Lotte Group Chairman Shin Dong-bin gives words of encouragement during a meeting with Lotte executives and staffers at the Lotte World Tower. (Photos: Lotte Group)

“Setting quantitative goals like maxing out sales could endanger the group’s stability.” Lotte Group Chairman Shin Dong-bin made the remarks while presiding over the Value Creative Meeting (VCM) for the second half of 2019, formerly known as a CEOs’ meeting, which took place over five days until July 20.

His remarks seemed to be extraordinary. In the past, companies were preoccupied with creating operating profit, but they turned out to be short-term survival means, he said. Lotte Group rose to a fifth and focused on profit-oriented management, but the move would no longer guarantee corporate sustainability, he noted.

Chairman Shin suggested “companies sympathizing with society.” His proposal may be construed as his unveiling of a “New Lotte Vision” following hardships the group had experienced in recent years. Starting with the Food Business Unit, the VCM meeting proceeded with each business unit having discussion each day. A final meeting took place on July 20 to integrate and share the whole of things that had been discussed.

The keywords Chairman Shin used while wrapping up the latest meeting were ‘sympathy and social values’.

The days have come in which products of companies sympathizing with society, consumers and other stakeholders have been determined, and their brands have been maintained, he said. Chairman Shin’s remarks have been considered to come from his diagnosis of the group’s weak points. In the past five years, the group had experienced unfavorable factors such as his family feud with management rights and the prosecution’s probe into the group and the damages Lotte suffered from Chinese authorities’ retaliation against the installation of U.S. THAAD system in Korea.

Chairman Shin came up with detailed steps. He called for the group to take into account issues such as profitability, environment, social issues and management structure as far as investments are made. He stressed the solving of social issues and unfavorable impact on corporate governance. He revealed his determination to delegate decision-making authority to each subsidiary as much as possible and share fruits based on performances.

Prior to the latest VCM, Chairman Shin told CEOs of major group subsidiaries to come up with business plans targeting three-to-five years ahead under the topic “Where will you invest, provided 10 billion Won is made available.”

An evaluation of each CEO business plan showed that Lotte Chilsung Beverage, Lotte Home Shopping, Lotte Chemical and Lotte Duty Free had received the most investments, in that order.

Lotte Chilsung Beverage had been praised for shifting from a low-price strategy to a new one focusing on “selling good-quality product for reasonable prices.” Lotte Home Shopping unveiled a plan, calling for the future leadership of Lotte e-commerce.

Lotte Chemical was found to be No. 1 in the Lotte Chemical Business Unit. The company was given a better evaluation in all categories, including global market exploration, digital transformation, and management sustainability.

Lotte Chemical’s new plant in Louisiana, the United States, led to Chairman Shin’s meeting with U.S. President Donald Trump at the White House, raising its standing among group subsidiaries. Lotte Duty Free was praised for presenting a mid- and long-term strategy plan to explore overseas markets.

The plan calls for expanding its current presence at countries such as Vietnam, Indonesia and Australia to their neighboring countries. Lotte Duty Free aims to rise to global top in three years, beating the juggernaut Dufry of Switzerland.

A view of the Lotte World Tower.