Thoughts on Korean Business by Don Southerton

Unions in Korea grew in power with the return to Democracy in the late 1980s. In fact, Union activism was crucial to South Korea's return to democracy. Recent popular opinion toward Korean unions is mixed--some seeing their strikes as harming the Korean economy. Other see that suppliers and vendors suffer when Unions strike. I see consolidating Union memberships is a strategy to bolster unions at a time when their strength is starting to wane. Chosun Ilbo Some 20 trade unions with altogether 110,000 members decided Friday to convert themselves into an industry-wide umbrella group to boost their negotiating power. They include the union at Hyundai Motor, the nationÂ?s largest, Kia Motors and GM Daewoo Motor. The move is expected to strengthen the front of industry unions and force businesses to negotiate with both their in-house union and the industry umbrella. Employers fear this will lend force to excessive labor demands. Some 38 percent of labor disputes last year came from the...

Yesterday an academic colleague quizzed me on “…exactly what I did?” My short answer was “I helped Korea-based global firms communicate better.” My friend asked me to elaborate. I explained that Korea-based business groups like Samsung, LG, Hanjin, and Hyundai-Kia had aggressive global expansion agendas. My work centers on assisting Korean management and their global partners align cross-cultural management. This work includes global training programs, consulting, and supporting executive teams. As scholars tend to probe for insights, my colleague then asked what I thought were “the greatest challenges for Korea-based global firms in 2006.” I noted that distinct, culturally-rooted business norms, management practices, and communication styles often led to trust issues and misunderstandings. I pointed out my three priorities in addressing these issues and concerns. 1. Educate non-Korean host country teams (Americans, Brits, Canadians, etc.) on Korean business norms and company c...

Yesterday an academic colleague quizzed me on “…exactly what I did?” My short answer was “I helped Korea-based global firms communicate better.” My friend asked me to elaborate. I explained that Korea-based business groups like Samsung, LG, and Hyundai-Kia had aggressive global expansion agendas. My work centered on assisting Korean management and their global partners align cross culturally. The work includes training programs, consulting, and support for executive teams. As scholars tend probe for insights, my colleague then asked what I thought were “the greatest challenges for Korea-based global firms in 2006.” I noted that distinct, culturally-rooted business norms, management practices, and communication styles often led to trust issues and misunderstandings. I pointed out my three priorities in addressing these issues and concerns. 1. Educate non-Korean host country teams (Americans, Brits, Canadians, etc.) on Korean business norms and company cultures. For example, I focus con...

Yesterday an academic colleague quizzed me on “…exactly what I did?” My short answer was “I helped Korea-based global firms communicate better.” My friend asked me to elaborate. I explained that Korea-based business groups like Samsung, LG, and Hyundai-Kia had aggressive global expansion agendas. My work centered on assisting Korean management and their global partners align cross culturally. The work includes training programs, consulting, and support for executive teams. As scholars tend probe for insights, my colleague then asked what I thought were “the greatest challenges for Korea-based global firms in 2006.” I noted that distinct, culturally-rooted business norms, management practices, and communication styles often led to trust issues and misunderstandings. I pointed out my three priorities in addressing these issues and concerns. 1. Educate non-Korean host country teams (Americans, Brits, Canadians, etc.) on Korean business norms and company cultures. For example, I focus con...

Daewoo suffered greatly from the IMF Crisis or 1997. Even nearly a decade later parts of the once powerful group are still be acquired. This includes Daewoo Engineering and Construction. Korea Times notes... Kumho Asiana Group was picked as a preferred bidder to take over a controlling stake in Daewoo Engineering & Construction, according to Korea Asset Management Corp. (KAMCO), the largest shareholder of the builder. Kumho will become the nationÂ’s eighth largest conglomerate once the acquisition is completed as planned. Daewoo has been one of the most coveted items in the local mergers and acquisitions (M&A) market this year. With the acquisition, Kumho will rise as not only a top builder. Currently the nation’s 11th largest conglomerate with 12.98 trillion won in assets, Kumho Asiana Group will have the eighth largest assets among domestic conglomerates. Having started business with two taxis back in 1946, Kumho has 23 companies under its wing, ranging from airlines and tire...

Japanese imports to Korea are not unusual. Toyota's luxury brand Lexus is the most popular. Honda, too, hopes to make greater inroads by lauching its luxury Acura line in Korea. Korea Herald Honda Korea launched its premium sedan Legend (marketed as a Acura is the U.S.) on the Korean market yesterday, a move that the automaker hopes will infuse momentum into the relatively sluggish sales of Japanese automobiles here. "Over the past two years, Honda Korea has won 5,500 customers with two best-selling models, CR-V sports-utility vehicle and Accord sedan. The company will expand its customer base and sales network with the introduction of the Legend," Honda Korea head Chung Woo-young said at a news conference held at a hotel in Seoul. Chung said the local unit of the Japanese carmaker will open its fifth dealer shop in Bundang, south of Seoul, in the second half of this year and increase the total to 10 by the end of 2007 as part of efforts to strengthen its sales network a...

To follow up on yesterday's report on employment in Korea, Korea Times notes that concerns over the job market leads the list in a recent survey. Koreans worry most about the tight job market, followed by the widening gap between the rich and poor, a study showed yesterday. Koo Do-wan, a sociology professor of the Catholic University of Korea, conducted the survey on 1,255 Koreans aged 19 or above, between April 17 and May 15, to analyze changes in the values of Koreans. The poll said 88.5 percent of the respondents answered the tight job market is their biggest concern as more and more jobseekers are having difficulty with landing a job due to the prolonged economic slowdown. In the survey, poverty placed second at 88.3 percent, followed by social polarization at 84.5 percent, and real estate policy at 82.7 percent. Also, concerning questions about social anxiety, the respondents worry most about their lives after retirement at 66 percent, followed by unemployment, 65.7 percent; d...

To understand the dynamics of the Korean workplace, understanding the Korean job market is vital. This Chosun Ilbo article reflects the trends of recent years... Korean Grads are always concerned about finding a great job...which this article calls a decent job... The greatest concern for parents of college students is whether their children will find a job when they graduate, but Korea generated only some 50,000 “decent” jobs last year, a Chosun Ilbo study finds. If graduates do not find decent employment, it means they will continue to be financially dependent on their parents, and that could eat into their retirement savings. Every year, universities and colleges turn out some 530,000 graduates, but the number of all jobs the private and public sector create stands at no more than 300,000-400,000 a year, condemning at least 100,000 graduates to unemployment. The number of “decent” jobs created by businesses has remained much the same for several years because firms are reluctan...

Rankings of Korean top conglmorates is highly watched. In Korea, it denotes status and success. The current ranking is soon to change...according to Korea Herald, The bidding for this year's largest offering Daewoo Engineering & Construction Co. ended on Friday, sparking possible changes in the rankings of local business giants. Should the builder with assets worth about $6 billion fall into the hands of Kumho Asiana or Doosan groups, one of the two would - overnight - become the nation's eighth largest conglomerate, with greater leverage in the domestic industry. Daewoo E&C ranks 21st among top private corporations in Korea according to the Fair Trade Commission. If Kumho Asiana Group, one of the strongest bidders and the nation's 11th largest conglomerate acquires the construction company, it would outstrip Doosan Group and leap to the No. 8 spot after Hanjin Group (20.7 trillion won in assets). If luck turns to Doosan Group- it would climb two notches to No. 8.

Perhaps, not to mention the impact of the World Cup in a Korean business blog would be a missed opportunity to highlight an interesting aspect of Korean popular culture. This article cites the impact of the World Cup on the workplace in Korea, but I know Koreans across the globe struggling to juggle their work schedules, sleep, and the competition. This includes Koreans in America, Canada, and of course Europe. Korea Times The World Cup in Germany will keep many South Koreans awake through the night over the next 30 days, and companies are struggling to find ways to keep daytime labor efficiency. Due to a seven-hour time difference, the matches will be played during the nighttime in Korea. As a result, several companies are adopting flexible working hours on the South Korean national team's match days, so workers can come to work in the morning with enough sleep, and more importantly, with a sober face. Dongwha Holdings, which produces wooden, interior materials, decided to advan...

SEOUL) June 8, 2006 -- The Hyundai-Kia Automotive Group ranks as the sixth largest automotive manufacturer in the world, according to the Detroit-based weekly Automotive News. In Automotive News' most recent survey of global automotive sales and production, Hyundai Motor Co. and its subsidiary Kia Motors Corp. registered an 11.6 percent jump in global sales in 2005 to 3,715,096 units. It was the largest percentage gain of any carmaker in the million-plus sales category. With it, Hyundai and Kia climbed one spot in the global rankings. Kia Motors has enjoyed double digit sales gains in Europe, China and Australia while in the more competitive North American market a more modest pace of growth has been registered. The survey results were published in the June 5, 2006 edition of Automotive News and include sales of cars, light trucks, commercial vehicles and buses. Top 10 Automakers Worldwide Ranking Automaker 2005 Global Sales 1 General Motors 8,381,805 2 Toyota M...

Korean cars were once the topic of late night American TV jokes--poor quality often the issue, Things have changed. Hyundai Motor Tops Quality Survey in U.S. Hyundai Motor ranked top for quality on a market researcher’s list of global carmakers. J.D. Power and Associates said Wednesday its quality survey of consumers who purchased new cars made by 37 brands available in the U.S. market between November 2005 and January 2006 placed Hyundai third with 102 points, ahead of Toyota with 106. Honda ranked sixth with 110, Cadillac seventh with 117, Chrysler 10th with 120, Audi 18th with 130, Mercedes Benz 25th with 139 and BMW 27th with 142 . The score is based on consumers’ evaluation of their new vehicles after three months of ownership in 217 categories including comfort, convenience and design. The study reflects problems consumers saw for every 100 cars -- the lower the score, the more consumers are satisfied. Porsche ranked first with 91 and Lexus second with 93. Hyundai affiliate Kia M...

Imports to Korea are few, but stand out in a sea of Hyundai, Kia, and GM Daewoo. More significant, the import are signs of status and cultural capital. Actually, they only recently topped 4.5% of the Korean market. Chosun Ilbo notes... Competition between foreign carmakers to win over local consumers is becoming fiercer, with JapanÂ’s Toyota and Germany's BMW pitted against each other in the battle for the lead in the import car market. Volkswagen, too, is aggressively trying to enlarge its market share. The Korea Automobile Importers and Distributors Association said Monday that Toyota sold 650 cars here to take the biggest market share of 17.77 percent last month, followed by BMW, which sold 492. The Japanese carmakerÂ’s flagship model Lexus ES350 sold 410 units in May, far outpacing its rivalÂ’s hit models BMW 523 (161 units) and BMW 320 (134 units). That propelled Toyota to the top for the entire January-to-May period, with sales of 2,614 units over BMW's 2,570. Volkswag...

Product branding is key to success in business. Global firms look for naming that has broad appeal. Korea Times More and more local companies are changing their corporate identities from Korean to English to appeal to overseas consumers in the age of globalization. Already 28 of the 715 companies listed on the main bourse _ Korea Stock Exchange _ have adopted English names, while 23 of 925 registered companies on the tech-heavy Kosdaq have English titles. Recently, Taepyongyang, Korea's No. 1 cosmetics and health care products manufacturer, announced a make-over of the company's name as the cosmetic giant converted itself into a holding company. After 61 years of carrying the traditional Korean name, the company has adopted a new English name, ``AmorePacific Corporation.'' ``Our goal is to become one of the top ten global cosmetic companies by the year 2015,'' said Shin Min-ho of AmorePacific Corporation. ``We will turn our sights now to global markets such as F...

On my recent trip to Seoul I watched in earnest at the Korean car market. More imports are present, but still domestics dominate the streets and highways. This Arirang article cites the inroads of imports... If you feel that the number of Beetles and Beemers on Korean roads has been rising recently, you are not just imagining it. [ at least for Koreans]. During the past five years, sales of imported cars surged sevenfold in the country. The Korea Automobile Manufacturers Association says the number of foreign cars sold in Korea in 2005 amounts to nearly 40,000, up from the 2000 figure of some 4,400. That's nearly a 48 percent annual increase on average. On the other hand, sales of domestic cars in 2005 amounted to just over 910,000 units, down more than 13 percent from five years prior. The trend continues. In the first quarter of 2006, sales of domestic cars increased nearly 13 percent year-on-year to almost 211,000 units. But that of imported cars surged 68 percent in the same pe...

Chinese business tends to be a hot topic. It has a huge impact on Korea. Korean carmakers Hyundai and Kia have strong and bold interests in China. I thought this article was timely Industry Week June 2, 2006 -- If carmakers in China want to build plants at other locations they must reach 80% of their manufacturing capacity before they will be allowed to build, according to a May 31 statement by the China's Ministry of Commerce. Additionally all new vehicle companies will be required to produce Chinese brand vehicles as well. These requirements, which address both the issues of overcapacity and promoting local brands are in addition to a national auto industry policy that was launched last June. Included in the policy is the requirement that total investment in any new vehicle project located in China must be no less than $250 million with at least $62 million spend on research and development. According to the statement there has been overcapacity in auto production. Currently, 8 m...

Just back from a week in Seoul. Elections and football (soccer) mania dominated popular society. With regard to Korean big business the conviction of Daewoo founder Kim Woo Choong warrants study. Korea Times A Seoul district court Tuesday imposed heavier- than-expected penalties on Kim Woochoong, the disgraced former chairman of disbanded Daewoo Group. Kim said nothing about the verdict, but appeared aggrieved and disappointed, and his defense lawyers vowed to appeal. They’d better not. The sentence _ 10 years in prison plus $22.5 billion in forfeiture _ is more symbolic than substantive for the bedridden and penniless” onetime tycoon. Essentially, this is a case of principle, not individual circumstances. The 70-year-old magnate’s merits and demerits have been discussed for a long time. Kim, a role model of rags-to-riches corporate legend, nurtured a small textile exporter to the nation’s second- largest family-run conglomerate, or chaebol. He thus greatly contributed to economic grow...