How do you compare apples and oranges? Which measurement system is better – the one used at the Olympics or the one used at the Academy Awards? It seems obvious that different companies need to be judged using different criteria, but when it comes to SOEs, they are often compared according to the same strict set of rules, as CKGSB Professor of Strategy Dong-Sung Cho explains.
In a recent interview with Korean newspaper Chosun Biz, Professor Dong-Sung Cho, offered his thoughts about the management assessment method of Korean SOEs.
Dr. Cho, Professor of Strategy at CKGSB, commented that, “It is nonsense to try to compare apples and oranges, but that is what it’s like to compare the management assessment of public enterprises in our country. For example, the Korea Tourism Organization and Korea Minting, Security Printing & ID Card Operating Corp (KOMSCO) are assessed by the same criteria.”
According to Cho, state-owned enterprises in China are assessed by an advanced evaluation model which estimates its management results in the near future. He said, “I have reformed the management assessment model for Chinese SOEs applying this theory that a company is built on the dynamic mechanism consisting of a CEO’s role, the environment that companies confront, technology, capital, and so on, and I am currently working on the second phase of reform. The new management assessment model for Chinese SOEs can be liken to changing the assessment system from an Olympic standard to one like the Oscars. In the Olympics, only gold, silver and bronze are awarded, purely based on the final result. But at the Academy Awards, box office receipts are not the only evaluation criteria used. Awards are given not just to actors and directors, but also for the best original screenplay, cinematography and visual effects.”
Cho also added that China, in terms of its public evaluation model, is one step ahead of Korea. Korea, he says, needs to develop proper supervision and evaluation criteria, as public debt in Korea is sharply increasing.
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