Case study: LG Electronics
Human resource management practices in Korea have traditionally been embedded
within their wider traditional environments. since industrialisation there have been
some radical socio-political changes, accompanied by significant shifts in the 'deep
structure' of many organisations' HRM approaches. LG Electronics is a major
multinational electronics company established in 1958 with a current workforce of
around 90 000, some 30 000 of whom are based in Korea. Throughout its history the
company has initiated several major changes to its HRM architecture. Most recently,
the company was faced with the need to realign its HR practices with changes in the
global environment. Alongside this was a need to address rising levels of competition
within its industry and a need to shift strategic orientation. Whereas LG had
historically focused on a strategy of volume over value, changes in the market meant
that the competitors such as Apple, which competed on the basis of value had
enjoyed greater success. LG therefore had to shift towards a strategy of better
balance between volume and value, alongside the need to foresee and commit to
emerging technologies, despite the inevitable uncertainty and risk. In this scenario,
investing in HR and expanding employees' skill base becomes essential to the
company's future - that is there was a recognition of a need to invest in HR and the
firm's intellectual capital.
Some of the challenges included how to develop, retain, and utilise LG's global
talents to make the company more 'future-proof' in the most cost-efficient way. The
HR department had to balance competing demands to be both efficient and flexible
and adaptable and stable, as well as cost-saving and value-adding, while addressing
both local and global needs. To do so, the HR department was structured into a
strategic layer and an operational layer by means of a shared service centre geared
towards handling routine, transactional tasks.
One key feature of the new strategy was a focus on employee enrichment, which
involve ongoing expansion of employees' skill sets through job redesign,
secondment, job rotation and development. Given the increasingly competitive job
market in Korea, LD also focused on creating a talent management strategy for the
organisation at a global level. New training programmes were put in place to develop
the company's talent pool for succession planning, including both on- and off-the job
training.
The head of SHRM commented:
It is no longer enough to simply ask ourselves whether 'we know well enough what
our business require from us' and 'how quickly we can address these requirements'.
It is about 'how effective we are in anticipating the needs before they come up' and
'how we can provide strategic values that are excellent value for money'