New Order: LG reshuffles top management again

New Order: LG reshuffles top management again

Author | Source: The Economic Times | Thursday, Jan 05,2006 8:13 AM

New Order: LG reshuffles top management again

LG Electronics has done yet another round of reshuffle. This time, to bring some semblance of consolidation within the portfolio. This marks a shift in MD, KR Kim's earlier initiatives of creating smaller roles under separate heads for a focused product strategy. The new restructuring is aimed at consolidating several functions under few larger business groups without diluting the focus on individual product categories.

Company sources said LG's new sales and marketing structure has now been divided into four broad business groups - consumer electronics, refrigerators, air conditioners and washing machines - each under a head. Amitabh Tiwari, former Product Group Head (PGH) for CTV has now been elevated as Business Group Head (BGH) for consumer electronics.

Similarly, Anil Arora becomes BGH for Refrigerators against his erstwhile responsibility as PGH for frost-free refrigerators, and Ajay Bajaj who was heading Retail ACs (windows and split) has been promoted as the BGH for the entire AC range. The head of the fourth business group - washing machines and microwave ovens, is yet to be identified. Sources say Rajeev Jain, PGH for washing machines might get elevated as the BGH with two PGHs reporting to him.

Each of these BGHs have PGHs reporting into them. PGHs earlier reported directly to the MD. In consumer electronics, Sanjiv Jain who headed audios, is now being moved as PGH for CTVs. On the other hand, Rishi Tandon will head audios and Prasanna Raghavan will be PGH for plasma display panels.

The trio will report to Tiwari instead of Kim. In refrigerators, Prashant K Das and Rohit Pandit have been placed as PGH for frost-free and direct cool respectively. Das was earlier CTV PGH for South and West based out of Pune, while Pandit used to handled Direct Cool. In airconditioners, Saurav Baisakhya who was handling CTVs, has been made PGH for retail ACs while Bijou George retains his role as the head of commercial ACs.

There are advantages of such a structure, say insiders. “In the wake of high target expectations this year, the money generated by one category in the BGH can be used to propel another which is needed. This cooperation was difficult in separate PGH system followed earlier,” said one.

While sources within the company call it a consolidation move, some believe there's more on Mr Kim's mind. “The MD actually wants to reduce his dependence on PGH who earlier reported directly to him,” said a source close to the company. So now if any of the BGHs or PGHs quit, work will continue seamlessly. The new dispensation surprises many. For almost three years LG had created smaller responsibilities under individuals to respond faster to the market.

Beginning with bifurcation of sales and marketing at functional levels and then regional levels, the durables giant operated with PGHs. The new move to bring PGHs under BGHs is being seen as a step backward. This is also the second reshuffle that LG has taken in the last six months.

Meanwhile, in another development, to align its marcom with the new internal reorganisation, LG has placed its consumer electronics and IT account with Lowe. A few weeks back, LG had also consolidated its complete Home Appliances advertising through Capital Advertising. The other agencies - O&M and McCann-Erickson - which were roped in over a year back have moved out in the fresh round of reshuffle.

According to the company, the review had an objective of integrating its Colour Televisions (CTV), Flat Panel Displays (FPD's), Audios (DAV) and IT categories. The consumer electronics and IT Advertising account is estimated to be 60% of the overall advertising spends of the company. The balance is shared between Home Appliances and GSM business.

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