[Asia Economy Reporter Seungjin Lee] Tension is mounting at Lotte Group ahead of the year-end regular personnel reshuffle. Following the unprecedented move of hiring an external candidate for the head of the Shopping Division’s Planning and Strategy Headquarters for the first time, the group is continuing its unusual steps by establishing a big data organization directly under Kang Hee-tae, Head of the Distribution BU and Vice Chairman of Lotte Shopping. Accordingly, there is an analysis that Lotte Group will carry out a large-scale personnel overhaul in this reshuffle, with generational change and digital transformation (DT) as the key themes.
The expectation of a major personnel shake-up at Lotte was forecast last August. This was because Lotte, which usually only conducts regular executive appointments in mid-December each year, made personnel changes involving Vice Chairman Hwang Gak-gyu, who was considered the group’s second-in-command. Moreover, after Chairman Shin Dong-bin consistently emphasized DT and responses to the post-COVID era since May, there was a prevailing expectation of a large-scale organizational restructuring following personnel actions.
Lotte is expected to implement generational change among key executives in this reshuffle. A rise of executives born in the 1960s is anticipated. Lee Dong-woo, born in 1960, who was appointed CEO of Lotte Holdings succeeding Vice Chairman Hwang, born in 1955, is an example. The August appointments of Yoon Jong-min, President of Lotte Human Resources Development Institute, and Ryu Je-don, Executive Director and CEO of Lotte Property & Development, are also both individuals born in 1960.
Additionally, since Chairman Shin has consistently emphasized DT, it is analyzed that the age of executives responsible for practical work will be lowered to under their 40s. Jung Kyung-woon, born in 1972, was appointed as the head of the Shopping Division’s Planning and Strategy Headquarters as the first external hire. Jung, who will oversee Lotte Shopping’s Planning and Strategy Headquarters, is expected to lead business restructuring for management normalization and new business strategies. The Lotte Shopping HQ, where Jung will be based, was newly established this year and oversees five business units: department stores, marts, supermarkets, e-commerce, and LOBs.
In particular, personnel related to DT tasks are expected to be appointed on a large scale. Earlier, on the 1st, Lotte Distribution BU led by Vice Chairman Kang Hee-tae launched a Data Governance Task Force (TF) directly under Kang, appointing Yoon Young-sun, Executive Director of Lotte Information & Communication, as the TF leader and Chief Data Officer (CDO). This team is expected to establish the group’s data business roadmap and will initially conduct data analysis necessary for enhancing the integrated online mall Lotte ON service, launched this year.
Previously, in July, Lotte switched IT recruitment to year-round open recruitment to strengthen talent acquisition related to DT. Also, last month, four companies?Lotte Home Shopping, Lotte GRS, Lotte Information & Communication, and Lotte Chilsung Beverage?recruited only new employees for DT positions, demonstrating their commitment to DT.
Meanwhile, Lotte advanced the submission deadline for the personnel evaluations of 600 executives over the past three years by about a month, from the usual late October to the end of September before Chuseok. On the 21st, Chairman Shin had lunch with four BU heads of Distribution, Chemicals, Hotel Services, and Food, along with six heads of holding company departments, receiving reports on key issues. There is a forecast that the personnel announcement could be made as early as early November. When the timing of personnel changes is moved forward compared to previous years, it is interpreted as a willingness to quickly mitigate internal shocks caused by personnel renewal.
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