By Kim Jae-heun
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| Lotte Department Store CEO Jung Joon-ho |
For years, Lotte Group has been leading the local retail market with its rigid top-down management style. Junior staffers had to follow the order given by their bosses and the company prioritized the group before individuals. This led to Lotte’s continuous economic growth but also blindfolded it to the side effects.
However, that time is passing by and a new trend has arrived. Lotte’s “vertical” corporate culture has become old-fashioned, and in the time when speed is the key to the success, the retail giant’s overly prudent decision-making system led to it lagging behind its main rival Shinsegae and market newcomers.
Lotte Group Chairman Shin Dong-bin has been asking executives at the company’s retail units to carry out renovations and break down Lotte’s traditional “military way” of management. However, the Lotte Shopping CEOs have failed to do so, because they too were imbued with the company’s outdated organizational culture.
Ahead of 2022, Shin made a big change by appointing Jung Joon-ho as a new leader of Lotte Department Store. Jung is a retail expert who built his career at Shinsegae, the long-time main rival of Lotte Shopping. It is the first time that Lotte appointed a CEO from outside in 10 years.
Jung has already started his job. From his first day on Dec. 1, he delayed the business report meeting that has been traditionally held on the first day whenever a new CEO is appointed. Jung is said to be carrying out a large-scale reshuffle in the department store business.
“It is his first move to deviate Lotte from its old style of management and see his department store business from a new perspective,” an industry source said.
Jung also asked his executives and senior managers to communicate with their junior colleagues and not to force their orders. Branch managers were told to visit their rivals’ stores and experience their style as well. Jung pointed out a number of Lotte Department Store’s problems including its unsophisticated image and inflexible corporate culture.
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| Customers enter Lotte Department Store in Dongtan, Hwaseong, Gyeonggi Province, on Aug. 20. Korea Times file |
Chairman Shin is said to be behind Jung to give him the power to execute his style of management.
But there are doubts of Jung’s success too. Industry sources said it will be hard to break down the conservative management system that Lotte has long been pursuing for decades. There is also the possibility that some will resist internally ― especially because Jung is not a “pure Lotte man.”
However, Jung is well-known for having a powerful driving force when he is doing his job. This gave him successful outcomes like exclusively importing popular Italian fashion brand Giorgio Armani when he worked at Shinsegae.
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Source: Buhay Kapa PH
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