Alarms sounded by corporate leaders

Instead of resorting to populist platforms, the government and the National Assembly must work together beyond party lines to map out effective strategies for the survival and sustainability for the economy.

A sense of crisis is deepening for Korea Inc. Leading companies have entered emergency mode after geopolitical uncertainty escalated from the tit-for-tat attacks between Iran and Israel in the Middle East on top of the rising foreign exchange rate, soaring prices and high interest rate. Samsung Group executives are shifting to a six-day workweek. The plan is to be expanded across the C-suite and group-wide from selective executive supervisors of business management and development at Samsung Electronics and from engineering, procurement, and construction at Samsung C&T.

Still, the extended workweek underscores the gear shift to emergency mode. Samsung Group is raising vigilance against its worsening business environment for core companies, including Samsung Electronics, still struggling from the slump in its mainstay chip business. The leading memory chipmaker logged 15 trillion won ($11 billion) in operating profit from its chip division last year and lags behind SK hynix in high bandwidth memory needed to operate various types of AI-based systems.

The jitteriness is shared by other conglomerates. SK Group, Korea’s No. 2 business group, has brought back its regular Saturday meeting of CEOs, a 20-year tradition. Members of its top decision-making consultative body, the SUPEX Council, decided to forgo their right to rest every other Friday to show their determination to steer the group stably against the perilous waters.

The business environment has sharply worsened lately. The increasing geopolitical risks from abroad and domestic slump pushed the Korean won down to 1,400 won, a level only visited during the times of extraordinary crises — the 1997-98 Asian financial crisis, the 2007-08 global financial crisis, and the 2022 steep interest rate hike in the United States. International petroleum prices have shot up above $90 per barrel.

Entrenched high-interest environment from a robust U.S. economy and lingering inflationary risks harden business prospects, as an economic turnaround could be delayed due to the increasing weight of borrowing costs. Vigilant corporate management alone cannot ensure Korea’s command over the harsh wave of domestic and external challenges. Countries are vying heavily to back their corporate power through tax and subsidy incentives.

Instead of resorting to populist platforms, the government and the National Assembly must work together beyond party lines to map out effective strategies for the survival and sustainability for the economy. They must establish a foundation to galvanize corporate restructuring and labor reforms to draw opportunities from the crisis period.