Korea

We have chosen to compare and contrast U.S. managers with
the managers of The Republic of Korea (ROK). The ROK is a
tiny nation of 42,621,000 people residing precariously on
the southern half of the Korean Peninsula (Cook l995). It
has a very high population density with 1.121 persons/ sq.
mile. They are ethnically homogenous with 99.9% being
Korean and .01% Chinese. The age distribution is 30% under
15 years of age and 4.3% over age 65. They have a life
expectancy of 73 years of age for females and 66 year of
age for male.
 
The primary religions are Confucianism, Mahayana Buddhism,
Ancestor Worship, Shamanism and Ch'ondagyo which account
for 66% of the population with another 28% practicing the
Christian religion.
 
The Han'gul writing system is the official language of
Korea with English being widely taught in many schools. The
government is made up of the executive and legislative
branches. The Head of the State or the Executive President
is elected by direct popular vote for a 5 year term. The
Legislature is comprised of a 299-member National Assembly
which is elected on a 4 year term by universal adult
suffrage.
 
The economy is estimated to produce GDP of US $121,310
million with a per capita income of US $4,045/ year. The
total number of persons active in the economy was
16,900,000 with a 3% unemployment rate and a literacy rate
of over 90% (East 1990).
 
Koreans are a sincere, warm, and friendly people. They make
deep commitments of friendship and loyalty that are
permanent if they are treated fairly and respectfully. By
the same token, if they are mistreated, they make
formidable enemies. A significant percentage of ROK's top
managers are educated in the United States, and speak
fluent English.
 
The Topics we have chosen the compare and contrast are
Leadership, Decision Making and Motivation.
 
Leadership
 
Although managers in Korea and the United States have
similar problems and responsibilities, important cultural
differences dictate how they achieve the goals.
 
Since both cultures have the same goals in business -
profit and success, they display some similarities in their
leadership styles. First and foremost, all managers expect
their employees to behave in a professional manner and
accomplish the tasks assigned to them. Very little
tolerance was noted in either societies for substandard
work product.
 
Additionally, management in either country recognized the
importance of its role in the overall success of the
business. Communication was found to be the decisive factor
to achieving this objective. Surprisingly, Korea has
adopted this U.S. management style of openness with less
resistance than other Asian countries. Korea has typically
been viewed as a country were military traditions have been
pervasive and obedience to authority is deemed absolute.
The fundamental change in philosophy may be explained by
the fact that Korea is a land of division, so the people
are willing to listen and respect another person's point of
view. (Baum 1987). With Korea fast becoming an industrial
power, the idea of communication through listening is
essential to the promotion of post-Confucian work ethic.
 
Several major difference were noted when comparing the
leadership style of Korean and American managers. A major
difference is how managers tend to view the cultural
importance of groups. Americans tend to focus on the
individual, with each person being responsible only for
their own actions. Leadership is conveyed more by example
than by interaction and employees tailor their performance
to their own personal aspirations. Koreans view work
performance as a contribution to the group. This originated
from the fact that most countries in Asia function in basic
group oriented structures. (Doktor 1990). Therefore
leadership is enhanced when instructions are communicated
to the entire work force rather than to one individual.
 
Of equal importance is the way managers are viewed by the
employees in the business. Americans tend to view
 their superiors as the enemy and people to avoid at all
costs. The deference given to them stems more from fear
and/or envy than from basic respect and concern for the
company. Koreans view their managers as important social
leaders. Respect for rank and status within the business
environment is high so the manager's role takes on great
symbolism. (Doktor 1990) The manager is seen as a
representative of the organization and his position holds
great value in creating strong links in the firms
organizational structure. For instructions to be respected,
ritual proprieties and courtesies must be observed.
 
Decision Making
 
Relationships between employer and employee, superior and
subordinate, is more like that between family members
 rather than like master and servant relationship. This
explains why seniority is a big concern when companies
consider who should be promoted. Koreans also view the
father as an authoritarian figure. He must be respected by
all members of the family, and his words must be obeyed.
This philosophy is also reflected by the training programs
in most of Korean companies. Employees are trained to
accept orders, and the company leaves little imagination
for its employees (Janelli 1993). Therefore, South Korean
employees are not involved in the decision making process
since it is reserved for the top management only.
 
Most of the Korean company is based on technical
qualifications, a rigid hierarchical order, codified rules
and regulations. In most of the companies, one of the most
important standards for regular promotion is length of
service. People at the high level are considered as highly
loyal to company, and more competent than other people in
the company. That is why decision making is concentrated in
the upper levels of managerial hierarchies and major
decisions, especially those requiring expenditures, go
through a formal procedure requiring approval from upper
level of management. This formal approval process is
considered more a means of authority and control rather
than consultation and participation.
 
Unlike Japanese, most Koreans will decide in their own
favor when confronted with a choice between the interest of
the group or their own interest, ethics play no part in
them (Chu 1991). Therefore, it is very important for
managers to consider the benefits to the employees when
they make decisions. In order to do this, decision are
always long term oriented. Interestingly enough, this type
of decision making mimics the father taking care of his
children, referring once again to the importance of the
family in Korean culture.
 
In contrast, managers in American firms are highly
influence by the idea that they should maximize shareholder
wealth (Eiteman,1995). Since most of the American companies
are publicly owned, management, especially the CEO, are
closely monitored by the shareholders. Their performance is
based on how much wealth or value they can created for the
shareholders, not how much welfare they can created for
their employees.
 
Managers who under CEO's control certainly have to follow
the same pattern. Unlike Korean company, managers are
chosen predominately by their performance in the company;
seniority is not a big concern. Similar to a Korean
company, important decisions are typically made by high
level managers after some team discussions, Sometime, a
decisions can involve employees such as foremen or
supervisors and can be implemented without the approval of
high level person. Relationships between managers and
employees are not as intensive as in Korean company. In
American companies, managers are more like a working
companion rather than an authoritarian figure.
 
In America, the obligation for managers to take care of his
subordinates is not as strong as in Korea. They sometimes
will sacrifice employees' welfare in order to keep their
jobs. US managers are usually evaluated once every year,
and in order to get a better performance during a short
period of time and get promoted, their decisions are
usually made to achieve a short term objective.
 
Motivation
 
Over the last quarter century, the ROK has achieved what is
widely acclaimed as "the economic miracle on the Han Rive."
Since Korea embarked on economic development in early 1962,
its economy has grown at one of the fastest paces in the
world. As a result, Korea, long known as one of the world's
poorest agrarian societies, has emerged as an upper
middle-income, fast- industrializing country. The key to
this success was the adoption of an outward--looking
development strategy making exports the engine of growth --
a strategy that reflected Korea's insufficient natural
endowments, its limited domestic market and its abundant,
well-educated, industrious manpower.
 
In general, Korean's are motivated by good education which
position themselves well in today's marketplace. From this
point they are motivated by high achievement for which they
are not always rewarded for because of the authoritarian
culture they live in.
 
When comparing motivation in Korea with that in the United
States we found that US employees receive more job-related
information than do their Asian counterparts. Therefore
Korean employees might be somewhat uncertain about how they
are to execute their jobs which may dampen their motivation
to achieve.
 
In the US, contingent-based reward systems tend to be used
with rewards typically being based on merit. Salary level
is predicated on performance and education; incentive pay
on performance; and promotion on performance. In Korea,
however, salary level is based on seniority; incentive pay
is uniform; and promotion is seniority based. Korean
employees have little prospect for long-term rewards or
promotion, irrespective of performance.
 
The US individualistic orientation tends to drive US
employees to aspire to achieve through promotion. This
result is a feeling of success, which can generate
extrinsic rewards and be a source of self satisfaction.
Alternatively, Korea focuses on group harmony and unity and
thus are not as driven for individual promotion.
 
Therefore in conclusion US employees have a higher valence
for personnel growth and development than do Koreans. Both
US and Korean employees are motivated by monetary
compensation (Dubinsky, Kotabe, Lim, Michaels 1994).
 
Hypothetical Scenario To: Mr. Willie Hopkins; Manager of
South Korean Operation From: Human Resource Department; AT&T
 
Engaging in a joint venture in Republic of Korea is a big
leap towards attaining the internationally oriented goals
that our company has sought. There is an urgent need for
technology, manufacturing and marketing skills in South
Korea that can not be fulfilled by the locally. This is the
main reason why we are engaging in a joint venture with
Sumsong Corporation. This manual is designed to inform you
about Korea in general and offers some strategies on how to
deal with various difficulties you may experience. 1.
Learning and Training
 
It is very important for you to know and understand Korean
culture, religious value, politics, geography, and history.
By learning about these, you can improve your adaptability
and flexibility to adopt Korean business ways, behaviors,
and thinking. The knowledge of Korea would help you make a
close relationship with Korean employees. Language training
is also crucial for you to be successful in your long-term
assignment because only a small percentage of Korean
businesspersons and government officials speak English
(Mente 1988). In addition, you should recognize that
technical, managerial, and legal knowledge about your
assignment.
 
The Human Resource Department is here to train you. The
first session is for general and cultural knowledge about
Korea and Korean (Hunglu). This session will commence
months before you assignment begins and utilize written
materials, seminars, video, meetings, and a preliminary
visit to Korea. The second session requires you to learn
about your assignment. This will be also done before you go
to Korea (Alkhafaji 1995).
 
According to a study (Hill 1984), 90% of expatriates'
failure results from their spouse' problems such as,
isolation, loneliness, and boredom. The HR department
highly recommends your spouse and children's participate in
the first session along with continual updates initiated by
you.
 
An executive of Sumsong, who has a strong connection to
Korean government and business world will be introduced to
you as your mentor. You should contact him and grasp actual
Korean government and business situations. To make a close
relationship to the governmental and business people is to
lead your assignment success. 2. Social and governmental
interference
 
Korean culture is highly influenced by the traditional
family relationship, village discipline, and Confucianism.
The traditional family relationship and village discipline
enforce seniority and harmony. A father holds the family's
property and has a absolute power over his family. His wife
and children cannot openly express disobedience, assert
independent rights, or confront the father. A village
leader, usually an eldest person has similar power and
authority. In order to live comfortably, the locals should
keep harmony and cooperate among themselves. Therefore,
thinking as a group is much more important than thinking as
an individual.
 
Confucianism also strongly affects Korean culture. It
emphasizes the need for authority to govern the masses and
advocates the virtue of subordination and endurance of
women to become good wives and mothers. This leads the
Korean culture to display characteristics such as,
authoritarianism, collectivism, and male dominance in the
society.
 
Note that governmental factors may interfere with your
assignment. Hart-Landsberg(1993) mentions that Korean
government regularly targets new areas for development by
encouraging the establishment of domestic firms to replace
imports. These new domestic firms are protected by both
trade restrictions and limits on foreign investment and,
when judged capable, are required to export as well as meet
domestic needs. Therefore, you must pay attention to the
Korean government policy and action relating to the Korean
venture. Also, even though the Korean government changed
from a military government to democratic government, the
military still has strong influence over the government.
Hence you need to consider the present relationship between
the government and the military. 3. Organizational factors
Corporate culture
 
All of your superiors, subordinates, and co-workers are
Korean and the organizational structure is based on that of
Sumsong. Korean businesses generally have an organizational
structure of vertical concentration of decision making at
upper hierarchies and horizontal concentration of
functional control in staff departments. Confucianism has
had a great impact on the organizational culture of Korean
firms. Thus, the cooperate culture is hierarchical,
authoritarian, and harmonious
 
Social status remains a vital factor in personal and
business relationships in Korea. To employ a Korean with a
low
 social status as a manager because of his English language
ability, experience, and other qualifications, and expect
him to effectively manage employees with higher social
pedigrees will result in major problems (Mente 1988).
Management power groups are also formed based on common
geographical and school ties. Informal relations such as
school ties play a strong factor due to feeling of common
identity and belonging. Great emphasis is placed on
graduation dates due to the importance of seniority. Social
interaction and personnel decisions are affected by a
common background and compatibility brought on by being
from the same region.
 
Because management and labor relationships are similar to
that between a father and his sons, Korean employers treat
their employees with enlightened and personal concerns that
keep them loyal and motivated. Companies should bear the
responsibility for establishing and maintaining a
relationship of integrity and
 trust between the managers and employees. You should
develop and maintain the expected relationships by
remembering
 not to break any of the taboos of Korean society while
demonstrating a sincere appreciation for Korean
sensitivity. Communication
 
You should realize that formal etiquette is very
significant. You can see today that traditional bows are
still the official, formal method of greeting and farewell.
There are several different kinds or grades of Korean bows,
each depending on the age, rank, and social position of
individuals involved as well as the situation in which they
are bowing (Mente 1988).
 
The official call in South Korea is another way of showing
social status. It is used at formal affairs especially if
you are visiting the company for the first time. It is
extremely polite and expedient to make appointments well in
advance. As a means of respect, most Korean executives will
stand when a visitors enters their office. It is also
regarded as impolite for lower ranking employees to remain
seated while their superior stands. High-level Korean
executives may not stand up when someone they do not know
arrives unless informed that the visitor outranks them or
is a special guest (Janelli 1993)
 
It is highly recommended to spend some time with the Korean
employees outside their working hours. Generally, South
Koreans do not feel free to communicate openly with their
superiors at work. However, they are willing to express
their minds outside. During these occasions, they voice
their problems and dissatisfactions about their jobs and
relationships. You will have many opportunities to spend
your private times with your Korean employees. Do not
hesitate to participate in the events such as an eating and
drinking party, a nighttime singing session, or a picnic.
Personal relations and contacts are very important for
Korean business. These situations will help you make close
relationships with the employees. Please note that if you
fail to participate in these activities, you will likely
create serious problems because Koreans usually expect your
participation. Employee motivation
 
The evaluations in Korean companies place much emphasis on
contribution to the company, ability of performance, and
personal character and attitudes. The ability aspect
includes job knowledge, creative planning,
 understanding, judgment making, and growth and development
potential. Personal character and attitudes include
seriousness, responsibility, effort to self- development
and improvement, and human relations. Hard work and harmony
among employees is highly valued.
 
It is difficult to promote someone of exceptional ability
and qualifications without senior status. A worker often
leaves his company if a colleague whom he considers less
qualified than himself gets promoted. However, seniority is
more important in lower levels of the organization. The
standards for regular promotion in Korean companies are
length of service, achievement, including awards; training,
foreign language competence, and merit of performance.
Female workers who have the same job classification,
titles, qualifications, and educational levels are still
paid less than male counterparts because of social
influences because Korean society is male-dominated. If you
promote a woman, understand that it may be advisable to
make an informal agreement with the other employees
otherwise the promotion could rupture the morale of the
employees and seriously affect performance.
 
If you promote someone, evaluate the employee's
performance, or give rewards, you have to consider the
factors previously discussed and above all, strive to
maintain harmony among your subordinates. 
 
Reference
 
Alkhafaji, Abbass F. 1995. Competitive global
management:principals & strategies.
 
Baum, Laurie. 1987. "Korea's Newest Export: Management
 
Chu, Chin-Ning. 1991. Asian Mind Game. New York, NY: Rawson
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Cook, Chris. 1995. The Fact on File World Political
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Doktor, Robert H. 1990. "Asian and American CEOs: a
comparative study". Organizational Dynamics (Winter) :
46-56.
 
Dubinsky, Alan, Masaaki Kotabe, Chae Un Lim, Ronald E
Michaels. 1994. "Differences in Motivational Perceptions
among U.S.
 
Japanese and Korean Sales Personnel". Journal of Business
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East, Roger. 1990. World Fact File. New York, NY: Facts on
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Eiteman, David K., Arthur I. Stonehill, Michael H. Moffett.
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Finance. Norwalk, CT: Addison-Wesley Publishing Company.
 
Hart-Landsberg, Martin.1993. The Rush To Development:
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York, NY: Monthly Review Press.
 
Hill, Charles. 1984. "The Pitfalls in Diversity".
 
Janelli, Roger L. 1993. Making Capitalism: The Social and
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Mente, Boye De. 1988. Korean Etiquette & Ethics in
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