"Chief Executive of Core Business Also from Outside" ... Lotte Accelerates Innovation with Bold Personnel Changes (Comprehensive)

Chairman Shin Dong-bin Orders Securing 'Core Talent' to Lead Change and Innovation
HQ-Centered Organizational Restructuring to Enhance Responsible Management and Execution Capability

[Asia Economy Reporter Jo In-kyung] Lotte Group has made unprecedented and comprehensive talent acquisitions and performance-based promotions, including appointing an external candidate for the first time as the head of distribution and department stores. At the same time, through organizational restructuring, it has established a group management system capable of proactively responding to the rapidly changing business environment.

Introduction of HQ System Strengthening Execution by Industry Sector

On the 25th, Lotte Group held board meetings for a total of 38 affiliates, including Lotte Holdings, and finalized the 2022 regular executive appointments and organizational restructuring.

First, the existing Business Unit (BU) system will be replaced by a HeadQuarter (HQ) system. Considering the affiliate investment structure and business commonalities, affiliates are categorized into six business sectors (Food, Shopping, Hotel, Chemical, Construction, Rental). Among these, the major sectors Food, Shopping, Hotel, and Chemical will be managed under the HQ organization led by a single general representative to pursue meticulous management. Companies supporting the group’s future growth, such as IT, data, and logistics, will be separately established and strategically nurtured.

The HQ will be an organization with enhanced execution capabilities compared to the existing BU. It will not only establish mid- to long-term business strategies for business sectors and affiliates but also strengthen financial and HR functions to promote integrated synergies within the sectors. Integrated operations of purchasing, IT, legal affairs, and others under HQ are also being actively considered.

As each group company strengthens autonomous and responsible management, Lotte Holdings will focus more on its core tasks as a holding company. It plans to concentrate on group-wide strategy formulation, portfolio advancement, future new business promotion, and core talent development. To enhance communication between the holding company, HQ, and affiliates, a Business Support Team under the ESG Management Innovation Office of Lotte Holdings has also been newly established.

A Lotte official stated, "Through this organizational restructuring, we expect faster decision-making and strengthened organizational competitiveness,"

"and with strengthened affiliate responsible management and compliance, the group’s ESG competitiveness will also be significantly enhanced."

Comprehensive Recruitment of Experts by Field

Prior to this personnel move, Lotte Group Chairman Shin Dong-bin reportedly ordered the securing of core talents who will lead change and innovation. At the same time, he emphasized openness to embrace any talent and an organization with the potential for talents to attempt change.

Accordingly, Lotte actively recruited external talents with expertise in each field in this personnel move. Kim Sang-hyun, former CEO of DFI Retail Group, and Ahn Se-jin, former CEO of Nolbu, were appointed as general representatives of the distribution and hotel business sectors, respectively.

Kim Sang-hyun, appointed as the new general representative of the distribution sector, is a global distribution expert. He joined P&G USA in 1986, served as CEO of P&G Korea, President of Southeast Asia, and Vice President of New Business at P&G USA. He later served as Vice Chairman of Homeplus and from 2018 was CEO of Southeast Asia Distribution and H&B at DFI Retail Group, making him a seasoned professional manager.

Ahn Se-jin, appointed as the new general representative of the hotel sector, is a new business expert. He comes from the global consulting firm Kearney, worked in new business and business strategy at LG Group and LS Group from 2005 to 2017, and served as CEO of Nolbu at Morgan Stanley PE from 2018.

Vice Chairman Kang Hee-tae and President Lee Bong-cheol, who previously led the distribution BU and hotel BU, stepped down from frontline management for the group’s new leap and change.

Accelerating Organizational Innovation through Expansion of New Executives

In this personnel move, Lotte doubled the number of promoted and newly appointed executives compared to last year, strictly following a performance-based principle. In particular, President Kim Kyo-hyun, head of the chemical BU, who has achieved outstanding results overcoming the COVID-19 crisis, and President Lee Dong-woo of Lotte Holdings, who is laying the foundation for the group’s new changes and innovations, were promoted to vice chairman.

Kim Kyo-hyun, who will serve as the general representative of the chemical sector, is the group’s top petrochemical expert. He was promoted to vice chairman in recognition of his achievement in restoring performance to pre-COVID-19 levels. He joined Honam Petrochemical in 1984, served as head of the new business division, CEO of LC Titan from 2014 to 2016, and CEO of Lotte Chemical from 2017 to 2018. Since 2019, he has been head of Lotte Group’s chemical BU and concurrently CEO of Lotte Chemical since last year.

Lee Dong-woo, CEO of Lotte Holdings, was promoted in recognition of his role in discovering new growth engines and leading change and innovation. He joined Lotte Department Store in 1986, served as head of management support and Jamsil branch manager. From 2012 to 2014, he was CEO of Lotte World, and from 2015 to 2020, CEO of Lotte Hi-Mart. As co-CEO of Lotte Holdings, he is responsible for the group’s business strategy and finance.

The general representative of the food sector will be Lee Young-gu, head of the food BU. Lee Young-gu also concurrently serves as CEO of Lotte Confectionery.

Jung Joon-ho, formerly of Shinsegae, has been appointed as the new head of the department store division at Lotte Shopping. Lee Jae-ok, executive director of the department store merchandise headquarters at Lotte Shopping, has been appointed CEO of Lotte GFR.

Ko Jung-wook, CEO of Lotte Capital, will be promoted to vice president and take charge of the Financial Innovation Office at Lotte Holdings. Choo Kwang-sik, head of the Financial Innovation Office at Lotte Holdings, will move to CEO of Lotte Capital.

Kim Yong-seok, CEO of Lotte INEOS Chemical, has been promoted to vice president and appointed CEO of Lotte Fine Chemical. Jung Seung-won, head of strategy at Lotte Chemical, was promoted to executive director and appointed as the successor CEO of Lotte INEOS Chemical.

Choi Byung-hwan, former CEO of CGV, was recruited as vice president to lead Lotte Cultureworks. Lotte Members appointed Jung Bong-hwa, former head of Shinhan DS Digital Division, as head of the DT Strategy Division, recruiting three external talents simultaneously to accelerate the group’s DT innovation.

This content was produced with the assistance of AI translation services.