Samsung and Hyundai: The Frontier of Korean Entrepreneurship (Part 2)

Good to see you again! How did you like the last article about the foundation of Samsung (삼성)? I hope you have learned about the Korean entrepreneurship and its history. Moving on to the rest of this article, I would like to introduce Hyundai’s (현대) Chung Ju Yung (정주영). Then the last part will the present evaluation of the two CEOs.

1-young-chung-juyung

Young Chung Ju Yung (Source: http://news.joins.com/article/18932001)

Born as the first son of family of peasants in 1915, Chung Ju Yung spent his childhood in Kangwon province (강원도) (now located in North Korea). Since young, he had wanted to get rid of the harsh reality of poverty. In 1929, at the age of 14, Chung and one of his friends decided to move to Chongjin (청진) in search for a better job. This immature journey made him realize his passion for civil engineering and accomplishment. Then he went on to his second journey to Seoul in 1933 and started to work in a local bookkeeping school, in hope of becoming an accountant. But obviously, he could not accomplish the dream because of his father urging him to come back. Then after the final attempt to escape the poor  hometown, he got employed as a deliveryman at a rice store in Seoul 1936.

A year after his marriage in 1936, the owner of the rice store became ill and decided to success the store to Chung. At the age of 22, Chung finally became the owner and renamed the store to Kyungil (경일) Rice Store . That was the initial point Chung learned business.

But a few years later. Chung decided to enter the automobile repair business. Chung started the A-do Service Garage (아도서비스) on a 3,000 Won loan. However, three years later, the Japanese Occupational Government forced the garage to merge with a steel plant as part of the Pacific war effort. In 1943, the Japanese Occupational Government forced the garage to merge with a steel plant as part of the war effort. Although his businesses were seeing their demise due to suppression by the Japanese, Chung returned to Asan (아산) with 50,000 Won in savings to try to make the best of the situation.

In 1946, after the liberation of Korea from Japanese control, Chung started Hyundai and Hyundai Civil Industries (현대산업개발)  in anticipation of the post-war reconstruction and industrialization.

After the Korean war and the resign of the Rhee Syngman government )이승만 정부), Chung won major government contracts and became responsible for building much of South Korea’s transportation infrastructure as Park Jung Hee’s 5 year plans (박정희 경제개발 5개년 계획). Hyundai took parts in the construction of the Soyang Dam (소양댐), the Gyeongbu Expressway (경부고속도로), the world’s largest shipyard in Ulsan (울산), the Kori Nuclear Power Plant (고리원자력발전소) and many others.

In 1973, the group’s shipyard is incorporated as Hyundai Shipbuilding and Heavy Industries (현대중공업). And in January of 1975, Chung was inaugurated as the CEO of Hyundai Group (현대그룹). In the same year, Hyundai moved further into the global market and the first home-manufactured car, PONY (포니) was born a year after.

One aspect that can distinguishes Chung from the other businessmen of his generation is Chung’s interest in social sectors. In 1977 he founded the Asan Foundation (아산재단) to support medical, social welfare, research and development, and a scholarship fund. As a result, the Foundation have established nine hospitals throughout South Korea, built Ulsan Medical College (울산대학교 의과대학), and funded the Asan Life Sciences Research Institute (아산생명과학연구원).

Besides social activities, Chung is credited with successfully lobbying for South Korea to host the 1988 Summer Olympics (1988 서울하계올림픽). This success highlighted the accomplishments of his generation in the eyes of the world and became a source of great pride to the people of Seoul.

5-cattle-to-north

Cattles to the North (Source: http://blog.unikorea.go.kr/97)

Born and raised in the North, Chung also worked to normalize relations between the two Koreas. In 1998, at the age of 82, he worked with the South Korean government to provide economic assistance to the North. Chung travelled across the border with 1001 “unification cows” as a gift to the North Korean people. Hyundai Asan also once operated Kumgang Mountain Tourism (금강산 관광) and the Kaesong Industrial Complex (개성 공단) in 1998.

During the IMF crisis in 1997, Hyundai acquired Kia Motors (기아자동차) and LG Semi-Conductor (엘지반도체), and integrated family organizations to downsize the group. In 1998, his two sons, Chung Mong Hun (정몽헌) and Chung Mong Koo (정몽구) became the CEO of Hyundai Group and Hyundai Motors (현대자동차). Chung died in 2001 after retirement. Short after, Chung Mong Hun died in 2003, and his wife, Hyun JeongEun (현정은) has been in charge of the CEO position of Hyundai Group since then.

6-conclusion

To summarize, Unlike Lee Byung Chul (이병철), who was born in a wealthy Yangban family (양반가), Chung was born in a lower farming class. He had very optimistic and confident personalities. Chung always challenged things that seem impossible and not sought by others. Also, unlike Lee Byung Chul, who tried to distance himself from political activities, Chung involved in politics. He even ran for a presidential election once, but failed.

7-evaluation

So far, we have looked through the life of Korea’s two most famous entrepreneurs. I would like to end the post by providing the present evaluation of their works. Firstly, from the positive perspective, the two figures are acknowledged for their contribution to the economic growth of the South Korea. Also, their leadership skills and management strategies are applaudable. However, from the negative perspective, some people criticize the companies having been worked with the dictatorial government in the 70s and 80s. Also, because Samsung had some cooperation with Japanese corporates in the beginning of the company expansion, some suspect that Samsung is pro-Japanese.

 

Sources:

(1) http://www.hyundaigroup.com/eng/

(2) Kirk, D. Chung Ju Yung, 85, Founder Of the Hyundai Group, Dies, The New York Times. Available at: http://www.nytimes.com/2001/03/22/business/chung-ju-yung-85-founder-of-the-hyundai-group-dies.html [accessed 10.31.2016]

 

Article by Sanguen from Korea, a Junior in Business Administration

Leave a comment

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s

%d bloggers like this: