These Scions Are Pros; South Korea wrestles with a tough question: if the son has the chops, is it bad for him to take over as CEO?(chief executive officer)

Byline: B. J. Lee

In early January, Samsung's Jay Lee made his public debut in flashy global style. Lee, the Harvard-educated son of Samsung's chairman Lee Kun Hee, showed up at the Consumer Electronics Show in Las Vegas to work the crowd. Relaxed and confident in hip wireless glasses, Lee, 38, chatted up participants--including Rupert Murdoch--in fluent English, showing none of his father's stiffness.

A few weeks later, Lee was named Samsung's chief customer officer--a first step, observers say, toward taking the helm. The move highlighted a paradox at the heart of South Korea's booming business culture. Its conglomerates are vigorously modernizing, adopting cutting-edge practices and spreading operations around the world; Samsung, for example, now earns 90 percent of its $57 billion in annual sales overseas. Yet the very leaders, like Lee, who are speeding the process forward are taking power in the most traditional--some say backward--way: they're getting their jobs from their dads.

Lee's ascension was just the latest example. Hyundai Motor made Chung Eui Sun, son of its chairman, president of its sister company Kia Motors two years ago, and Korean Air and Asiana have made similar moves. Already, the new guard is transforming the way South Korea works. Most of the young princes were educated at U.S. business schools, and they're abandoning their fathers' practices for contemporary Western management styles.

This means no more crony capitalism or nepotism (except, of course, when it comes to their own jobs), and no more risk-taking on personal whims. Instead, the new leaders preach careful calculation and scientific research. In their hands, "Korean companies will move from high risks and returns to moderate [ones]," says Namuh Rhee, head of research at Merrill Lynch in Seoul. "They are much more careful and calculating than their fathers."

Samsung's record highlights how the new approach may be less dramatic but much safer than the old one. Under Lee's father, Samsung spent the '80s and '90s aggressively investing in cutting-edge areas like semiconductors. These investments paid off, making the company a global leader in digital technology and earning profits last year of $7.5 billion. ...