Thoughts on Korean Business by Don Southerton

Globalization and the Virtual World 1 AM Several times a week I log onto my computer at 1 AM PST and open my Global Web-based Training Center to teams across the Globe. Soon after I enable the website, participants from the U.K., Belgium, Russia, and Korea log in. (Why 1 AM ? I picked that time, since it is 9 AM in the U.K., 10 AM in Belgium, 12 PM in Russia, and 5P M in Korea.) Over the next 90 minutes, I lecture and lead discussions on topics that might include insights into Korean workplace norms and protocols, trends in Asian business, or the ever-increasing role of Korean conglomerates in global markets. A recurring thought...… About mid-point in my presentation, a thought always surfaces...…"that from my office in San Diego, California, I work with teams that stretch around the world." These teams represent diverse cultures, nationalities, ethnicities, and workplaces. Thomas Friedman in his book The World is Flat argues that technology has changed how we conduct busines...

One of my clients recently was scheduled to travel to Asia. My reaction was " I hope it's not the first week of October " With the Chusok holiday nearing, travel in East Asia is greatly impacted. Also the Chinese celebrate the holiday, adding to demands of regional travel. Please Note: In Korea, Saturday Sept. 30 and Tuesday Oct. 3 are the busiest days for outgoing passengers, and Sunday Oct. 8 is the busiest for incoming travelers. For Overseas travelers to Korea, double check your time and day changes....to avoid these heavy travel days. Korean media sources cite... During the coming Chusok, or Korean Thanksgiving holiday, more and more South Koreans are heading overseas. Some could stretch their holidays to nine days leave if Kaechonjol, or National Foundation Day, and some annual vacation days are also taken. The national airlines said yesterday that about 57,000 passengers will go abroad on Oct. 3. Some 51,000 on the following day, 40,000 on Oct. 5 and 27,000 on...

Upmarket trends in South Korea reflect an ever growing affluent Middle Class. Imports have made their mark in recent years eroding Korea's domestic car makers up scale market dominance. Hyundai-Kia has noted this trend. Chosun Ilbo notes... The Hyundai [Kia] Automotive Group is on the warpath against Toyota, Ford, Chrysler and Peugeot. Hyundai plans to develop new models and allow consumers to test-drive both them and competing imported models to respond to a sharp increase in sales of import cars in Korea. Hyundai has invited 63 consumers, 30 of them members of a car fanatic club, to its Namyang Research Center on Friday so they can test-drive Hyundais and their competitors. It is the first such event held by a Korean automaker. The emphasis is on larger sedans equipped with engines exceeding 3,000 cc. The new Grandeur [Azera in the U.S. SEE PHOTO] TG 3.8 is to compete with Toyota's Lexus ES350, Ford's Five Hundred and Chrysler's 300C. The Grandeur TG is said to be th...

South Korea has made a huge stride with the IMF. I've been watching recent efforts to boost Korea global status. Significantly... The International Monetary Fund (IMF) announced Monday that it has almost doubled Korea’s stake in the influential fund, increasing Korea’s global influence. The IMF, an organization of 184 countries, works to foster global monetary cooperation, financial stability, international trade, high employment, sustainable economic growth, and to reduce poverty. The IMF announced Monday night that its member states approved the quota of four under-represented countries: Korea, China, Mexico and Turkey. Korea’s stake rose to 1.35 percent from 0.76 percent. Of the member countries, 156 voted for raising the quotas, a 90.6 percent approval rate. When Korea joined the IMF in the 1955, its voting shares were a mere 0.14 percent. In spite of rapid economic growth, Korea’s quota increased little. Korea’s 0.76 percent stake in the IMF was far short of its position in th...

In a couple weeks Korean business will shutdown for Chusok, the traditional Fall Lunar holiday. (I’ll give details on the holiday’s significance and appropriate Korean greetings in a future update). In the meantime…since the holiday is based on the Asian Lunar calendar Chusok falls on different day each year. This year Asia will celebrate the holiday officially Oct. 4-7. In Korea, a second holiday, National Foundation Day, will be celebrated on Tuesday Oct. 3. For many Koreans, an extended vacation will stretch up to nine days starting Sept. 30—workers taking Monday and Wednesday off also. Among large companies, Samsung Electronics, the country’s largest electronics maker, said that the company would take five days off during the long Chusok holiday. LG Electronics, Korea’s second-largest electronics company, is doing the same as its competitor. Hyundai-Kia According the Korean media, Hyundai Motor said it has not yet decided on Chusok vacation time for its staff. One reason cited wa...

A striking characteristic of Korean big business is the family management model. In-fighting for control among family members is often an issue. Hyosung is one of the few conglomerates in Korea without reports of feuds over management rights among family members. This Korea Times points out the dynamics of family ownership and management... Following Hyosung Corp.'s multi-billion dollar contract with Goodyear Tire and Rubber Company, the sons of the Korean conglomerate chairman Cho Suck-rai are emerging into the limelight for this achievement. Of the three sons _ the eldest Hyun-jun, the second Hyun-moon and the youngest Hyun-sang _ it is the youngest, the senior vice president of Hyosung, who has recently hogged the spotlight. Under the accord between the world's third-largest tire company Goodyear and the world's biggest tire cord maker Hyosung, the Korean conglomerate is to supply tire cords worth $3.2 billion to Goodyear for about 10 years. Tire cord is made out of pol...

The Hyundai-Kia Auto Group is a highly integrated car maker--much more than many westerners realize. In addition to Hyundai and Kia Motors, the Group operates over 25 related divisions that range from logistics (GLOVIS)) to parts manufacturing and distribution (MOBIS). Long a goal of the Chairman, Chung Mong Koo, has been steel production. That will soon be a reality. Hyundai Steel commences private port operation in Dangjin DANGJIN, South Korea, Sept. 8 (Yonhap) -- Hyundai Steel Co., South Korea's second-largest steelmaker, on Friday began operation of a private port in the western coastal city of Dangjin to ship products to and from its factory nearby, the company said. Hyundai Steel invested $66.4 million in the construction of the 280-meter-long port in the town 123 kilometers southwest of Seoul. It plans to expand the port's width to 1,240 meters by the end of 2008, the company said.. The company port in Dangjin will also be of use in the construction of Hyundai Steel'...

Wealth transfer among Korea's elite business families provokes a strong media and public response. Recent accusations against the Lee (Samsung) family and Chung (Hyundai-Kia) has drawn much attention in Korea. I've noted before that Korean taxes on wealth transfer are massive....much more than in America. This article notes efforts by the family controlling Shinsegae to address the transfer taxes. Shinsegae, along with operating retail stores, own the Westin Choson in downtown Seoul and has the master franchise for Starbucks in Korea. Korea media notes... Shinsegae Co., operator of the country's largest discount store chain, recently saw a shareholder shake-up. Chung Jae-eun, the honorary chairman of Shinsegae announced that he would transfer his entire 7.82 percent stake to his children, including Chung Yong-jin, company vice president, pushing his total shares to 9.32 percent with the additional 4.5 percent stake. The honorary chairman's transfer is worth $700 mi...

Labor Day Update: A Commentary on Globalization Its September 2006 and Labor Day weekend, so an update is timely. I see Globalization as a key and far-reaching issue. One example of Globalization’s reach is the impact of a strong Won and weak Dollar on budgets for U.S. affiliates of Korean-based firms. I would like to provide insights into some recent trends. But firstÂ… In Bridging CultureÂ’s December 31, 2005 New Year’s commentary, I noted trends for the upcoming year. At the time I wrote the year-end commentary I was reading Thomas L. Friedmans The World is Flat: A Brief History of the Twenty-first Century. The author notes that we have become 24/7/365--the process driven by mobile phones, Blackberry, Instant Messaging,…and Goggle. One of my goals for 2006 was to further embrace not only new technology but also the mindset whereby I worked in a 24/7/365 global business market. ItÂ’s Fall 2006, and my world has become 24/7/365. This has been helped along by new global clients wit...

I'm often quizzed by Americans on what gift might be appropriate to give visiting Korean executives and teams. Gift giving is appreciated and a norm in Korean business. Nevertheless, many well-wishing westerners have a poor understanding of Modern Korea. In fact, when discussing gifts, I often suggest that giving visiting Koreans Burberry or Gucci ties is not really appropriate. Yes, Koreans would enjoy the gift, but Korean stores have for years carried a wide and diverse collection of global fashion. This article gives a snapshot of the wide variety of luxury brands available in Korea. The article also highlights the "status" dimension of Korean society. Vuitton or Gucci: Which Brand Is Korea's Favorite? According to the Lotte Department Store duty-free shop, Louis Vuitton was KoreansÂ? favorite luxury brand in July. It was followed by SK-2, Channel, Estee Lauder, Lancome, Christian Dior, Gucci, Sisley, Burberry, Etro, Shiseido, Cartier, Ferragamo, Guerlain, Cl...

Globalization has far reaching impact on the Korean workplace. For one, Korean overseas teams are required to have English language skills since English is the global business language for most Korean companies. This has led to college students focusing considerable time and effort to polish their conversation skills. I'm actually quite impressed by the English language skills of most Korean college students. This article points out the rigid requirements for job applicants at Samsung, (but most of Korea's top firms have similar policies). The last two paragraph point out other rigid norms for hiring eligibility. Han Gook Ilbo Speaking fair English will be an essential requirement for jobseekers wanting to land a place at the Samsung Group which will be recruiting 4,500 university graduates up to December. Samsung said yesterday that it will disqualify job applicants who do not pass an English interview regardless of their academic performance and TOEIC test scores. It is the...