A generation gap is likely to have fueled the current family conflict at Lotte Group. According to industry insiders, while founder Shin Kyuk-ho has a very conservative business approach, his younger son Shin Dong-bin has a more aggressive and progressive management style.

Given their different approaches, the final winner of the conflict and its outcome may eventually shape the future of Lotte as a corporation.

The elder Shin, who set up Lotte Group in Japan, has largely adhered to the “conservative Japanese-style business management.” He micromanages every aspect of the business, valuing practicality, and sets the price of every product -- even a pack of gum.

He also prefers investing in physical assets rather than the stock market. He is known in the industry as “the man with 6 million pyeong,” as he owns an equivalent area (19 million square meters) of land across Tokyo, Seoul and Busan.

On the other hand, his son completed an MBA course at Columbia University and began his career at Nomura Securities in 1981. During that time, Nomura had been spearheading the purchase of foreign stocks and bonds, and Dong-bin got a grounding in business management through global market investments.

The generation gap became evident when Lotte Shopping went public in 2006. Dong-bin had a tough time convincing his father to issue an IPO -- as Kyuk-ho did not wish to “sell” the company.

The company ultimately went public in both Seoul and London, gaining 3.5 trillion won in investment funds and used the proceeds to acquire multiple companies. This year, Lotte Shopping invested 7.5 trillion won to acquire KT Rental as well as shopping mall complexes in Russia and Indonesia.

The Lotte business philosophy appears to be dependent on which of the family members gains the most support, as the three heads of Lotte have an almost equal stake in the group. According to Forbes, Shin Dong-bin has around $1.5 billion in assets, and his brother Shin Dong-joo -- who is favored by Shin Kyuk-ho -- has $1.3 billion.

Regardless of the outcome, both sides will get hurt in the family feud, as will Lotte’s brand image. Between July 17 -- when Dong-bin became president of Lotte Holdings of Japan -- and Aug. 4, the market valuation of eight Lotte Group subsidiaries decreased by a total of 1.45 trillion won.

By The Korea Herald Superrich Team (sangyj@heraldcorp.com)

Kwon Nam-keun, Hong Seung-wan, Sung Yeon-jin, Bae Ji-sook, Yoon Hyun-jong, Min Sang-seek, Kim Hyun-il, Sang Youn-joo