By Lee Hyo-sik
Staff Reporter
Samsung Electronics is the global leader in chip production, Hyundai-Kia Automotive Group is within the top 10 car manufacturers in output and Hyundai Heavy Industries is conquering the world's shipping industry hands down.
They may be happy to see their cash registers bulging but their public relations are debatable. A recent Samsung Economic Research Institute report points to the general lack of this knowledge among Korean firms.
It suggested local firms should strengthen public relations efforts to establish a better corporate image abroad and invest more to recruit talented manpower and create a better workplace.
The institute said the average corporate performance of the top 100 firms listed on the domestic stock market is equivalent to 43 percent of that of the Standard and Poor's (S&P) 100 firms. But the size of their intangible assets amounts to only 3.2 percent of global firms.
In calculating the scale of intangible assets, it looked into 11 factors; national image, knowledge level, corporate culture, brand perception, corporate image, leadership, manpower competency, technology advancement, system capacity, quality of workplace and corporate networking.
When those of S&P 100 firms are set at 1, the overall image of Korean businesses stands at 0.03 with their knowledge level at 0.82 and corporate culture at 0.3.
Local firms' average system capacity, measured by inventory turnover ratio, is 1.7 times that of global companies, while their manpower competence, or the average salary amounts to 75 percent of what S&P 100 firms are paying employees.
Korean companies' quality of workplace, gauged by after-tax operating income divided by total labor costs, is 0.78, with corporate networking, or the amount of media exposure, at 0.005, and brand perception, or advertising expenditure, at 0.018.
SERI said the intangible assets of the country's leading companies are largely undervalued, compared with those of multinational firms in the U.S. and Europe, because they generate lower earnings from investment and are more vulnerable to market changes.
Samsung Electronics' technology advancement and system capacity are 1.8 times and 1.5 times those of Hewlett Packard, but its brand image and manpower competence lag far behind the U.S. computer maker. Also, Hyundai Motor is far superior to General Motors in system capacity and manpower competence, but its brand image and corporate networking are outpaced by the U.S. automaker.
The institute said Korean businesses should make an all-out effort to improve their corporate and brand images abroad to market their products and services at higher prices.
``It is important to generate large revenue and profits. But it is also as important for local companies to build up intangible corporate assets to become more competitive in an increasingly globalized marketplace,'' it stressed.
They may be happy to see their cash registers bulging but their public relations are debatable.
The institute said Korean businesses should make an all-out effort to improve their corporate and brand images abroad to market their products and services at higher prices.
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