Over my 20 years working with Korean companies, I've repeatedly encountered what I call "the signature paradox." Korean partners are enthusiastic about a collaboration, have invested months building the relationship, and clearly see the mutual benefit. Yet when it comes time to sign even basic documents, NDAs, non-binding MOUs, letters of intent, they hesitate or simply don't sign.
This pattern perplexes Western companies. From their perspective, these preliminary agreements are routine steps that protect everyone and demonstrate good faith. They're often caught off guard when Korean partners who seemed eager suddenly go quiet once paperwork arrives.
I assume it's risk avoidance, though the reluctance isn't about the relationship or the project’s commitment.
Rather, it reflects deeply ingrained attitudes about written agreements. In Korean business culture, signing any document—even one explicitly labeled "non-binding"—creates a sense of obligation and potential exposure that executives prefer to avoid until absolutely necessary. There's an unspoken belief that once something is written and signed, it becomes leverage in future disputes, regardless of what the agreement actually says.
Western legal teams find this especially frustrating. In their framework, unsigned preliminary agreements create MORE risk, not less. The cultural disconnect runs deep: Americans reduce risk through documentation; Koreans often see documentation itself as the risk.
I've watched promising partnerships stall for months over reluctance to sign basic NDAs. I've seen Western executives question whether their Korean counterparts were genuinely serious about the collaboration. Meanwhile, the Korean side doesn't understand why Americans won't simply proceed on the basis of verbal understanding and trust in the relationship.
Even after agreements are signed, getting Korean partners to return the signed copies can take weeks or months. Not to mention, Korean management is very hierarchical; working-level staff who negotiate the terms often lack the authority to sign, and securing approval from senior leadership adds layers of delay.
These issues often need to be formally addressed in quarterly Board of Directors meetings, elevating what Western companies view as routine administrative matters to executive-level agenda items.
The challenge becomes how to continue building the relationship while still pressing for the agreements Western companies need. This requires patience, cultural translation in both directions, and often a staged approach where informal understandings gradually transition to written terms as trust deepens.
Big take-away
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