Thoughts on Korean Business by Don Southerton

Few travelers to Korea would dispute that Korea is highly urban. Nevertheless, I was surprised that 9 out 10 Koreans now live in urban areas. Korea Times According to a report released by the Korean Ministry of Construction and Transportation (MOCT), about 43.9 million out of the Korean population of 48.5 million, or 90.2 percent, were found to live in cities, up from 88.3 percent in 2000 and 81.9 percent in 1990. The remaining 4.6 million, or 9.8 percent, reside in rural areas. The ministry expected that Korea's population to reach its peak at 50 million in 2020 and decline afterwards. The country ranked third in population density in the world with an average of 487 people per square kilometer, after Bangladesh and Taiwan. Persons aged 65 or older accounted for about 9.5 percent of the population, up 0.4 percentage points from a year ago, according to the ministry. The country has a total of 99,646 square kilometers of land of which 64,805 square kilometers, or 65 percent, are c...

I tend to highlight Hyundai-Kia, Samsung and LG when I discuss Korean big business. Number 4 ranked SK is worthy on mention since it, too, has made great strides in global expansion. Korea Times notes: SK Group, one of the big four global business groups in South Korea along with Samsung, Hyundai Automotive and LG, is rapidly enhancing its image both at home and on the world stage. SK mobile phones are becoming a well known brand on the world market while more and more foreigners are becoming acquainted with the company SK, which is gaining international brand value along with Korean counterparts Samsung computers and Hyundai cars. [ and LG cell phones, clothes washer, and dryers.] The annual sales of SK Group were $60 billion last year, or 7.8 percent of the countryÂ’s 2005 gross domestic product (GDP). The figure of $60 billion also corresponds to 27 percent of the national budget. The group expects sales to reach $65 billion this year. Although the SK Group sold off its mobile hand...

Korea's Youth Generation has a growing impact on that nation's buying pattern. One aspect of new consumer trends is that younger Koreans are buying cars. Chosun Ilbo notes... ... a growing segment of the country's driving population has gotten younger, and that translates into some new marketing trends. Home to the world's fifth largest automobile industry, Korea is close to passing the 4 millionth vehicle in terms of annual production volume. Matching more cars on the road, the average age of first-time car buyers in Korea is getting younger. One age bracket, in particular, is in the spotlight. Koreans in their 20s have emerged as a key segment among first-time car buyers. As of June this year, they overtook the 40s age group in terms of overall car sales. Buyers in their 20s made up 22 percent of all new car registrations in June of this year, trailing behind the 30-something bracket, which accounted for 24 percent. Customers in their 40s accounted for just 18 percen...

A characteristic of Korean big business is their top-down management style. More significant is the role of the "Chairman." Most significant decisions are made by these top executive. This includes the Group's direction, operational theme and strategy. In fact, Change within the Group is driven from the top. For example, this Korea Times article notes the strong role LG's Chairman Koo Bon-moo exerts over his Group to move LG from Supplier-focus to Customer-focus. (A Push vs. Pull manufacturing model). Customer satisfaction is the main theme pushed by LG Group Chairman Koo Bon-moo this year. In a meeting with some 40 top executives of the group last Friday, Koo stressed the importance of customer-oriented management, for the seventh time in eight months. I have consistently stressed customer-focused management, but some of our inner management is still done from the suppliers' point of view, Koo said at the group's training center in Ichon, Kyonggi Province....

Globalization shapes most business ventures. For example, manufacturing and production internationally flows to where goods can be produced at the lowest price. Ever increasing costs for labor, raw materials and energy mean that Korean (and for that matter Japanese) competitive advantages have eroded. In fact, because labor costs are considerable less in South East Asia and China than in South Korea many manufacturing jobs have left Korea for cheaper labor markets. So where do Korean firms see their competitive advantage. Speed. The Korean word for this is Balli-Balli, which translates as fast-fast. This term once meant producing low quality goods quickly, at low prices. Today, however, producing quality goods is very important. Nevertheless, many top Korean firms recognize their global competitive advantage and strength is still in moving quickly. Now, this often causes stress for westerners working with Korean teams--with the Western business model of careful meticulous study and p...

Korean concept of Family I am often quizzed by western employees of Korean-owned firms on the long hours Korean team members work. For example, Americans often feel that their families suffer when they work long hours. Erroneously, American reason, if Koreans work long hours, then Family must not matter. Family does matter to Koreans. In fact, it's the pillar of Korean society. I felt this editorial article by Kim Seong-kon, a professor of English at Seoul National University and visiting professor at the University of California, Berkeley, provides deep insights into a Korean view of Family. I suggest that Family to Koreans perhaps is somewhat different than that in the West. Dr. Kim notes... In Korean culture, family occupies a very important place in one's life. Indeed, Koreans are very unique in the sense that every decent family keeps a "jokbo" (book of family history), in which one can find his genealogical roots. Generally speaking, even marriage is regarde...

Korea's major conglomerates have distinct Corporate Cultures. To indoctrinate new employee in the firm's unique Culture is accomplished though intense Bootcamps. These program focus on teamwork and team building. Rally-like events are common. This picture highlights a Samsung new employee orientation bootcamp.

I found this article fascinating... and very true. One thought that surfaced as I read the article was its link to status--a deeply rooted aspect of Korean society. Of Starbucks, New York and Doenjang {bean paste] One of the more interesting sociological phenomena of recent weeks [in Korea] is the birth of the so-called "doenjangnyeo," a more-than-slightly derogatory term that literally translates as "Doenjang Girl" (doenjang refers to the ubiquitous Korean bean paste). What is a "Doenjang Girl," you might ask? Definitions differ, but tell-tale signs include the following: using a lot of high-priced scents and makeup; wearing luxury one-piece dresses and handbags; eating at expensive "family restaurants" like TGI Friday's and posting photos of the food on your homepage; frequent window shopping at major department stores; imitating "New Yorkers," or at least as they appear in "Sex and the City," a favorite "Doenjan...

I think it's interesting Korean car maker Ssangyong (twin dragons) hired an Anglo....but he was head of GM China...and Ssangyong is controlled by Shanghai Auto. Nevertheless, another more Korea car makers now has a Anglo executives... GM Daewoo, Renault Sansung and now Ssangyong... Murtaugh steps into S. Korean strike Vivian Jin 2006-08-15 SSANGYONG Motor Company, controlled by China's Shanghai Automotive Industrial Corp, appointed Philip Murtaugh as its new co-chief executive officer in the midst of a work strike at the South Korean company. Murtaugh, who replaced Jiang Zhiwei, is expected to take a lead role in strengthening the competitiveness of Ssangyong in cooperation with two other co-CEOs, SAIC said yesterday. Murtaugh, a 52-year-old veteran of China's automotive market, was added to SAIC's management team in June as executive vice president responsible for overseas expansion at the nation's second-largest automaker. Murtaugh's appointment to his latest ...

When one travels to Korea, they will quickly find the level of customer service in stores and hotels exceptional. This is but one sign in the shifting economical landscape. This article provides insights into Korea's dramatic shift from its manufacturing-based economy of the 1960s, 1970s, 1980s, and 1990s. SEOUL, Aug. 14 (Yonhap) -- A stronger Won against the [the U.S.] greenback has proven to boost employment in South Korea by expanding hiring in the service sector, a report from the central bank showed Monday. [ The strong Won means it costs more for Korean made goods in the U.S.] The South Korean economy has been transformed into a service-oriented one in the aftermath of the Asian financial crisis, said Chang Dong-koo from the Bank of Korea's Institute for Monetary and Economic Research. Therefore, the positive impact of the stronger Won on the service industry offsets its the negative influence on exports. [ as long as you don't work in electronics (Samsung, LG, e...

Did you know Bridging Culture offers several complimentary services? 1. BC offers a daily information Blog at http://bridgingculturekorea.blogspot.com/ The site highlights issues that impact Korean global business. 2. BC now offers a weekly Podcast called Everything Korean: Insights into Korean Business. See http://www.bridgingculture.com/Site/Podcast/Podcast.html 3. A new service, Bridging Culture Global Web-based Training (BCGT), has Internet accessible cross-cultural training programs available 24/7/ 365. 4. Finally, have a specific question on Korean business, strategic alignment, or cross-cultural issues? A work-related concerns? A situation regarding a Korean client or colleague? BC can help. Just contact us via email at dsoutherton@bridgingculture.com and we will promptly reply with our thoughts on a course of action. For urgent inquiries, call 310-866-3777. Don not let cross-cultural issues reduce productivity and create impasses. More importantly, challenges at w...

America "Royalty" tends to be sports and Hollywood celebrities. The antics of Hollywoods "A" list can at times dominate American media. Koreans tends to watch the families of Korean top conglomerates. For decades the Lee family ( Samsung) and the Chung family (Hyundai) have attracted much attention. In fact, the Samsung and Hyundai founders were the subject semi-fictional movie. This article highlights the popularity of Korean's elite families... News reports on the recent announcement of the intended marriage of television personality Noh Hyun-jong to Chung Dae-sun, a grandson of the late Hyundai Group founder Chung Ju-yung, have become the talk of the town. Prominent among those who court personalities, beauty queens and stars are the children of Hyundai and Samsung, two of the major growth engines of the economy over the past few decades. The marriage patterns of the two chaebol, however, look as varied as the number of their affiliates. Some smack of ``s...

I just posted a new Everything Korean Podcast. The Podcast focuses on Korean perception of the West. To join the Podcast just go to http://www.bridgingculture.com/Site/Podcast/Podcast.html Questions, comments?

Bridging Culture's Don Southerton recent presentation to Hyundai MOBIS global team is highlighted the firm's Summer 2006 Newsletter. The article notes BC CEO Southerton's insights into success global cross-cultural management.

I just spent last week in Alabama and witnessed Hyundai's American manufacturing plant in action. This article comes as no surprise... Korea's media notes that Hyundai Motor's Overseas Production Tops 30 Percent Hyundai Motor saw its overseas production percentage for the first half of this year surpass 30 percent for the first time. This is still far lower than that of Toyota, Honda or General Motors who rely on overseas production facilities for some 50 percent of their production but the percentage is likely to increase in the future due to labor disputes here which have become an annual ritual. The Korea Automobile Manufacturers Association announced Friday Four Hyundai overseas plants in the U.S., China, India and Turkey produced 407,812 units in the first half of this year, a 76.1 percent increase over the same period last year. As a result, HyundaiÂ’s overseas production percentage rose from 27.3 percent last year to 32.4 percent this year. Operating overseas plants...

I wear many hats. One of my long time interests in Korean history. My second book centered on the first Americans in Korea. This article interested me greatly, since it talks about Homer Hulbert, one of the first Anglos in Korea. A memorial service was held Friday for Homer Bezaleel Hulbert, an American missionary and scholar who helped the Choson KingdomÂ’s efforts to regain sovereignty from Japan. About 200 people memorialized the 57th anniversary of his death at Seoul ForeignersÂ’ Cemetery in western Seoul. Born in Vermont, the U.S., in 1863, Hulbert came to Korea in 1886 to teach English to King Kojong, ChosonÂ’s second-to-last king, in the royal English school. He also gave counsel to the king about education and foreign affairs as he gained knowledge about Korean culture and history. As Japan tried to claim Choson in the early 1900s, Hulbert helped KoreaÂ’s efforts to prevent the takeover. King Kojong entrusted him with special messages pleading for foreign assistance against Jap...

Korea Times notes that the Korean vacation season is full swing.. July 29 to Aug. 4 is the peak time for the summer holidays. According to research by the Korea Transport Institute, out of 3,964 families nationwide, 51.4 percent vacationing now. Of the summer months from about June to August, why do people choose this specific time to get away from work? It goes without saying that the hot weather is a major factor. However, there is another big reason. Many manufacturing industries slow or in come cases close down completely down during this period. The manufacturing business is so structured that for business to be streamlined such companies have to take vacation at the same to coordinate the assembly procedure. I always go on vacation during the first week of August because of the assembly line, said Chun Ji-hye, an administrative worker for a Hyundai-Kia Motor subcontractor in Kwangju. She has worked for the company for three years and this year has been on holiday since Monday. B...