ad info




Asiaweek
 home
 intelligence
 web features
 magazine archive
 technology
 newsmap
 customer service
 subscribe
 TIMEASIA.COM
 CNN.COM
  east asia
  southeast asia
  south asia
  central asia
  australasia
 BUSINESS
 SPORTS
 SHOWBIZ
 ASIA WEATHER
 ASIA TRAVEL


Web-only Exclusives
November 30, 2000

From Our Correspondent: Hirohito and the War
A conversation with biographer Herbert Bix

From Our Correspondent: A Rough Road Ahead
Bad news for the Philippines - and some others

From Our Correspondent: Making Enemies
Indonesia needs friends. So why is it picking fights?

Asiaweek Time Asia Now Asiaweek story

OCTOBER 8, 1999 VOL. 25 NO. 40

M A N A G E R S   A T   W A R

CHO JUNG HO, HANJIN SECURITIES:
His father passed him over twice, and Cho fumed as other managers proved lackluster. Then the Crisis struck and Cho got his chance

Seokyong Lee - Black Star for Asiaweek
A Scion Ditches the Past
By JOHN LARKIN Seoul

The meeting was dragging on. Inside, one of the world's biggest finance firms was deciding whether to put the final seal on a joint venture with Hanjin Investment & Securities, one of South Korea's lesser known but up-and-coming brokerages. The hardheads from Prudential Asset Management Asia scoured Hanjin's books for the pitfalls so common in deals at Korean companies. "But what they found was the cleanest and most transparent balance sheet they'd ever seen in Korea," declares Cho Jung Ho, president and CEO of Hanjin Securities. "We were really excited. Them injecting money into us meant there was something valuable in our company."

The word value wasn't synonymous with Hanjin Securities until recently. With a series of complacent managers at the helm, the company languished until Cho, fifth child of Hanjin chaebol founder Cho Choong Hoon, finally got his hands on the wheel. The deal signed early this year gave Prudential, the Hong Kong unit of the U.S. insurance giant, a half-share in the controlling stake in the firm. The sale marked a turning point in the younger Cho's efforts to shake the cobwebs out of the company. For years it had been neglected while money was poured into the group's cash-cow, Korean Air. Cho took over the brokerage in May 1997. The Crisis handed him the chance to push through reforms that would have been heresy earlier but have now transformed Hanjin.

    MANAGERS AT WAR
Employees First Lance Gokongwei, Cebu Pacific

Gambling with the Truth Sanan Angubolkul, Srithai Superware

A Scion Ditches the Past Cho Jung Ho, Hanjin Securities

Daughter Knows Best Adrienne Ma, Joyce Boutique

When Creditors Scream Rini Suwandi, Astra International

Money, Money, Money Hayakawa Shigezo, Misumi Corp.

Cho, 40, looks every inch the scion. But beneath the Armani suit beats the heart of a zealot. He returned to Korea in 1989 after getting an MBA at Switzerland's International Institute for Management Development to find the stock market raging - and Hanjin Securities languishing . Even now, Cho bristles as he recalls those wasted chances. He was overlooked twice because his father thought him too young. The second choice was particularly galling. "He was a very lazy man. He just wanted to play golf and go on trips. A lot of precious time was wasted."

Cho tried to promote Western-style management, but found no one listened. Now they do. "The previous president believed in seniority," says Cho. "I always thought that was nonsense. They'd say: 'Oh Mr. Cho, you don't want to upset anyone.'" First thing Mr. Cho did was lay off 40% of the staff. "It was a pretty good time to convince labor leaders that 40 can lose their jobs so 60 can keep them," says Cho. Those who disagreed were the first to go. Next Cho took the sword to years of dangerous complacency by cutting wages 30% and introducing performance-based pay. "I told them, either we change or die. They knew they had to change."

Traders at branch offices were the first ones to see the merits of meritocracy. "If a trader generates 100 billion won in profit for the company he should get at least 30% of that profit," says Cho. "That's only fair." Their performance is reviewed every three months and they get bonuses for exceeding sales targets. Next Cho wants to cut contracts from three years to one, a drastic move in South Korea. Opposition doesn't faze him one bit. "I'm sure some people will resist," he says, "but you can always find someone younger and more eager."

Today Prudential executives make up half of Hanjin's board and profess themselves pleased; Cho is searching for "a whiz-kid from New York or London" to act as joint CEO. Tough love has paid off. Last year profits hit 10.3 billion won; the brokerage lost nine times that in 1997. Bigger profits are forecast this year. In two years, Cho has transformed a fusty company into a shiny new one. But some things never change. When Cho walks into reception, his staff stand to attention as if in the presence of royalty.

NEXT: Daughter Knows Best



This edition's table of contents | Asiaweek home

AsiaNow


ASIAWEEK Newsmap: Get the week's leading news stories, by region, from Newsmap

   LATEST HEADLINES:

WASHINGTON
U.S. secretary of state says China should be 'tolerant'

MANILA
Philippine government denies Estrada's claim to presidency

ALLAHABAD
Faith, madness, magic mix at sacred Hindu festival

COLOMBO
Land mine explosion kills 11 Sri Lankan soldiers

TOKYO
Japan claims StarLink found in U.S. corn sample

BANGKOK
Thai party announces first coalition partner



TIME:

COVER: President Joseph Estrada gives in to the chanting crowds on the streets of Manila and agrees to make room for his Vice President

THAILAND: Twin teenage warriors turn themselves in to Bangkok officials

CHINA: Despite official vilification, hip Chinese dig Lamaist culture

PHOTO ESSAY: Estrada Calls Snap Election

WEB-ONLY INTERVIEW: Jimmy Lai on feeling lucky -- and why he's committed to the island state



ASIAWEEK:

COVER: The DoCoMo generation - Japan's leading mobile phone company goes global

Bandwidth Boom: Racing to wire - how underseas cable systems may yet fall short

TAIWAN: Party intrigues add to Chen Shui-bian's woes

JAPAN: Japan's ruling party crushes a rebel at a cost

SINGAPORE: Singaporeans need to have more babies. But success breeds selfishness


Launch CNN's Desktop Ticker and get the latest news, delivered right on your desktop!

Today on CNN
 Search

Back to the top   © 2000 Asiaweek. All Rights Reserved.
Terms under which this service is provided to you.
Read our privacy guidelines.