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KEPCO Management Renovation behind Success of Power Generator Among the top-10 companies in the Philippines There are many state-run companies in Korea, big and small. Some of them are in a good shape, but others are not. Among them, the KEPCO is the largest by any standards. Despite its bulky size, its management shines. This is a strong feature of the state-run company, one which others can hardly emulate. In an evaluation of a score of public corporations last year, KEPCO was rated top in the area of management. The state-run company deserves a public praise since large corporations, public and private alike, are liable to fall into the trap of sloppy and unresponsive management. But the KEPCO is different. What's the reason
In the first place, the state-run company has a high sense of te need to renewal. Moreover, this feeling is not confined to the officials in high posts alone. It is company-wide. Armed with the determination for reform, it has continuously carried out a program of aggressive renovation to ensure a transparent and ethical management. As a result, it has won the top place in customer satisfaction rankings for six consecutive years. In the area of probity, it was ranked the fourth out of 15. In terms of credit standing, KEPCO is even higher than the State. The evaluation in all aspects of KEPCO is very high.
In compliance with government policy, the KEPCO took a bold step, agreeing with the labor union on the implementation of a five-day workweek system ahead of other companies. The enforcement on July 1 last year brought about a lot of problems, however, such as leave and wage readjustment. Such matters are emerge as real bones of contention in labor-management relations. However, KEPCO managed to resolve them satisfactorily, which would have been impossible had it not been for its managerial renovation.
Value management has been established. Innovative finance control and management has been put in place. Investment efficiency has increased. Personnel administration has improved with a lot of power delegated from head office to the field offices. Thanks to a series of the reform measures, KEPCO has been able to overcome numerous problems.
The price of bituminous coal alone rose by 60 percent, causing a 6.6 percent hike in purchase costs for power production. However, the company did not rush to raise electricity charges. Rather, it lowered the rates by 1.5 percent. This notwithstanding, KEPCO succeeded in getting over the shortfalls in revenue through an aggressive and innovative management approach, chalking up a 8.8 percent increase in business profits, 28.7 percent in current account, and 24.4 percent in net profits.
KEPCO is now operating two power plants in the Philippines, which it took over in 1995. They have since been in continuous operation without incurring even a single case of a labor dispute with local workers. Now, KEPCO's power generating business in the Philippines has grown to be included among the top 10 enterprises in the island nation
Managerial and institutional transparency in the Philippines is surprisingly higher than outsiders might think it to be. This could, in large part, be thanks to the Western influence, particularly the United States, and the early entry of many multinational corporations. Therefore, no foreign firms can think of being a success there unless they are transparent in management. With this in mind, KEPCO has studied the legal and institutional systems of the Philippines and benchmarked successful international conglomerates in the Southeast Asian nation.
KEPCO is now conducting a number of social programs in the interest of local people, building gyms, teaching computer skills, job skills in general, and something of Korean culture in the form of Taekwondo. It supplied ambulances and garbage trucks in addition to medical aid in the spirit of people-to-people diplomacy. It also supplied $5 million in order to help the Philippine government with its project to supply power to remote rural areas.
Still, KEPCO refuses to rest on its laurels. To survive in this drastically changing business environment and realize continued development, we vow to spearhead change and reform, said CEO Han Joon-ho, KEPCO..