Asian Financial Crisis and LG Electronics Paradigm Shift

Abstract

LG’s management philosophy can be briefly summarized as “value creation for customers” and “human-centered management.” LG prioritizes its customers, who serve as the foundation of the business, to ensure their maximum satisfaction. LG’s management philosophy of respecting human values and harmony has been handed down from its predecessors. Among Korean companies, LG stands out for its unique corporate culture and history. Although Samsung’s scale and sales volume are higher, LG has pioneered the development of the Korean electronics industry and taken it forward. Up until the 1980s, surprisingly, LG maintained the top ranking as a Korean conglomerate. Against this background, this study explores the transformation of the management philosophy and strategy of LG Electronics. The study further examines if LG has managed to strengthen its market competitiveness while coping with the changing business environment and to confirm its superiority in the global market from inception to the present. In particular, the study focuses on LG’s global expansion and the transformation of its competitive strategies both before and after the Asian financial crisis.