[THE INVESTOR] LG Electronics said on July 3 that it has simplified titles among its workers to break the previous hierarchical structure and to urge employees to become more creative.

The South Korean tech giant said it has streamlined the five-level ranking system to three in a bid to help workers better communicate with each other. Starting July 3, the workers were given one of three titles, namely professional, specialist and associate.

Complicated ranking systems closely linked to deep-rooted hierarchical culture have been cited as one of the major hurdles for South Korean companies‘ business competitiveness, as they cause lower-ranking employees to remain silent on various issues so as not to conflict with more senior employees.

Accordingly, South Korean companies have been seeking to simplify such systems, especially as they become more global, industry watchers said.

Other affiliates of LG Group, South Korea’s fourth largest conglomerate, such as LG Chem and LG Hausys, also adopted the three-level system this month.

“Although we are not yet familiar with the new titles, workers will gradually adjust to the new policy as the corporate systems will also change moving forward,” an LG Electronics official said.

By Alex Lee and newswires (alexlee@heraldcorp.com)