[Editorial] A Socially Responsible LG Group

The LG Group raised the number of its workers from 84,000 in late 2007 to 97,000 late last year. The conglomerate will further increase the figure to 106,000 by the end of this year. So LG will have added 22,000 staff in just three years, or a rise of 26 percent. Its domestic investment went from 7.7 trillion won (7.7 billion U.S. dollars) in 2007 to 11.7 trillion won (10 billion dollars) last year. The figure will grow to 15 trillion won (13 billion dollars) this year, nearly twice that of three years ago.

LG recruited 9,600 staff last year at a time when many foreign companies conducted mass layoffs, let alone hire new workers. The conglomerate also avoided job cuts save letting go of employees set to retire or leave for other companies. LG has also announced that it will hire an additional 10,000 employees this year. The group is increasing its number of overall jobs through hard-to-make managerial decisions in which it continues to recruit new employees and retain existing staff. It has accordingly nixed the method of “hiring on one side and firing on another.”

LG Group Chairman Koo Bon-moo said in late 2008, “We should avoid hiring new staff and letting go of existing workers just because of a difficult managerial environment. We should not be negligent about investment required to secure our future competitiveness.” His statement caused a major stir at a time when fears were mounting over mass layoffs amid the global economic crisis. LG truly set a leadership model for the broader business community.

The group has had strike-free labor management relations at all affiliates since 2003. Cooperative and stable labor-management relations have backed LG’s expansion in employment and investment. It has enjoyed a “new leap forward” since 2005, when it completed the split of its affiliates GS, LS and LIG based on peaceful labor-management ties. The group has targeted 135 trillion won (117 billion dollars) in sales this year, up from 83 trillion won (83 billion dollars) in 2007. It has posted more than seven trillion won (6.1 billion dollars) in operating profit every year since 2008. LG keeps setting records by posting bigger sales, operating profit, personnel size and investment volume than before the separation of its affiliates.

In Korean society, more than a few people think the primary reason for a company’s existence is to return wealth to society or make social contributions, a misconception spread by leftist ideology and promoted by certain political groups. Even certain teachers try to pass on this ideology to students. The primary goal of a company is profit. The ideal image of a company is for labor and management to join forces to sell competitive products and services. The company then pays taxes, invests and creates jobs based on its profit. Like the LG Group, corporate entities that increase employment and investment and thereby contribute to the country, society and general public are the true champions of corporate social responsibility.