Research Article
KORINDO Group’s Competitive Advantage by ESG Management and Diversification Strategies
1 Chungbuk National University
Published: January 2024 · Vol. 28, No. 1 · pp. 1-19
DOI: https://doi.org/http://dx.doi.org/10.17287/kbr.2024.28.1.1
Full Text
Abstract
Chairman Seung Eun-ho, CEO of KORINDO Group, established a company for wood production and export in Indonesia in 1969, combining the names of the two countries, Korea and Indonesia, to name the company KORINDO. It began with wood production, but it encompassed various wood-related fields such as plywood, afforestation, newspaper, and palm oil, and has grown into a successful conglomerate with more than 30 affiliates by diversifying its industries into commercial vehicles, wind towers for wind power generation, chemicals, transportation, pipe coating, finance, and insurance. In this case study, we sought to find this process of growth in relevant or non-relevant diversification strategies and ESG management. In terms of corporate expansion, there are advantages due to its size, but there are also disadvantages of increasing risks. Therefore, in the case of KORINDO, related diversification was carefully carried out in the early stages, gradually entering slightly unrelated industries. However, the foundation of its growth was the “three agility (三先)” management philosophy of prevision (先見), prevenience (先行), and preoccupation (先占), which can be deeper and more systematic than the “PDS (Plan, DO, See) strategy” of management. Meanwhile, it should not be overlooked that the philosophy of “localization” that Chairman Seung Eun-ho has emphasized contains ESG's management philosophy of environment, social, and governance, which has recently been widely talked about. Above all, based on the philosophy of “giving is receiving,” KORINDO grew up with local residents in Indonesia. Finally, in this paper, the success of the KORINDO group was analyzed using Porter's (1990) diamond model and implications were derived. Behind the success, the ordinary truth that there is the right strategy, philosophy, and leadership of the CEO was found to be melted into KORINDO, a successful ‘Han Sang (韓商)’ group in Indonesia far away.
