Merit over the eldest son: The landscape of management succession is changing

The Era of 'Merit-Based' Management Breaking the Principle of Eldest Son Succession

The traditional method of management succession in the Korean business world is changing. Moving away from the custom where the eldest son inherited the family business according to patriarchal order, there are increasing cases where management ability is prioritized over sibling seniority. As the heads of major groups such as Samsung, Hyundai Motor, LG, and Lotte surpass the age of 70, succession has emerged as a key topic, with individuals who have proven practical management performance stepping to the forefront.

Chairman Suh Kyung-bae of Amorepacific Group is a representative example. As the second son of the late founder Suh Sung-whan, he proved his management capabilities through roles such as President of Pacific Pharmaceutical and Head of the Planning and Coordination Office. In particular, based on his achievement of turning the deficit-ridden Pacific Pharmaceutical into a profitable company, he succeeded to the group's management, surpassing his older brother, Chairman Suh Young-bae of Pacific Development. Since Chairman Suh's inauguration, Amorepacific has surpassed 4 trillion won in sales, growing the company more than tenfold from its past scale of 400 billion won.

Chairman Park Moon-duck of HiteJinro Group also secured management rights through competition with his older brother. Initially, his older brother, Chairman Park Moon-hyo of HiteJinro Industrial, was considered the strong successor, but the younger brother, Chairman Park Moon-duck, stepped to the forefront of management by inheriting the shares of their father, the late Chairman Park Kyung-bok. Lotte Group Chairman Shin Dong-bin also demonstrated the trend of "younger brother management" by emerging as the successor to the entire group, surpassing his older brother, former Vice Chairman Shin Dong-ju.

Changing Succession Structures and the Emergence of 'Younger Brother Chairmen'

LG Group shows a different pattern from traditional bloodline succession. The late LG Chairman Koo Bon-moo, who had no sons, adopted his nephew, Chairman Koo Kwang-mo, to succeed the management rights. Currently, Chairman Koo Kwang-mo is leading the management of LG Corp. As such, the business world is entering an era of "younger brother chairmen," centered on individuals with practical management skills rather than birth order. Currently, Vice Chairman Lee Jae-yong of Samsung Electronics, Vice Chairman Chung Eui-sun of Hyundai Motor, and Chairman Koo Kwang-mo of LG are active as the pillars of next-generation management.

Daughters of Business Tycoons Choosing the Spotlight Over Management

As the trend of management succession shifts, cases are appearing where the daughters of business tycoons choose career paths in fields with high public recognition, such as art or the entertainment industry, instead of the front lines of management. They are choosing to build their own careers and communicate with the public rather than participating in corporate management.

Representative examples include Moon Seo-yoon, daughter of Shinsegae Group Chairman Chung Yoo-kyung; Ham Yeon-ji, daughter of Ottogi Chairman Ham Young-soon; Lee Ju-young, granddaughter of DL Group Honorary Chairman Lee Joon-yong; and Lee Eun-jae, granddaughter of actor Shin Young-kyun. In the case of Amorepacific Group, the second daughter, Suh Ho-jung, joined Osulloc as a new employee in July 2023 and is performing product development (PD) and marketing duties. Meanwhile, the eldest daughter, Suh Min-jung, has been on leave since July 2023, stepping away from the front lines of management.