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Kim Shin Bae, CEO, SK Telecom

  • Story Highlights
  • Kim Shin Bae, CEO of SK Telecom speaks in CNN's The Boardroom
  • SK Telecom is South Korea's largest mobile phone carrier
  • Kim led the company against national tradition, scrapping corporate hierarchy
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(CNN) -- In the high-tech world of South Korea, it's difficult to find someone who isn't plugged in. Demand here is fulfilled by the country's largest mobile phone carrier, SK Telecom.

CEO of SK Telecom, Kim Shin Bae

CEO of SK Telecom, Kim Shin Bae spoke to CNN's Andrew Stevens in The Boardroom.

It's ubiquitous branding hints at the 51 percent market share the company holds. Earlier this year the company broke with South Korea's rigid corporate tradition. They scrapped the hierarchy in favor of a flatter management structure in the hope of encouraging risk taking and creativity.

These decisions were the making of CEO, Kim Shin Bae, who's been at the helm since 2004. He sat down with CNN's Andrew Stevens to explain the hidden value of corporate culture.

Kim: I think we need to be more creative and innovative in order to be a global communications leader. To create a new culture, we broke from the Asian tradition of seniority based hierarchical structure by introducing a single level manager system. This is for the open-minded communication and knowledge sharing between employees and a speedy organizational process. We introduced it more than a year ago and I think it's selling quite well.

Stevens: So how difficult was it to get your people on board with these changes?

Kim: Korea is basically a Confucian culture, so we respect the elders and the senior people. So with the senior people, the hard debate with the senior people is the difficulty. But by introducing the single level structure we could encourage more free communication.

Stevens: Since the 1960s, the South Korean economy has developed enormously, so why was there a need to change it?

Kim: As you know, during the last several decades of South Korean economic growth, manufacturing was the real core industry. In manufacturing the hierarchy code -- the strong top down leadership -- is very effective and sometimes very efficient. Now the world is changing, especially for IT services and communication services. Creativity and innovation from the very free communication knowledge sharing is more and more important so I think we need that kind of change especially for SK Telecom.

Stevens: Today is the company's monthly "Funergizer" -- a lunch-time entertainment for employees held in the lobby of SK Telecom's headquarters.

Kim: I think the happy employees can make others happy. Their work their productivity will improve. So every month during lunch time, we introduce the talent -- professionals of music, dance, or drum players for employees.

It will also help the creative and flexible corporate culture, I think. All those have the synergy to change the culture. I think the corporate culture is much more important than the system or process. Our business environment changes very quickly. Once the system or process is set up, then it might have some other shackle for us to change. But the corporate culture drives the people, even though they are not the older this would do it this way and that way, so corporate culture I think is very important.

Stevens: We've been talking a lot about the softer issues, about softer employee relations, rather than the structure and processes of corporate South Korea. Do you think the softer issues are becoming more important right across industry here?

Kim: I think with the rise of China and India as a manufacturing base, we need to be more toward the service oriented company which requires more creativity, so I think it's very natural. But I think that creativity and efficiency should take balance that's why we also strongly implement the activities at SK Telecom together. So it's this kind of ambidexterity, efficiency and creativity should take balance. E-mail to a friend E-mail to a friend

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