A quick summary or a general outlook on international business management of South Korea. The outline is written below: Introduction to South Korea Economic Transition & Business-Industrialization Stage Political Admin, Public Policy, Society & Culture Geopolitics to Geo-economics Emergence of Chaebol Industry Foreign Investment Climate Business Culture & Etiquette

1. Group 2B
Class Presentation
Week 7- CSEB3102

2. Aziza Zaldarriaga Z(CEA100708)- Phillipines
Cian W’O Brien (NEE130235)- Denmark
Chaymae Samir (NEC130215)-Morocco
Dominik Wagner (NEC130217)-Germany
Firmansyah Shidiq W(CEB110723)-Indonesia
Haya Shadab Ali (CEB110702)-India

3. Introduction about South
Korea
Economic Transition &
Business-Industrialization
Stage in South Korea
Political Administration,
Public Policy, Society &
Culture In South Korea
Geopolitics to Geo-
Economics in South Korea
Emergence of Chaebols
Industry in South Korea
Foreign Investment
Climate in South Korea
South Korea Business
Culture & Etiquette

4. • Population: approximately 48
million
• Seoul is ranked 8th in the Global
Cities Index for 2012 and is
considered to be a leading global
city.
• A great number of international
companies are located in Seoul.
• Hosted the 1986 Asian Games,
1988 Summer Olympics, 2002 FIFA
World Cup and the 2012 G-20 Seoul
summit.
• Using Republic System with mixed
legal system combined of
European civil law, Anglo-
American law, and Chinese
classical thought.
• Led by President in Executive
Branch.

5. 1945-1950
The transition from a
colonial to
independent
economy
1950-1959
The Korean War and
Reconstruction
1960-1969
Transition from low to
high growth
(Park Chung Hee)
1970-1977
Five Year Plan &
Export-Led Growth
1978-1982
Unstable Growth and
Recession
1983-1996
High and Stable
Growth, Economy
Development & Low
Inflation
1997-1998
The Asian Financial
Crisis
1998-2005
KEF (Korea Economic
Reforms) – Financial
Restructruring
2005-Present
Development of
Creative Economy,
Tourism & Expanding
MNC-SMEs- PPP

6. 1945-1950. COLONIAL TO
INDEPENDENT ECONOMY.
Two senses of economy
separation sectors: SOUTH
(Agriculture & light industry)
and NORTH (Energy & Heavy
indus try).
1949-1960. POOR FINANCIAL
CONDITION. Republic of
Korea GDP was very low. GDP
per capita around $100, poorer
than Philippines after Post
World War
1949. AGRICULTURE BASED
COUNTRY. Republic of Korea
(South) considered as an
agricultural nation exporting
rice, tungsten & fisheries.
1955-1960s. INITIAL
TRANSTION from PURE
AGRICULTURE to
INDUSTRIAL ENTERPRISE.
Industry mostly operated as
textile industry.
1950-1951. REVAGED BY
KOREAN WAR. It caused the
high inflation, conflict of
price stabilization policies,
unstable trade structure
especially import and export
balances
1951-1956. OVER AMOUNT
IN BIG AID VOLUME by US
& IMF given in post-war
which caused local
agriculture business to be
depressed

7. EPB (Economic
Planning Board)
Five Year Development
& Economic Planning
MoF (Ministry of
Finance)
Top-down Leadership,
(General Headquarter style)
Park himself made major decisions
to control South Korea economy.
state-owned
banks & LAND
REFORM POLICY
MTI (Ministry of Trade
+ Industry)
industry/business
associations/Chaebol
FKTU (Federation of
Korean Trade Unions)
(gov’t-controlled)
industrial unions
Businesses
National Budget
(Per capita income rises
17x)
Coopted labor

8. FAILURE,UNSTABLE
GROWTH &
RECESSION
(1979-1982)
• Harvest Failure in
1981
• Slower Pace Growth
• Negative Growth Rate
into negative 1
• Radical Reappraisal of
Economy Management
• Unstable growth of
export-led industries
(highly creditable in
1981 but sluggish
performance in 1982)
ASIAN FINANCIAL
CRISIS (1997-1998)
HIGH GROWTH, &
RECOVERY IN
SOUTH KOREA
(1983-1996)
• The collapse of Some
Chaebols Industry –
Hanboo Steel in 1997
• More than 1 Million
People were out of work
• Bail out from
government controlled
bank credit didn’t work
• Bail Out & loans in
amount of USD 57 billion
from International
Monetary Fund
• Money supply was
tightened to keep
inflation under control
• Devoted to reduce
government
involvement into the
economy.
• Inflation was lied around
3-4 percent.
• Known as Second-Take
off stage into high and
stable growth in South
Korea until 1996.

9. Leading
in K-POP
Entertain
ment
Industry
World’s
4th Oil
Refinery
World’s
3rd
largest
steel
producer
World 5th
Automob
ile
Producer
World
Leading
in
Science
& Techno
World’s
largest
ship
builder
US,
Japan, HK
as
strategic
export
partner
China as
largest
export
partner
Export
on
Compute
rs, chip
Export
on
Petroche
micals
Export
Semicon
ductors,
USD 466
Billion in
Export
Value
Japan
and US as
Import
Partners
Import
Partners:
Saudi
Arabia &
Aussie
China as
largest
import
partner
4th
largest
oil
importer
Import
oil,
organic
chemical
USD 417
Billion in
Import
Value

10. • Achieving more
with less-toward
world class
efficient
government
Government
Reform
• A world class
economy ? Only
with world class
companies
(Chaebols
expansion)
Corporate
Reform:
Chaebol
• Setting free
South Korea’s
Labor Force for
the next several
strategic years.
Labor Market
Reform
• Expansive
Foreign Direct
Investment as a
new growth
catalyst and
driver
Opening Up to
Economy
• Humboldt
(Germany) and
Harvard (US)
Replications in
South Korea
Universities’
Reform
• Utilizing Korea’s
largest untapped
human resource
in regards of
developing
strategic sectors
Emergence of
Women Power
• Building trust,
empathy and
emotional
relationship in
long term-basis
Social Capital
• Shining Koreans
through by
expanding
Chaebols &
Entertainment
sectors
Land of
Opportunities,
Trading &
Business

11. SOCIETY AND CULTURE IN SOUTH KOREA
Status system was replaced by modern democratic social
system
Broad range of political opinion
Large influence of neoliberal capitalist system to society
Confucian values became less viable
High level of education
Relatively homogeneous society

12. SOCIETY AND CULTURE
• Gender disparity
• Income inequality tends to increase
• Longest conscription period behind
Israel and Singapore
Gini coefficient (OECD) 2011
Germany 0,30
Japan 0,33
South Korea 0,32
United States 0,38
OECD average 0,31
Gender wage gap (OECD) 2011
South Korea 37,47%
Japan 27,40%
United Kingdom 18,23%
United States 17,79%
Norway 7,78%

13. POLITICAL ADMINISTRATION & PUBLIC POLICY
Before 1988:
Capitalist developmental“
state
Economic development
was systematically led by
government
1988: Sixth Republic of Korea
- Democracy and prosperity
became primary concern of
government leadership
- Ideas of Modernization,
Democratization and
Globalization

14. POLITICAL ADMINISTRATION & PUBLIC POLICY
Transition
Process
from
1993-
1997
• Flexible labor market
• Open financial and capital
markets
Period
in1997-
1998
• Asian financial crisis and bailout
by IMF

15. POLITICAL ADMINISTRATION & PUBLIC POLICY
Presidents of South Korea
1988 – 1993 Roh Tae-woo
1993 – 1998 Kim Young-sam
1998 – 2003 Kim Dae-jung
2003 – 2008 Roh Moo-hyun
2008 – 2013 Lee Myung-bak
2013 – 2018 Park Geun-hye

16. GEOPOLITICS
• Geopolitics: the combination of politics
and geographical matters (natural
resources, territory)
GEOECONOMICS
• Geo-economics: the combination of ,
geographical matters and
economics/private business

17. A Scrimp Among The Whales (China, Russia,
and Japan) Influenced by these powers
Few Natural Resources but savings and
education for development
Bad position for efficient geopolitical
strategy

18. MOVING AWAY FROM
PENINSULAR KOREA
(GEOPOLITICS) THROUGH
FREE-TRADE
AGREEMENTS
ASEAN, USA, EU AND INDIA
INVESTMENT IN RESEARCH
AND DEVELOPMENT
SUBSIDARIES TO PRIVATE
COMPANIES SUCH AS
SAMSUNG & HYUNDAI

19. GEO-ECONOMIC
• Strategic relationships with China and
Russia, Japan, and USA
• Afraid of dependence of China (50% of export),
looking west
GEO-POLITICS
• President Park Geun-hye is converting
economical power to political power Geopolitics:

20. Chaebol
business conglomerate multinationals

21. 1940-1950
Favourable
treatment from
the government
1960's Military
takeover and
clean-up
1970's
Oligapolization.
Opening of
chemical
industries
1980's
Expansion of
business
1990's Asian
Economic Crisis 2010 Economic
backbone
Time Line
Chaebol Development

22. 1st Type
• Owner Monopolization
2nd Type
• Core Company Control
3rd Type
• Mutual Ownership

23. Concentration of
economic power
and ownership
Collusion
between politics
and business
Perspectives on
Chaebol
efficiency
Issues of legal
discipline

24. Distortion of
the market
order (SMEs)

25. After 97-98 crises, ROK FDI reforms which aided
in positive development.
Financial
Institutions
Capital Markets
Competition
Policy
Allowing Non-
Korean to own
land & property
Reformed
Labour Law
Improvised
intellectual
property laws
Transparency

26. EU has total
stock of
34.6%
Followed by
USA 24.6%,
Japan 15.1%
&
Netherlands
11.2%
The 1999
Foreign
Exchange
Transaction
Act (FETA)
Inbound FDI
13.7 billion
& Service
industry up by
15.4%
FETA is fully liberalized all current-account
transactions by business firms and banks

27. • Further aims to attract more foreign
investment by promoting 6 Free
Economic Zones
• 6 Free Econ Zons are
Incheon, Busan/Jinhae,
Gwangyang Bay, Yellow Sea,
Daegu/Gyeongbuk,
Saemangeum/Gunsan
• The FEZs differ from other zones
designated for foreign investment
in their focus on creating a
comprehensive living and working
environment
• Such as biotechnology, aviation
,logistics, manufacturing, service
and other industrial clusters
• As well as international schools,
recreational facilities, and
international hospitals

28. « Etiquette is what you are doing and saying when
people are looking or listening. What you are
thinking is your business »
Virginia Cary Hudson

29. South Korean unique business etiquette mainly exhibits
in six aspects , which are :
Introduction Greeting
Bear in Mind that the Cultural and Societal
aspects are very important to consider
Business
Cards
Business
Meeting &
Negotiations
K-Type
Management
Style
Gift Giving

30. Introduction and Greeting
The usual Greeting in South Korea is a
bow followed by a handshake

31. Business Card
It is recommended that foreigners obtain bilingual
business cards with Korean on one side and
English on the other side

32. K-TYPE
• 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
INHWA KIBUN
• Inhwa and
Kibun are two
key principles
of South
Korean
Business
Culture
GIFTS
• Gifts help
secure favors
and build
relationships
AGREEMENT
• A signed
agreement will
not always be
considered an
obligating
agreement but
a starting point
for further
negotiation

34. Bibliography
Jung, J.-y. (2013). Post-crisi restructuring of the corporate governance of Korean companies.
Corporate Governance, 4-17.
Kee, K. B. (2013, Oct 02). Korean chaebol debt surpasses government's. Retrieved from Bamboo
Innovator: http://bambooinnovator.com/2013/10/02/korean-chaebol-debt-surpasses-governments/
Nam, I.-S. (2013, July 13). Seol takes closer look at chaebols. Retrieved from Korean Real Time:
http://blogs.wsj.com/korearealtime/2013/07/03/seoul-takes-closer-look-at-chaebols/
Savada, A. M., & W, S. (1990). South Korea: A Country Study. Washington: GPO for Library of
Congress.
Tanter, C. H. (2001). The antinomies of success in South Korea. Journal of International Affairs, 63-
89.
Yon-se, K. (2013, Oct 13). Ting Yang woes reopen debate on chaebol limits. Retrieved from The
Korean Herald: http://www.koreaherald.com/view.php?ud=20131013000289
Transforming Korean Politics – Democracy, Reform and Culture, Kihl Y, New York 2005
OECD Factbook 2011: Economic, Environmental and Social Statistic
http://www.mongabay.com/history/south_korea/south_korea-social_
classes_in_contemporary_south_korea.html, retrieved 19.10.2013
http://databank.worldbank.org/data/views/reports/tableview.aspx, retrieved 19.10.2013
http://www.economist.com/node/21538104, retrieved 20.10.2013
Korea Confronts Globalization, Yun-Shik C., Seok H. and Baker D., New York 2009
Korea and geopolitics: http://www.indianexpress.com/news/korea-rising/1143722/0
Korea becomming a whale amongst whales: http://www.atimes.com/atimes/Korea/NH22Dg01.html
http://www.atimes.com/atimes/Korea/NH22Dg01.html
http://www.nationsonline.org/oneworld/korea_south_profile.htm
http://www.koreaherald.com/view.php?ud=20120314001140