- 27 July 2016
- Lu : 1811 fois
The piece focuses on management advice gone sour at three South Korean firms: LG Electronics, Doosan Group, and Samsung Life. At LG Electronics, the consulting firm advised Vice Chairman Nam Yong to continue focusing on the sale of feature phones instead of smartphones in the early years of the 21st century.
Nam lost his job shortly after, following the increasing popularity of smartphones. McKinsey was reputed to have made some $30 million each year for consulting the company, and is believed to have advised the company to divert its attention from smartphones. “There is no ‘what if’ in history,” an LG official told Korea Times. “But I think LG would not lag behind like this if Nam did not depend on McKinsey that much.”
At Doosan Group, McKinsey advised the group to move into heavy industry, advising Doosan to acquire Korea Heavy Industries & Construction, Koryeo Industrial Development, Daewoo Heavy Industries & Machineries and Bobcat. However, Doosan then had to aggressively cut its payroll to finance the acquisitions.
Critics maintain that the company’s cashflow would have been maintained had it retained its business-to-customer companies. However, Doosan insists the decision was from management, and not McKinsey.
At Samsung Life, McKinsey advised the firm in 1981 to decimate its sales network by almost half. Though the company decreased the number of sales agents from 60,000 to 35,000, the firm continued to struggle.
“After the unprecedented restructuring, Samsung suffered from great setbacks throughout the 1980s. I think the negative ripple effect still continues,” one former Samsung Life director told Korea Times.
“The conclusion is always the same – McKinsey led us in a wrong direction.”