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7 July 2014

Risk management a top priority for leading South Korean businesses

Content team

Risk management is one of the top priorities for South Korea's leading companies at present.

A study carried out by the Federation of Korean Industries (FKI) has revealed coping with business threats and improving corporate stability are the main concerns for the nation's top 30 organisations, which include multinational giants such as Samsung, LG, SK and Hyundai.

The FKI stated: "In effect, almost eight out of ten conglomerates are thinking of potential risks and challenges."

Four in ten Korean businesses said they are preparing themselves for management-related challenges in the coming months, while more than a third (36.6 per cent) claimed they are looking into restructuring as a means of ensuring stability, Yonhap News Agency reports.

The majority of businesses (66.7 per cent) said they expect economic conditions to be relatively unchanged in the second half of this year. Some 20 per cent forecast improvement, while the remainder think the situation may deteriorate.

Optimism remains surrounding investment, with 86.7 per cent of respondents revealing they think the plans that were set out at the start of the year will be met or surpassed. Seven in ten businesses pointed to domestic market conditions and the state of the global economy as the factors that will affect investment most.

An improvement in the Korean economy was cited as the development that would encourage most corporate investment, being cited by 46.7 per cent of organisations. Some 23.3 per cent claimed a lightening of the regulatory burden would help on this front, while 16.6 per cent called for tax breaks.

When asked about the challenges facing their organisations, more than a quarter (26.7 per cent) of respondents highlighted profit concerns, while 23.3 per cent pointed to weak levels of domestic consumption.

Some 13.3 per cent cited a difficult export market, while ten per cent said they are worried about the impact of growing production costs.

Content team, Bureau van Dijk

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