviewed Moon Kook-hyun, the CEO of Yuhan-Kimberly (www.yuhan-kimberly.co.kr) on January 3 and discovered the company has never recorded any loss since its foundation in 1970. Chief Executive Officer Moon expects this year to see sales-revenue reach W700 billion, a W100 billion increase over last year. The company recorded sales of W600 billion last year, of which 10% was net income.

Moon explained the company imported pulp to cover only 5% of its production while 95% was produced from re-cycled paper. Moon has played an active role in the "Forest for Life" (FFL) movement since 1983 and is called "Chief Environmental Officer" by his staff. His efforts for FFL are shown in the environmental group's catch phrase which was devised by Moon: Keep Korea Green.

It is no surprise that Moon adapted his self-created concept of 'environmental management' into Yuhan-Kimberly where waste of resources was reduced to a minimum and inputs are used more effectively. He argued that not many people were concerned about environmental aspects and how many companies operated only about 34% of their W10-billion equipments' capacity, because they did not run the machines at night or during the holidays. Moon realized that by not operating the equipments at full capacity, many Korean companies saw their debt ratio grow and their profitability remain low. A company could have great facilities but be low in efficiency.

The environmental chief stresses the importance of not discharging materials which pollute water and air. In order to implement this type of production, the system and process had to be changed. As a small example, Moon took the instance of digital printing technology, which produces excellent printed items without using a drop of water.

Moon is proud of the successful business re-engineering his company achieved, such as that of making streamlined regulations suitable for the new era and eliminating unnecessary ones.

Since 1993, the company adopted a 24-hour factory operating system where workers at the production sites work in a two shifts. The first shift consists of working for 12 hours during the day time for four days and then taking four days off (three days holiday and one day training). The second shift is working at night for four days and then taking four days off.

Moon said, "Even during the Asian financial crisis, we announced no layoff because more workers were needed for the two-shift system. The system is equivalent to the job sharing in Western countries. With free leasure time, the employees can study other languages like English and learn how to operate computer systems. All of the employees own a personal computer at home for which the company supported 70% of the costs. Most employees have fast connection to the Internet using ADSL (asymmetric digital subscriber line) modems. Most of my staff can make their reports in English and I encourage them to study further by supporting their post-graduate studies."

Moon strongly believes in the importance of learning, which can help his workers seek survival strategies in a rapidly changing business environment. In this manner, the employees maintain a high satisfaction rate and the outcome brought about higher productivity. The office workers are left free to decide when to come to work in the morning, between 7:30am to 9:00am. In order to implement this flexible working pattern, Moon stressed traditional fixed ideas should be reversed. He changed the working pattern and the management style.

Once noticeable difference from other Korean top managers is that Moon spends three or four hours a day for the environment movement. "The traditional way of management can be described as a kind of controlled management from the top. However, we now live in an era that needs information and knowledge oriented management, which can only be attained through decentralization. Most of decisions at Yuhan-Kimberly can be made without my approval. New employees can be recruited by the people who need the extra work force and I am only involved in direct management for exceptional cases. I put an emphasis on MBE (management by exception), instead of MBO (management by object)," Moon stated.

Speaking of financial decision making, Moon said "If an employee needs to spend W1 billion, he can make the decision for himself and he needs no separate instruction or approval at our company. This is possible because our business process is standardized and there is no possibility of corruption being involved. This is the reason we got rid of our audit office. We don't hold ceremonies to observe the inauguration of the company, instead, some employees plant trees, if they want to."

As a result of studying the new management trend in the U.S. during his one-year stay there in 1983, Moon adapted a matrix system for the company's organization. Under the CEO, the company has eight different business departments, such as household, women, infants, sanitation, and digital printing technology. These departments are operating with autonomous rights, having horizontal links.

When he was asked about the relationship with Yuhan's foreign business partner, Kimberly, Moon said there is only one foreign technical advisor working at the Kimchon factory; in other words, the foreign partner is confident of Korean partner's business capability. In fact, the equity of Yuhan-Kimberly is owned by Kimberly-Clark of Canada (40%), Kimberly Clark of the U.S. (30%) and Yuhan Corporation (30%).

Moon is proud of producing a wide range of products totaling 600 different items, based on three core technologies: fibre, non-woven fabric and absorbency. Yuhan-Kimberly has changed the word tissue to be called by the brand "Kleenex" and it introduced high value added items made of non-woven fabric, such as "wool spill" for absorbing spilled oil in the sea, head gears, masks and shoe covers used in clean rooms, and special protection outfits for protecting doctors against getting contaminated with the AIDS virus.

Personal Profile
January 12, 1949 Born
February 1972 B.A. in English Department, Hankuk University of Foreign Studies
February 1977 Completed Post-graduate Business Administration course at Seoul National University
July 1974 Entered the planning and coordination office of Yuhan-Kimberly
February 1978 Chief of IT department, Yuhan-Kimberly
April 1990 Vice President, Yuhan-Kimberly
March 1994 Senior Vice President, Yuhan-Kimberly
February 1995 CEO, Yuhan-Kimberly
E-mail: khmoon@kcc.com>href=mailto:khmoon@kcc.com>khmoon@kcc.com