• Title/Summary/Keyword: External Environment

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Problems of administrative area system in Korea and reforming direction (한국 행정구역체계의 문제점과 개편의 방향)

  • ;Yim, Seok-Hoi
    • Journal of the Korean Geographical Society
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    • v.29 no.1
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    • pp.65-83
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    • 1994
  • Sevaral problems of administrative area sysem in Korea have been brought up for a long time. Because its frame has remained since Chosun and Japanese colonial period in spite of changing local administrative environment in accordance with rapid industrialization and urbanization. Recent reform of city (Shi)- county (Gun) integration is derived from this argument. But problems which permeate deeply overall system cannot be solved by partial reorganization of Shi-Gun. They may be rationalized only through the reform of the whole system. The aims of this study are to analyze problems of administrative area system entirelr and to discuss the direction of its reform from that point of view. Major problems of administrative area system are summed up into the followings. Firstly, it is found that administrative hierarchies are too many levels. Contemporary administrative hierarchical structure is 4 levels: regional autonomous government (Tukpyolshi, Jik'halshi, Do), local autonomous government (Shi, Gun), two leveis of auxiliary administrative area (Up, Myun and Ri). These hierarchies were established in late period of Chosun which transportation was undeveloped and residential activity space was confined. But today developing transportion and expanding sphere of life don't need administrative hierarchical structurl with many levels. Besides developing administrative technology reduces administrative space by degrees. Many levels of contemporary administrative hierarchical structure are main factor of administrative inefficency, discording with settlement system. Second problem is that Tukpyolshi and Jik'halshi - cities under direct control of the central government as metropolitan area - underbounded cities. Underbounded city discomforts residential life and increases external elects of local pulic services. Especially this problem is Seoul, Pusan and Daegu. Third problem is that Do-areas are mostly two larger in integrating into single sphere of life. In fact each of them consistes of two or three sphere of life. Fourth Problem is metropolitan government system that central city is seperated from complementary area, i.e. Do. It brings about weakening the economic force of Do. Fifth problem is that several cities divided single sphere of life. It is main factor of finantial inefficency and facing difficult regional administration. Finally necessity of rural parish (Myun.) is diminished gradually with higher order center oriented activty of rural residents. First of all administrative area system should corresponds with substantial sphere of life in order to solve these problems. Followings are some key directions this study proposes on the reform of administrative area system from that standpoint. 1. Principles of reorgnization -- integration of central dty with complementary area. -- correspondence of administrative hierarchical structure with settlement system. -- correspondence of boundary of administrative area with sphere of life. 2. Reform strategy -- Jik'halshi is integrated with Do and is under the contol of Do. -- Small Seoul shi (city) which have special functions as captal is demarcated in Seoul tukpyolshi and 22 autonomous distrcts of Seoul tukpyolshi is integrated into 3-4 cities. -- Neighboring cities (Shies) in single sphere of life are intrgrated into single city (Shj). -- Myun and Ri are abolished in rural region and new unit of local administrative area on the basis of lowest order sphere of life into which 3-4 Ries are integrated replaces them.

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Value of Information Technology Outsourcing: An Empirical Analysis of Korean Industries (IT 아웃소싱의 가치에 관한 연구: 한국 산업에 대한 실증분석)

  • Han, Kun-Soo;Lee, Kang-Bae
    • Asia pacific journal of information systems
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    • v.20 no.3
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    • pp.115-137
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    • 2010
  • Information technology (IT) outsourcing, the use of a third-party vendor to provide IT services, started in the late 1980s and early 1990s in Korea, and has increased rapidly since 2000. Recently, firms have increased their efforts to capture greater value from IT outsourcing. To date, there have been a large number of studies on IT outsourcing. Most prior studies on IT outsourcing have focused on outsourcing practices and decisions, and little attention has been paid to objectively measuring the value of IT outsourcing. In addition, studies that examined the performance of IT outsourcing have mainly relied on anecdotal evidence or practitioners' perceptions. Our study examines the contribution of IT outsourcing to economic growth in Korean industries over the 1990 to 2007 period, using a production function framework and a panel data set for 54 industries constructed from input-output tables, fixed-capital formation tables, and employment tables. Based on the framework and estimation procedures that Han, Kauffman and Nault (2010) used to examine the economic impact of IT outsourcing in U.S. industries, we evaluate the impact of IT outsourcing on output and productivity in Korean industries. Because IT outsourcing started to grow at a significantly more rapid pace in 2000, we compare the impact of IT outsourcing in pre- and post-2000 periods. Our industry-level panel data cover a large proportion of Korean economy-54 out of 58 Korean industries. This allows us greater opportunity to assess the impacts of IT outsourcing on objective performance measures, such as output and productivity. Using IT outsourcing and IT capital as our primary independent variables, we employ an extended Cobb-Douglas production function in which both variables are treated as factor inputs. We also derive and estimate a labor productivity equation to assess the impact of our IT variables on labor productivity. We use data from seven years (1990, 1993, 2000, 2003, 2005, 2006, and 2007) for which both input-output tables and fixed-capital formation tables are available. Combining the input-output tables and fixed-capital formation tables resulted in 54 industries. IT outsourcing is measured as the value of computer-related services purchased by each industry in a given year. All the variables have been converted to 2000 Korean Won using GDP deflators. To calculate labor hours, we use the average work hours for each sector provided by the OECD. To effectively control for heteroskedasticity and autocorrelation present in our dataset, we use the feasible generalized least squares (FGLS) procedures. Because the AR1 process may be industry-specific (i.e., panel-specific), we consider both common AR1 and panel-specific AR1 (PSAR1) processes in our estimations. We also include year dummies to control for year-specific effects common across industries, and sector dummies (as defined in the GDP deflator) to control for time-invariant sector-specific effects. Based on the full sample of 378 observations, we find that a 1% increase in IT outsourcing is associated with a 0.012~0.014% increase in gross output and a 1% increase in IT capital is associated with a 0.024~0.027% increase in gross output. To compare the contribution of IT outsourcing relative to that of IT capital, we examined gross marginal product (GMP). The average GMP of IT outsourcing was 6.423, which is substantially greater than that of IT capital at 2.093. This indicates that on average if an industry invests KRW 1 millon, it can increase its output by KRW 6.4 million. In terms of the contribution to labor productivity, we find that a 1% increase in IT outsourcing is associated with a 0.009~0.01% increase in labor productivity while a 1% increase in IT capital is associated with a 0.024~0.025% increase in labor productivity. Overall, our results indicate that IT outsourcing has made positive and economically meaningful contributions to output and productivity in Korean industries over the 1990 to 2007 period. The average GMP of IT outsourcing we report about Korean industries is 1.44 times greater than that in U.S. industries reported in Han et al. (2010). Further, we find that the contribution of IT outsourcing has been significantly greater in the 2000~2007 period during which the growth of IT outsourcing accelerated. Our study provides implication for policymakers and managers. First, our results suggest that Korean industries can capture further benefits by increasing investments in IT outsourcing. Second, our analyses and results provide a basis for managers to assess the impact of investments in IT outsourcing and IT capital in an objective and quantitative manner. Building on our study, future research should examine the impact of IT outsourcing at a more detailed industry level and the firm level.

Effects of Light Sources, Light Quality on the Growth Response of Leafy Vegetables in Closed-type Plant Factory System (완전제어형 식물공장에서 광원, 광질에 따른 엽채류 6종의 생육반응)

  • Kim, Sang Bum;Lee, Kyung Mi;Kim, Hae Ran;You, Young Han
    • Korean Journal of Ecology and Environment
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    • v.47 no.1
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    • pp.32-40
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    • 2014
  • This study was conducted to evaluate the growth response of economical six leafy vegetables that are crown daisy, pak-choi and four kinds of lettuce (Red leaf lettuce, Green leaf lettuce, Head lettuce, Romaine lettuce) by light treatment of LED in plant factory. The light treatments were composed of red, blue, red+farred, red+blue, red+blue+white LEDs, irradiation time ratio of the red and blue LED per minute (1 : 1, 2 : 1, 5 : 1, 10 : 1), and duty ratio of mixed light (100%, 99%, 97%). The following results were obtained in different LED light sources treatments: Shoot biomass and S/R ratio of romaine lettuce were the highest under mixed red+blue LEDs. S/R ratio of head lettuce was higher under mixed red+blue+white LEDs than red+blue LEDs. The others showed no difference in LED light treatment. Shoot biomass, total biomass and S/R ratio of green lettuce, head lettuce and pak-choi were highest in the higher red ratio (5 : 1) on irradiation time of red : blue LED ratios. By the different duty ratio (red+blue and red+blue+white LEDs), Under the mixed light of red+blue, shoot and root biomass of crown daisy and romaine lettuce were high in duty ratio of 100% and 99%, and S/R ratio was highest in all the 6 kinds in duty ratio of 97%. All the 6 kinds showed a fine growth state in low duty ratio (97%). Green lettuce, romaine lettuce and pak-choi showed relatively high shoot biomass and total biomass in low duty ratio of 97% under the mixed light of red+blue+white. S/R ratio of romaine lettuce and head lettuce were highest in the duty ratio of 97% with red+blue+white LEDs. Thus, we can cultivate stably without reference to external factors, if we use appropriate light sources and light quality in closed-type plant factory.

Development of teaching-learning lesson plan untilizing TAI model based on module, used in survey subject of construction department - By applying standard-based assessment system for technical subject (건설계열 측량교과에서 활용할 모듈 기반의 TAI 모형 적용 교수-학습 과정안 개발 - 전문교과 성취평가제를 적용하여)

  • Lee, Ju-Min;Jang, Young-Il;Park, Wan-Shin
    • 대한공업교육학회지
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    • v.38 no.2
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    • pp.89-113
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    • 2013
  • The study started from the point that learners should be basically equipped to quickly respond to changes in demand for future human resources efficiently and effectively, and an attitude to take part in learning voluntarily should thus be cultivated. To this end, the author applied the TAI model based on a module as a class strategy to solve problems related to several classes occurred in specialized high schools. This application of the TAI model was also motivated by the necessity for designing an appropriate teaching-learning method that encourages improvement of self-learning capacity, consistent learning motivation, and willingness rather than external factors. Through this work, the author aims to heighten the interest of learners and improve endurance in learning. The study results are as follows. First, the learning unit was structuralized as a module and then learning stages were proceeded with so that capacity to adapt to learning would improve. The achievement standard (learning goal) was structuralized in a module type by analyzing and reorganizing the textbook considering the link between the actual practice field and a curriculum based on subject characteristics. Through the process of module type learning stages, the student's capacity to ascertain characteristics of units and to adapt to learning both improved. Second, through application of a TAI model based on a module, Self-Directed Learning capacity and capacity to adapt to a new field improved. By applying the module, Self-Directed Learning could be accomplished more effectively than in the existing passive learning environment. By grafting cooperative learning of the TAI model, students had greater interest and achievement in classes, self-confidence and community consciousness, and an opportunity to broaden their thinking. In particular, improvement of self-confidence is effective in cultivating the capacity required in industrial society to transcend the learning of simple functions and knowledge, as well as the capacity to adapt to new environments. Third, by solving tasks focused on fields related to industrial sites, not only actual survey capacity but also additional capacity to identify and solve tasks through various experiences improved. Furthermore, it was helpful for students to have interest and motivation about their own life and learning to cultivate the qualities and capacity to adapt to the working world where new knowledge and technology rapidly change. Fourth, by applying a standard-based assessment system for technical subjects introduced in 2012 to model design for learning plans, clearer and more objective assessment criteria were arranged, and individual learning through instruction at each achievement level could be accomplished. This improved achievement level of individual learners was helpful in reaching achievement goals at specific levels by overcoming the disadvantages of cooperative learning in each group.

Relationships between Collective Intelligence Quality, Its Determinants, and Usefulness: A Comparative Study between Wiki Service and Q&A Service in Perspective of Korean Users (집단지성의 품질, 그 결정요인, 유용성의 관계: 수용자 관점에서 한국의 위키서비스와 Q&A 서비스의 비교)

  • Joo, Jaehun;Normatov, Ismatilla R.
    • Asia pacific journal of information systems
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    • v.22 no.4
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    • pp.75-99
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    • 2012
  • Innovation can come from inside or outside organizations. Recently, organizations have begun turning to external knowledge more often, through various forms of collective intelligence (CI) as collaborative platform to solve complex problems. Several factors facilitate this CI utilization phenomenon. First, with the rapid development of Internet and social media, numerous web applications have become available to millions of the Internet users over the past few decades. Web 2.0 and social media have become innovative web applications that provide an environment for human social interaction and collaboration. Second, the diffusion of simple and easy-to-use technologies that enable users to interact and design web applications without programming skills have led to vast, previously unknown amounts of user-generated content. Finally, the Internet has enabled communities to connect and collaborate, creating a virtual world of CI. In this study, web enabled CI is defined as a composed ability of individuals who are acting as a single cognitive unit to achieve common goals, think reasonably, solve problems, make decisions, carry out complex tasks, and develop creative ideas collectively through participation and collaboration on the web. Although CI plays a critical role in organizational innovation and collaboration, the dubious quality of CI is still problem that is difficult to solve. In general, the quality level of content collected from the crowd is lower than that from professionals. Thus, it is important to identify determinants of CI quality and to analyze the relationship between CI quality and its usefulness. However, there is a lack of empirical study on the quality factors of web-enabled CI. There exist a variety of web enabled CI sites such as Threadless, iStockphoto or InnoCentive, Wikipedia, and Youtube. One of the most successful forms of web-enabled CI is the Wikipedia online encyclopedia, accessible all over the world. Another one example is Naver KnowledgeiN, a typical and popular CI site offering question and answer (Q&A) services. It is necessary to study whether or not different types of CI have a different effect on CI quality and its usefulness. Thus, the purpose of this paper is to answer to following research questions: ${\bullet}$ What determinants are important to CI quality? ${\bullet}$ What is the relationship between CI quality factors and the usefulness of web-enabled CI? ${\bullet}$ Does CI type have a moderating effect on the relationship between CI quality, its determinants, and CI usefulness? Online survey using Google Docs with email and Kakao Talk was conducted for collecting data from Wikipedia and Naver KnowledgeiN users. A totoal of 490 valid responses were collected, where users of Wikipedia were 220 while users of Naver KnowledgeiN were 270. Expertise of contributors, community size, and diversity of contributors were identified as core determinants of perceived CI quality. Perceived CI quality has significantly influenced perceived CI usefulness from a user's perspective. For improving CI quality, it is believed that organizations should ensure proper crowd size, facilitate CI contributors' diversity and attract as many expert contributors as possible. Hypotheses that CI type plays a role of moderator were partially supported. First, the relationship between expertise of contributors and perceived CI quality was different according to CI type. The expertise of contributors played a more important role in CI quality in the case of Q&A services such as Knowledge iN compared to wiki services such as Wikipedia. This implies that Q&A service requires more expertise and experiences in particular areas rather than the case of Wiki service to improve service quality. Second, the relationship between community size and perceived CI quality was different according to CI type. The community size has a greater effect on CI quality in case of Wiki service than that of Q&A service. The number of contributors in Wikipeda is important because Wiki is an encyclopedia service which is edited and revised repeatedly from many contributors while the answer given in Naver Knowledge iN can not be corrected by others. Finally, CI quality has a greater effect on its usefulness in case of Wiki service rather than Q&A service. In this paper, we suggested implications for practitioners and theorists. Organizations offering services based on collective intelligence try to improve expertise of contributeros, to increase the number of contributors, and to facilitate participation of various contributors.

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Study on true nature of the Fung(風) and that of application to the medicine (풍(風)의 본질(本質)과 의학(醫學)에서의 운용(運用)에 관(關)한 고찰(考察))

  • Back, Sang Ryong;Park, Chan Kug
    • Journal of Korean Medical classics
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    • v.7
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    • pp.198-231
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    • 1994
  • Up to now, after I had examined the relation between the origin of Fung(風) and Gi(氣) and the mean of Fung in medical science, I obtained the conclusion being as follows. The first, Fung(風) means a flux of Gi(氣) and Gi shows the process by virtue of the form of Fung, namely, Fung means motion of Gi. In other words, it is flow of power. Accordingly, the process of all power can give a name Fung. The second, Samul(事物) ceaselessly interchange with the external world to sustain the existence and life of themselves. And they make a adequate confrontation against the pressure of the outside. This the motive power of life action(生命活動) is Gi and shows its the process on the strength of Fung. The third, Samul(事物) incessantly releases power which it has to the outside. Power released to the outside forms the territory of the established power in the environment of them and keep up their substance(實體) in the space time(時空). It can be name Fung because the field(場) of this power incessantly flows. The fourth, man operates life on the ground of the creation of his own vigor(生氣) for himself as the life body(生命體) of the independence and self-support. The occurence of this vigor and the adjustment process(調節作用) is supervised by Gan(肝). That is to say, Gan plays a role to regulate and manage the process of Fung or the action of vigor with Fung-Zang(風臟). The fifth, because the Gi-Gi adjustment process(氣機調節作用) of Gan is the same as the process of Fung, Fung that operates the cause of a disease is attributed to the disharmony of the process of the human body Gi-Gi. Therefore, the generating pathological change is attributed to the extraordinary of the function by the incongruity of Gi-Gi(氣機) or the disorder of the direct motion of Gi-Hyul(氣血). Because the incongruity of this Gi-Gi of the human body gives rise to the abnormal of Zung-Gi(正氣) in the human body properly cannot cope with the invasion of 'Oi-Sa(外邪). Furthermore, Fung serves as the mediation body of the invasion of other Sa-Gi(邪氣) because of its dynamics, By virtue of this reason, Fung is named the head of all disease. And because the incongruity of the Gi-Gi has each other form according to Zang-Bu(臟腑), Kyung-Lak(經絡), and a region, the symptoms of a disease appear differently in line with them as well. The sixth, Fung-byung(風病) is approximately separated Zung-Fung(中風) and Fung-byung(猍義의 風病). Zung-fung and Fung-byung is to be attributed to the major invasion of each Jung-gi and Fung-sa(正氣와 風邪). But these two kinds stir up the problem to the direct motion of Gi-hyul(氣血) and the harmony of Gi-Gi in the human body. When one cures it, therefore, Zung-fung has to rectify Gi-Gi and the circulation of Gi-hyul on the basis of the supplement of Jung-gi(正氣) and Fung-byung must make the harmony of Gi-Gi with the Gu-fung(驅風). -Go-gi(調氣), Sun-Gi(順氣). Hang-Gi(行氣) - All existing living things as well as man maintain life on the ground of the pertinent harmony between the soul(精神) and the body(肉體). As soon as the harmony falls down, simultaneously life disappears as well. And Fung which means the outside process between Gi(氣) and Gi(氣) makes the action of their life cooperative and unified, Accordingy, the understanding of Fung, first, has to start wi th the whole thought that not only all Samul(事物) but also the soul and the body are one.

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Monsoon Inflow as a Major Source of In-lake Phosphorus (호수내 인의 주요원으로 몬순 유입수)

  • An, Kwang-Guk
    • Korean Journal of Ecology and Environment
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    • v.33 no.3 s.91
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    • pp.222-229
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    • 2000
  • Spatial and temporal variation of phosphorus in response to intensity of summer monsoon was evaluated in Taechung Reservoir during 1993${\sim}$1994. Total phosphorus (TP) averaged 31 ${\mu}$g/l during the study and varied from 6 to 197 ${\mu}$g/l. Concentrations of TP were highest in the headwaters during the monsoon of July${\sim}$August 1993, and these values were mainly made of particulate P and were closely associated (R$^{2}$=0.74, p<0.001) with high inorganic suspended solids (NVSS). In-lake TP in the headwaters was mainly influenced by the watershed runoff and declined toward the dam. Values of TP downlake was only one-fifth of the peak in the headwaters and had no correlation with NVSS. In 1994, inlake TP was markedly lower relative to 1993 and showed low spatial and temporal variation. Maximum TP during monsoon 1994 in the headwaters and mid-lake was 72% and 52% lower, respectively, than in those two zones in 1993 whereas TP downlake was similar between the two years. These results suggest that temporal variation downlake is much less influenced by seasonal inflow compared to the haedwaters. In 1993, mean TP before fall overturn, based on average value for all sites, was significantly (t=5.99, p<0.001) greater than the mean after fall overturn, whereas in 1994 mean TP after fall overturn (32 ${\mu}$g/l) was greater. This outcome indicates that in 1993 major P-input originated from the external source from the watershed during the intense monsoon, whereas in 1994 internal processes dominated during the weak monsoon. Overall data suggest that annual budget of inlake P is regulated by intensity of the summer monsoon, and phosphorus data measured at single site near the dam or headwater zone may not be represent seasonal trends of the system due to large spatial variation of Taechung Reservoir.

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Study for the Conservation Treatment of the Stele for National Preceptor Hongbeop from the Jeongtosa Temple Site in Chungju (충주 정토사지 홍법국사탑비의 보존과학적 연구)

  • Chae, Woomin;Hwang, Hyunsung
    • Conservation Science in Museum
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    • v.19
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    • pp.1-18
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    • 2018
  • The Stele for National Preceptor Hongbeop from the Jeongtosa Temple site in Chungju is one of the most important stone cultural heritage items for exemplifying the style of the Goryeo era. Despite its obvious value, this relic has been stored in a weathered condition at the National Museum of Korea. It had suffered various dismantling and displacements during the Japanese colonial period and had long been exposed in the open air. The stele was selected as a subject for the Stone Monuments Restoration Project launched by the National Museum of Korea in 2015. In preparation for its outdoor exhibition as part of the restoration project, this study investigated the characteristics of its materials, produced a map of its deterioration from weathering, and carried out ultrasonic analysis of the materials to provide findings useful for conservation treatment. The materials analysis revealed that the turtle-shaped pedestal of the stele was made from two-mica granite consisting of medium-grained quartz, plagioclase, alkali feldspar, biotite, and muscovite. Its body stone is crystalline marble, the rock-forming mineral in which is medium-grained calcite in a rose-pink color with dark grey spots. The dragon top of the stele is made of crystalline marble, the major component of which is medium-grained calcite of a light-grey color. The deterioration consists of 21.5% abrasion on the stone body, with its south face most damaged, and 18.6% granular disintegration, with the north face most damaged. The ultrasonic material characterization conducted for mapping the general condition of weathering shows low values on the parts-assembly area of the turtle-shaped pedestal and on the upper portion of the stone body. It is considered that there is dislocation due to partial blistering and fracturing as well as to the differences in surface treatment. Prior to the outdoor exhibition of the stele, the surface was cleaned of contaminants and was consolidated based on the scientific investigation in order to prevent weathering from the external environment.

Impact of Corporate Entrepreneurship, Human Resource Innovation on the Firms' Innovation Activities and Nonfinancial Performance: A Exploratory Research of KOSDAQ Companies (사내기업가정신, 인적자원혁신성이 기업혁신활동과 비재무적 성과에 미치는 영향에 관한 탐색적 연구)

  • Hwangbo, Yun;Bae, Kun Seok
    • Asia-Pacific Journal of Business Venturing and Entrepreneurship
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    • v.12 no.4
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    • pp.1-14
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    • 2017
  • New business management methods different from the past are necessary because of the rapid changes of the corporates' environment. KOSDAQ(Korean Securities Dealers Automated Quotation) companies should be expected the more affirmative business performance of companies by listing, but it is a well-known that they have problems of low business performance mostly. This paper aims to investigate the influential factors on enhancing corporate innovation and nonfinantial business performance, and to clarify practical measures and present a solution of KOSDAQ companies' problems through analysis of previous researches and an empirical research. This research present corporate entrepreneurship and human resources innovation as impact factors on the business performance to apply finely the path of technological innovation for the solution of the relevance investigation limit between the complexity of corporates' innovation paths and the firms' performance. And also knowledge management activities and external networks management or the firms have been adopted as a corporate innovation activities for free from quantitative measures, such as conventional research and development(R&D) activities by considering recent corporates' knowledge business operations. The results of the empirical analysis shows that significant impact factors on corporate innovation activities are the firms' propensities of competitive advantage initiative, risk taking and chief executive officer's innovation. These can be interpreted that the CEOs' innovation propensity should be enhanced for stimulating corporate's innovaton activities, which include the CEOs' interest in the development of new technology, the exploiting new businesses and their support of the innovation discipline for employees. In addition, it can be said that it is necessary to intensify more initiatives within those enterprise for enhancing the competitive advantage in the identical industry. The significant impact factors of corporate entrepreneurship and human resource innovation on the non-financial performance are resulted as the propensities of firms' competitive advantage initiative, CEOs' innovation and employees' innovaton. This shows that the higher propensities of firms' competitive advantage initiative, CEOs' innovation and employees' innovaton, the higher the cognitive degrees of business performance within each corporate, which include the members' awareness about firms' sales growth, market share growth, profit ratio growth, customers' preference and corporates' awareness.

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The Effects of e-Business on Business Performance - In the home-shopping industry - (e-비즈니스가 경영성과에 미치는 영향 -홈쇼핑을 중심으로-)

  • Kim, Sae-Jung;Ahn, Seon-Sook
    • Management & Information Systems Review
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    • v.22
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    • pp.137-165
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    • 2007
  • It seems high time to increase productivity by adopting e-business to overcome challenges posed by both external factors including the appreciation of Korean won, oil hikes and fierce global competition and domestic issues represented by disparities between large corporations and small and medium enterprises (SMEs), Seoul metropolitan and local cities, and export and domestic demand all of which weaken future growth engines in the Korean economy. The demands of the globalization era are for innovative changes in businessprocess and industrial structure aiming for creating new values. To this end, e-business is expected to play a core role in the sophistication of the Korean economy through new values and innovation. In order to examine business performance in e-business-adopting industries, this study analyzed the home shopping industry by closely looking into the financial ratios including the ratio of net profit to sales, the ratio of operation income to sales, the ratio of gross cost to sales cost, the ratio of gross cost to selling, general and administrative (SG&A) expense, and return of investment (ROI). This study, for best outcome, referred to corporate financial statements as a main resource to calculate financial ratios by utilizing Data Analysis, Retrieval and Transfer System (DART) of the Financial Supervisory Service, one of the Korea's financial supervisory authorities. First of all, the result of the trend analysis on the ratio of net profit to sales is as following. CJ Home Shopping has registered a remarkable increase in its ratio of net profit rate to sales since 2002 while its competitors find it hard to catch up with CJ's stunning performances. This is partly due to the efficient management compared to CJ's value of capital. Such significance, if the current trend continues, will make the front-runner assume the largest market share. On the other hand, GS Home Shopping, despite its best organized system and largest value of capital among others, lacks efficiency in management. Second of all, the result of the trend analysis on the ratio of operation income to sales is as following. Both CJ Home Shopping and GS Home Shopping have, until 2004, recorded similar growth trend. However, while CJ Home Shopping's operating income continued to increase in 2005, GS Home Shopping observed its operating income declining which resulted in the increasing income gap with CJ Home Shopping. While CJ Home Shopping with the largest market share in home shopping industryis engaged in aggressive marketing, GS Home Shopping due to its stability-driven management strategies falls behind CJ again in the ratio of operation income to sales in spite of its favorable management environment including its large capital. Companies in the Group B were established in the same year of 2001. NS Home Shopping was the first in the Group B to shift its loss to profit. Woori Home Shopping has continued to post operating loss for three consecutive years and finally was sold to Lotte Group in 2007, but since then, has registered a continuing increase in net income on sales. Third of all, the result of the trend analysis on the ratio of gross cost to sales cost is as following. Since home shopping falls into sales business, its cost of sales is much lower than that of other types of business such as manufacturing industry. Since 2002 in gross costs including cost of sales, SG&A expense, and non-operating expense, cost of sales turned out to have remarkably decreased. Group B has also posted a notable decline in the same sector since 2002. Fourth of all, the result of the trend analysis on the ratio of gross cost to SG&A expense is as following. Due to its unique characteristics, the home shopping industry usually posts ahigh ratio of SG&A expense. However, more than 80% of SG&A expense means the result of lax management and at the same time, a sharp lower net income on sales than other industries. Last but not least, the result of the trend analysis on ROI is as following. As for CJ Home Shopping, the curve of ROI looks similar to that of its investment on fixed assets. As it turned out, the company's ratio of fixed assets to operating income skyrocketed in 2004 and 2005. As far as GS Home Shopping is concerned, its fixed assets are not as much as that of CJ Home Shopping. Consequently, competition in the home shopping industry, at the moment, is among CJ, GS, Hyundai, NS and Woori Home Shoppings, and all of them need to more thoroughly manage their costs. In order for the late-comers of Group B and other home shopping companies to advance further, the current lax management should be reformed particularly on their SG&A expense sector. Provided that the total sales volume in the Internet shopping sector is projected to grow over 20 trillion won by the year 2010, it is concluded that all the participants in the home shopping industry should put strategies on efficient management on costs and expenses as their top priority rather than increase revenues, if they hope to grow even further after 2007.

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