Hyundai Department Store's 'Simple Reporting System'
Fila Korea Abolishes Executive System
Encouraging Everyone's Opinions and Strengthening Communication
Lotte ON Expands Email Operations
Jung Ji-sun, Chairman of Hyundai Department Store Group (from left), Yoon Geun-chang, CEO of Fila Korea, Na Young-ho, Head of E-commerce Division at Lotte Shopping
[Asia Economy Reporter Lim Hye-seon] Distribution companies, which had conservative corporate cultures with a traditional image, are changing following the rise of the MZ generation (Millennials + Generation Z, born between the 1980s and 2000s). The vertical organizational culture based on the traditional top-down approach is shifting to a horizontal organizational culture based on a bottom-up approach where all employees can freely express their opinions. Companies are building non-face-to-face reporting cultures for young employees familiar with digital devices such as smartphones, and are abolishing rank systems to form horizontal organizations.
Hyundai Department Store "Reports Condensed to 5-6 Lines"
Jung Ji-sun, Chairman of Hyundai Department Store Group, has expanded flexibility in the 'way of working.' On the 20th, Hyundai Department Store announced that it abolished 460 report formats and introduced a 'simple reporting system' that replaces approval documents with mobile devices. This system consists of 'simple approval' and 'Report Talk.' Simple approval allows reporting with 5-6 lines of sentences instead of traditional approval documents such as proposals, internal memos, and attendance sheets. Report Talk is used to deliver and share work content within the team during working hours. Hyundai Department Store decided to introduce the 'simple reporting system' after confirming that the most difficult part for the increasing number of MZ generation employees was 'approval-based reporting.' Among Hyundai Department Store's total 3,032 employees, 78.6% (2,385 employees) belong to the MZ generation. In a survey conducted last year targeting all employees, about 7 out of 10 (67.4%) answered that 'reporting' was the most difficult task at work.
Lotte ON Expands Email-Based Work
Na Young-ho, head of Lotte ON and Vice President of Lotte Shopping's e-commerce division, emphasized to employees after his appointment, "Our DNA must be digital, and our working methods and culture must change accordingly to digital methods." Since Na's appointment, email-based work has significantly increased at Lotte ON. Drawing on his experience in foreign companies, he uses email to quickly and accurately deliver instructions to employees. As email use has become frequent, the reporting system has naturally simplified. Reporting via email has become routine, establishing a real-time reporting system between the division head and employees instead of bulky reports.
The response from the MZ generation, who are familiar with email, has been positive. Executives initially felt awkward exchanging opinions via email, but they now appreciate the unique advantage of email in conveying messages more clearly than phone calls or verbal instructions.
Fila Korea Completely Abolishes Executive Positions
Yoon Geun-chang, CEO of Fila Korea, built an integrated IT system based on Google Cloud after his appointment in 2018. Through Google G Suite, CEO Yoon easily communicates with employees online or via mobile anytime, anywhere. Using Google Drive, multiple employees can collaborate on documents simultaneously and use updated versions, improving work efficiency and communication among employees. Video meetings and real-time data sharing with overseas employees are also possible.
Recently, CEO Yoon abolished the internal executive system. Except for top management such as the Chief Operating Officer (COO), titles and systems for executives like directors, general managers, and senior managers were completely eliminated, and the company now operates under a leader-centered functional organization system. CEO Yoon has consistently encouraged an atmosphere where anyone can express opinions and communicate, and has continuously shared the idea of abolishing the rank system with employees. His goal is to abolish the rank system company-wide, including for regular employees. Over the next one to two years, the system will be expanded company-wide with the consensus and agreement of members. CEO Yoon expects that by abolishing the rank system, key decision-makers will be limited to each position holder (simplifying approval lines), enabling faster decision-making and allowing Fila Korea to transition to a 'decentralized organization' it aims for.
CEO Yoon shares the company's management philosophy and specific business model structure with all employees. This is to ensure that when employees face decision-making matters, they make uniform decisions aligned with the agreed direction and standards. He stated, "A decentralized organization is ultimately a structure where each member, who possesses expertise in their respective tasks and is directly engaged with key decision-makers, makes decisions in accordance with the company's philosophy."
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