Seeking to avert as much intervention by the International Monetary Fund (IMF) as possible, Hyundai’s Research Institute has helpfully published a list of reasons why corporate structural reforms – rescue packages – may fail. It believes that outside consultants should only carry out their role as executors, not as decision makers; that reform should happen over a long period, not quickly; that operational structure should be overhauled before closing plants and laying off workers; business performance shouldn’t be judged strictly on paper profit or losses; not all profitable businesses need to be retained; and that corporations shouldn’t seek new markets while re-trenching. It warns that companies should be prepared for a second foreign exchange crisis that could hit in 2001-2003 as interest and principle will have to be repaid massively. It says the current crisis is not like the oil shocks of the past and that some of its long-term effects are predictable. Lastly it says it’s necessary for companies adapt to US-style management methods and take a bath on numbers if necessary.
