Korean Management: Global Strategy and Cultural Transformation
Chung, K. H., Lee, H. C. & Jung, K. H. (1997). Korean Management: Global Strategy and Cultural Transformation, Walter de Gruyter, New York.
Korea has made spectacular economic growth in the past three decades. It grew at an average rate of about 9 percentage per year for the last three decades. Recently, however, Korea’s economic competitiveness in the world market has been eroded. It ranked highest in the world in international competitiveness in the 1980s, but it is ranked thirty-first among industrial nations in 1997. The low cost advantage that has been Korea’s strategic weapon in the past has been disappeared. Korean workers’ wage have increased more than 500 percent between 1985 and 1995, making it the second highest in Asia. On the other hand, Korea’s attempt to transform itself to high-tech/high value-added industry through the importation of foreign technology has been denied by many industrialized countries. As a result, according to Porter’s (1985) terminology, Korea is facing the possibility that it may be “stuck in the middle”. Based on this situational understanding, three eminent Korean scholars teamed up in this book to analyze the past, the present and the future of Korean economy and management systems.
Recently, several books that analyze economic development of Korean business have been published (Amsden 1989; Chang and CHang 1994; Kang 1996; Ungson, Steers and Park 1997). Compared to the other books, this book has a couple of unique aspects. First, this book provides a well-balanced analysis of both strategic and managerial aspects of Korean companies. The emphasis on strategic aspects results in future-oriented analysis of Korean companies. Based on the analysis of the past success factors of Korean Firms and the assessment of present situation, the authors highlight strategic options of Korean firms for the coming years. Contributing factors to Korea’s past economic development are nicely identified under two categories: contextual factors (external conditions) and design (internal) factors. In assessing changes in both external and internal conditions, the authors highlight the inevitability of structural changes of Korean companies. Globalization and technological transformation are suggested as the key strategic directions for the future change. The authors also examine the current restructuring process of major Korean companies, evaluate the transformation efforts, and suggest future challenges for successful transformation.
Second, this book provides cultural analysis of Korean business management. The authors identify Confucian values, e.g., the emphasis on harmonious relatiounship between father and son, husband and wife, young and old, and king and his subjects, as key Korean value systems and examine their influence on national culture as well as on corporate culture, management style and human resource management. For example, family values emphasizing paternalim, blood-based succession and gender role differences, emphasis of inhwa (harmony) in company sahoons (company credos), practice of yon-go relations (relation-based behavior), the salad bowl type group conformity (group conformity without strong group consensus), etc. are nicely explained within the framework of Confucian values and within the context of management practice of Korean companies. Recent changes in the Korean value systems are examined as well as its implications to the successful transformation of Korean companies.
Korean companies are currently undergoing major economic difficulties due to the regional economic crisis. The pressure for restructuring comes from the market side as well as from the government side. It seems that restructuring becomes the issue of survival for now. Although the current economic crisis occurred after the publication of this book, it becomes more relevant at this point of time. It already diagnosed the inevitability of transformation of Korean companies and suggested directions and options for the required transformation. We can verify those sugggestions by observing new developments of Korea in coming years. To summarize, this book really helps us to understand the past, the present and, most importantly, the future of Korean economy.
Amsden, Alice H. (1989) Asia’s Next Giant, New York: Oxford University Press.
Chang, Chan Sup & Chang, Nahn Joo (1994) The Korean Management System: Cultural, Political, Economic Foundations, Westport, Connecticut: Quorum Books.
Kang, Myung Hun (1996) The Korean Business Conglomerate: Chaebol Then and Now, Berkely, CA: Institute of East Asian Studies.
Porter, Michael E. (1985) Competitive Advantage: Creating and Sustaining Superior Performance, New York: Free Press.
Ungson, Gerardo R., Steers, Richard M. & Park, Seung-ho (1997) Korean Enterprise: The Quest for Globalization, Boston: Harvard Business School Press.
Department of Marketing
Faculty of Business Administration
National University of Singapore