Cultural Business
Considerations for South Korea
Business
cards
The
businessperson should always
have business cards ready for
exchange.
It is recommended that
foreigners obtain bilingual
business cards with Korean on
one side and English on the
other side.
There are couple things
to keep in mind when
exchanging business cards.
First, present your
business card (Korean side
facing up) with both hands
before asking for theirs.
Second, handle business
cards (pass/receive) only with
right hands.
After receiving a card,
slowly nod your head to show
your respect and thanks.
Once you receive it,
try not to stare too hard at
those business cards as it
will comes across as impolite
and or possibly offend the
Korean businessmen.
Addressing
Korean businessmen
In
Korea, last name comes before
first name.
For example, Eric
Robinson is Robinson Eric.
Almost all (if not all)
Koreans have three parts to
their name: last name and two
first names.
In business
negotiations, use their formal
titles and their full name.
This will accomplish
two things.
First, it will
distinguish the Mr. Kim from
the other Mr. Kim.
Second, it shows
respect for the person who you
are addressing.
No
cold calls
Introductions
are crucial as Koreans prefer
to do business with those who
they have formed a personal
connections (such as alumni
contacts).
Personal connections
are the preferred and primary
means of networking in Korea.
Thus, US businessperson
may want to invest some time
in developing and fostering
personal relationships.
Mix
business with private/social
life
There
is no line separating private
life from public life (aka
workplace) in Korea.
Rather, Koreans tend to
base their business
relationship on personal
relationships.
After work, businessmen
kick back, drown share soju
(Korean beer) and go to
no-ray-bang (aka karaoke,
where a group of businessmen
sing along).
Developing
this personal relationship is
important for three reasons.
First, Koreans by
nature do not openly share
information unless they share
close personal relationships.
Many prefer to share
information on informal
occasions, such as one-to-one
discussion with the superior,
dinner parties, and others.
Second, loyalty in
Korea is based on individual
relationships rather than
group relationships (for
example, loyalty to a specific
supervisor than to a company).
This individual based
loyalty fosters subservience (aka
deference) to superiors.
Third, common
geographical or school ties
play an important role in
management.
Koreans prefer to staff
management based on personal
relationships (friends from
hometown or school).
This personal
relationship fosters common
identities, background, and
sense of belonging within the
company.
Group
Thinking
Koreans
tend to think in “group
terms” than “individual
terms” for two reasons:
Confucianism and patriotism.
Therefore, it may be
helpful to argue group
benefits to close a deal.
K-Type
Management
Korean
management system (aka k-type
management) consists of top
down decision-making,
paternalistic leadership, clan
management, personal loyalty,
compensation based on
seniority and merit ranking,
high mobility of workers.
The organization
structure of companies are
highly centralized and
formalized with authority
concentrated in senior levels.
Major decisions go
through a formal procedure of
approval from top levels of
management.
Management
Style
Corporate
leaders tend to incorporate
structures and concept of
family in their management
styles.
That is, in the
traditional family, the father
is the unquestioned authority
with almost absolute power.
The father bears the
full responsibility for the
family (welfare, future, etc).
Similarly, business
leaders employ strong
authoritarian style—a top
down decision-making style.
Most authority are
wielded to the upper
management level with middle
or lower levels having very
limited authority, if any.
Also,
the corporate leaders
incorporate inhwa (aka
harmony) in their management
style.
That is the tendency to
pursue harmony between
unequals in rank, power, and
prestige.
The managers value good
interpersonal relationships
with their subordinates and
try to keep the needs and
feelings of the subordinates
in mind usually by consulting
the subordinates in the
decision making process.
Negotiations
Korean
firms tend to be more
hierarchical--the senior
management takes an active
role in negotiations and
negotiating decisions are made
at the top.
This hierarchy tends to
elongate the negotiation
process.
Negotiators
Korean
negotiators aggressively
strive to carve out the better
deal (including future market
share and growth).
In other words, it is
not possible to achieve a good
deal for both sides.
Rather, one side will
obtain a better deal at the
expense of the other.
Notion
of Contract
In
Korean, a contract is fluid,
rather it is a loosely
constructed consensus that
broadly defines rather than
limits what has been
negotiated.
Also, a contract
represents an agreement at a
specific time under specific
conditions—subject to
changes and flexible enough to
account for constantly
changing future.
In short, Koreans tend
to value the spirit of the
contract as opposed to the
actual contract and the
structure of the agreement.
Therefore, Koreans may
request further concessions or
modifications after signing a
contract.
Japan
Decades
after Japan attempted to make
Korea a virtual colony of
Japan, things Japanese is
still a sensitive issue to
many Koreans (especially older
generations).
On one hand, they
respect and admire things
Japanese.
Yet on the other, they
detest things Japanese.
To be on the safe side,
refrain from making any
comparisons to or with Japan.
Date Updated: March 27, 2007
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