Thoughts on Korean Business by Don Southerton

Good Morning from Seoul, As you might guess, I’m writing this Korean Culture update from a Starbucks in Downtown Seoul. In fact, I’m at the headquarters of Starbucks Korea in part of the city Anglos once resided a century ago. Although much of this trip is business-focused, I enjoy retracing the steps Americans first traveled in Seoul during the 1880s and 1890s. Soon after the first Anglos arrived in Korea they heralded the introduction of western technology and commerce. Perhaps, it’s only right I compose this memo at a Starbucks…linked to the Internet and with my mobile phone handy. BTW While I’m in Korea, my 1-310-866-3777 cell number works as if I was in California, Michigan, or Alabama… telecommunication technology is amazing. As I look out the coffee shop’s street side window, a stream of Hyundai and Kia’s flow by with an occasional GM Daewoo, Ssangyong, or Renault Samsung mixed in. Oh, there goes an Audi—BTW Audi is pressing to be among the top imports to Korea along with Lexu...

One major concern for U.S. firms linked to a Korean based company is the strong Won- weak Dollar issue. It's eroding the profitability of most of the major Korean conglomerates with huge overseas operations--Samsung, LG, and Hyundai-Kia. One group who's work I trust in reporting on the Korean economy is the Korea Development Institute (KDI). I respect the experts at the KDI and value their insights. (In fact, I've met a number of the economists and academics from the institute. ) SEOUL, May 24 (Yonhap) - The South Korean Won's recent gain against the U.S. Dollar has been mainly driven by sound economic fundamentals in the economy, a state-run think tank said Wednesday. Despite brewing concern that the local currency's gain may dent the trade balance, its impact on overseas demand may not be stronger than in previous times, the Korea Development Institute (KDI) said. "The currency rate (dollar-won rate) fell comparatively fast, reflecting the speed of econo...

Everything Korean: Insights into Global Korean Business Don Southerton, President and CEO of Bridging Culture, has launched a weekly Podcast that focuses on Korean global business. The Podcast will provide insights into Asia, Korea, Korean business practices, and Korea'’s global conglomerates Vista, California (PRWEB) May 23, 2006 -- Don Southerton, President and CEO of Bridging Culture, has launched a weekly Podcast that focuses on Korean global business. The Podcast will provide insights into Asia, Korea, Korean business practices, and Korea'’s global conglomerates. To access the weekly Podcast visit: http://bridgingculture.com/Site/Podcast/Podcast.html Southerton notes, I'm excited to launch the weekly Podcast. It's a fantastic venue for reaching out to a global audience interested in Korean business. Future editions of Everything Korean will highlight the rise and successes of Korean global business while providing timely insights into South Korean global conglomera...

May 22, 1882 Treaty of Amity and Commerce There shall be perpetual peace and friendship between the President of the United States and the King of Chosen and the citizens and subjects of their respective Governments. If other Powers deal unjustly or oppressively with either Government, the other will exert their good offices, on being informed of the case, to bring about an amicable arrangement, thus showing their friendly feelings. Article I, Treaty of Amity and Commerce, 1882 Since the late 1870s, America was aggressively expanding its overseas markets, partly in response to periods of domestic economic downturns. One strategy for American manufacturers and entrepreneurs was to seek out new markets for their goods so that their businesses were not based solely on the peaks and valleys in the U.S. economy--often driven by the period's self-serving bankers and financiers. This need to open new markets for American commerce led to pro-business government-led endeavors, which incl...

I'm often quizzed on stressful working conditions in the Korean corporate workplace--long hours often cited as taxing. I respond that "change" is taking place in Korea. Authoritarian management style is yielding to softer tactics. This Korea Times article highlights changing norms in Korea. Soft Management Organizing documents, handling business calls and preparing sharp presentations for bosses and clients before a deadline can stress any employee engaged in office work from nine to five. After-hours, people find themselves tired in mind and body, and search for an escape from their working reality. But in the end, they end up back on the sofa at home watching the nightly news on TV before dozing off awaiting other tasks at work. [sounds like America]. This is where corporate executives and managers come in to save their employees from burning out by supervising and caring for them in a different and creative way. Corporate Korea today is adopting a so-called soft ma...

I look often at the Korean job market...especially for new graduates. My own observations confirm this survey in Chosun Ilbo. Korean students stay in college for an average of six years due to the difficulty of landing jobs. Analysis by online job portal Incruit of some 230,000 resumes shows college graduates in 2005 attended school an average of five years and 11 months. That is seven months longer than those who graduated in 1997. Incruit officials say students close to graduation prefer to stay in school due to Korea's stagnant job market. Figures by the National Statistical Office show the youth unemployment rate reached 8 percent in April.

South Korean corporate executives affiliated with the top 10 chaebol received $382,000 in average annual pay last year. In contrast, non-executive workers averaged about $37,000. According to corporate disclosures reported to the Financial Supervisory Service (FSS), the top 10 chaebol companies paid out a combined $195 million to a total of 509 executives, outside directors and auditors in 2005. Samsung topped the list with its executives collecting about $813, 000, with LG, whose executives received $400,000, second. Hyundai Automotive Group executives averaged about $284,000. Korean compensation is often a base wage plus bonuses.

Of recent, wealth transfer issues have surfaced in Korea. Most of the families connected with top Korean conglomerates are under attack for their tactics to transfer family ownership from one generation to the next. Shinsegae is addressing the issue boldly. Korean media notes... Shinsegae Group, Korea's leading department store and retail outlet operator, said it is willing to pay 1 trillion won [$1 billion] in gift and inheritance taxes. The announcement came as Shinsegae is expected to eventually transfer the group's management control to heir-apparent Chung Yong-jin, vice-chairman of the nation’s largest discount store chain. As I noted... Most of Korea's family-controlled chaebol have been accused of illegally transferring wealth and management control to group owners'’ offspring evading the appropriate taxes. The large shareholders are preparing for an exemplary transfer of management control. Shinsegae is ready to pay a surprising amount of tax said Shinsegae CEO ...

The price of gasoline continues to rise no only in America. $3.00 per gallon is no longer unusual. In Korea, gasoline prices are also hitting new highs. Current prices are hitting $6.10 per gallon. Gasoline prices hit record high in S. Korea SEOUL, May 12 (Yonhap) -- The price of gasoline sold in South Korea reached a record high, reflecting the continued rise in crude oil prices, the country's commerce ministry said Friday. The average consumer price for gasoline was 1,544.4 won (US$1.65) per liter this week, up 1.1 won from the previous week, according to the Ministry of Commerce, Industry and Energy.

In South Korea a brand new service mixing WiBro and terrestrial digital multimedia broadcasting will soon be launched to help usher in the era of convergence between telecom and broadcasting. The new service will be jointly provided by the country's No. 1 broadband operator KT Corp. and largest broadcaster KBS. DMB Terrestrial DMB, Korea's mobile TV standard, allows users to enjoy real time TV programs through mobile gadgets such as mobile phones or laptops while on the move. The mobile TV technology uses conventional terrestrial transmitters, thus charging no subscription fees. The service was started in Dec. last year and currently offers 28 channel choices. WiBro WiBro service, the 3.5-generation high speed portable internet, is expected to be commercially deployed by KT next month. KT and KBS demonstrated the new service at Yeouido in Seoul yesterday with the attendance of officials from the two companies, related technology companies and media. Customers will be able to en...

A huge concern among Korean college students is finding a job when the graduate. This stress has been exasperated in recent years with it taking months after graduation to find a job. Competition for working at Korea's top Groups like Hyundai-Kia, Samsung, SK, Lotte, and LG only adds to the stress. GOOD NEWS, Korea Times notes... About two thirds of last year's university graduates have landed jobs cites the Korean National Statistical Office (NSO). Of the new university graduates last year, the percentage who had their names on the payroll rose to a record 65 percent from 56.4 percent the previous year, the NSO said. The employment rate is the highest level since the statistical office began compiling youth data in 1990. A total of 268,833 people graduated universities last year and 154,542 secured jobs, it said. In contrast, only 27.7 percent of vocational high school graduates succeeded in finding jobs last year while 67.6 percent pursued learning at colleges or universities...

It's a National Holiday in Korea, so it's a Long Weekend for most Koreans. (except those working here in the states). With Buddha's Birthday coinciding this year with Children's Day, workers actual lose an additional day off... Nevertheless, as the nation celebrates Children's Day, the government and businesses have prepared a wide range of events and festivities across the country. (Not to mention, celebrations at thousands of Buddhist temples.) So, what do families do on the long weekend? They focus on the family and their kids! Where to go? Seoul city government is holding various events at Seoul Plaza, including a painting contest for children and a three-day market where people can buy, sell or exchange their belongings or crafted products. The festival will continue until Sunday and coincides with Seoul city's annual event, "Hi Seoul Festival." The Festival is a massive city-wide festival. The Ministry of Information and Communication will also ...

I've often noted that Korea is "wired." High Internet use is a hallmark of contemporary Korean society. This survey notes the impact of the Internet in Korea About one third of South Koreans or 34 percent consider the Internet as their primary source of news, according to an international poll. The figure is considerably higher than the 9 percent world average and the second-ranked U.S., where 14 percent choose to go online first. Using interviews conducted between March 10 and April 4, the BBC/Reuters/Media Center polled 10,230 people in 10 countries to survey issues of trust in and of the media. The poll results were announced in London on Wednesday. Among countries polled were the United Kingdom, the United States, Egypt, Germany, India, Indonesia, Nigeria and South Korea.

I thought you might be interested in two Korean holidays. Of all the holidays and celebrations in Korea, none is perhaps more colorful and festive than Buddha's Birthday, which falls on May 5th this year. Many Koreans, even non-Buddhists, visit temples to observe the celebration and its elaborate decorations. This year, the Buddha’s 2,550th birthday also overlaps with Children’s Day. Children's Day and Buddha's Birthday are celebrated as National Holidays. On Children's Day, parents and grandparents dress up the little ones and take them to children’s parks, amusement parks, zoos, or to the movie for a full day of fun and games. DS

During the 1960s, 70s, 80s, 90s and into the new millennium, the Hyundai Group was Korea's dominant family owned conglomerate. With the death of its founder Chung Ju Yung in 2001, the Group split between the founder's sons. Part of the original group were spun-off--some sold, others merged, and some consolidated. With the death of son Chung Mong Hun, several years ago, a power struggle for control of the Hyundai Group began to surface. This struggle has taken recently escalated... For example... Hyundai Group has openly demanded that Hyundai Heavy Industries sell its shares in Hyundai Merchant Marine Co., describing the shipbuilding giant's purchase of a controlling stake in the shipper last week as a clear hostile takeover attempt. We feel terrible that a hostile takeover attempt has been made while a consanguinity, Hyundai Automotive Group is in trouble,said Jeon In-baek, head of Hyundai Group's corporate planning division, in a news conference yesterday. Hyundai H...