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Permalink Reply by Eun-Shil Park on January 5, 2012 at 9:10pm

There is also an another interesting book about your discussion thread: Dr Kimio Kase - Asian vs Western Thinking Management Styles: http://www.palgrave.com/products/title.aspx?pid=415336

In this coming year 2012 we will have this author for our New Economic Slice 2012. Your link from Forbes at least has a catchy title. Food for thought!

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Permalink Reply by Darren QX Bean! on January 11, 2012 at 7:57pm

Book looks interesting Eun-Shil, thanks for the link.

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Permalink Reply by Darren QX Bean! on January 11, 2012 at 8:18pm

Well few people seem interested but in the hopes of getting discussion I'll throw out this:

It seems like 'knowing your limits' is important, but if your limits are higher than 'realistic' in a Western exec's eyes isn't it better to fully commit to that?  To develop in 30 years, to take over the mobile market, etc.? 

And given a tendency of employee disgruntlement to remove morale, can a hierarchichal system dissipate disgruntledness ("he's the boss" being more internalized) or does it make it worse? 

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Permalink Reply by N.Barker on January 11, 2012 at 8:45pm

I don't think Korean culture is imposing a lower ceiling on itself -- at least in terms of large Korean companies that regularly do business overseas. I'm cautiously optimistic that the younger generation, who will be in management positions in the next 5~10 years, will be able to implement more globally standard management practices. I'm also hopeful that the older, industrial style of management can be phased out and more emphasis put on meritocracy and results-based output.

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Permalink Reply by Mike Park on January 12, 2012 at 12:37am

Darren - I'm not sure what is at the center of your proposed discussion, or what is your point of interest. In other words, on what specific subject do you want to obtain member feedback/comments? For example,

1) The article of Eric Jackson in Forbes: I seriously doubt Eric had specifically targeted, or secretly targeted, Korea (and Korean management style) and/or Samsung's management style in when he wrote his article. What would be his motive to write (contemplate) a negative article? It is clear, however, that Eric does not (did not) understand how business is run and won in Korea. In my view, the reason for why there was no "western-style" business case is because supposedly his auto-industry business was going to be approved and supported by powerful people at the highest ranks of Korean government, industry and bankers. Samsung's plan (support), however, fell apart after the Korean government had to take an unplanned detour during the IMF crisis, where President DJ Kim asked/told Chaebols they couldn't/shouldn't continue to get/stay involved in overlapping industries. Autos went to Hyundai, not Samsung. It could have easily went to Samsung (not Hyundai) but Samsung elected to focus on the High-Tech/Electronics industry as their core/major 'business" - remember that KIA was once out of the market and it was Hyundai that acquired the troubled company. Another case example for the lack of a western-style (or "class-room") business case is telecommunications. If Eric Jackson (hypothetically) thinks that the SK group had a terrific (and solid) business case to start the cellular phone operator business, he would be wrong, again. The right to this business ("real-kicker") was award to the son-in-law of President Roh Tae-Woo (13th President of South Korea) who now runs SK Telecom. If you were not the future son-in-law, you did not have a chance of winning this lucrative future business. Hence, the business case is not what got SK Telecom started on the right step. The best US equivalent would be the first trans-continental railway built between 1863 and 1869 - there was no real "clean and clear" business case (as taught in today's best MBA classrooms).

2) Korean Management Style: This is hard to generalize, and more difficult to define. Each person is different, every company is different. However, there is traditionally a very strong "hierarchy" in Korean culture. This worked great during the manufacturing era (1960~1990s), but during the digital era (post-2000), this hierarchy model is not so competitive as it does not encourage multiple views, dialog/discussion,creativity and innovative. Why "Kodak" failed as a company after 131 years may be of more interest to scholars such as the author of the Forbes article. What are the very "visible" traits (from a foreigner view0 about Korean management style? It would be interesting to hear them (or your experiences/views)...

3) Starving country: Many people (including people in Europe/United States) were hungry during the great depression and between World War 1 (1914) and World War 2 (1945): For instance, let's take the case of Russia in 1921 (aka great famine), historians have recorded many cases where men literally ate men - over 10 million died. People in Korea (during this what you so called "starving" period) starved because the Japanese took all of Korea's rice to rage war against Russia, United States and China. In other words, Korea was relatively a self sufficient country in terms of food before the Japanese invasion. In the United States, and before the great FDR (President Roosevelt) millions of people in the United States also starved - why did so many people line-up in lines to get food in the United States if they weren't starving. During the US civil war, and if you look at people (photos of Americans and soldiers) there are/were very very few "overweight" on today's term... My point here is that traditionally, Korea's land (rich soil) had historically produced good agriculture (enough food) for its people; and gave birth to some of the most marvelous civilizations such as the golden "Shilla" dynasty of the 7th century. All in all, starvation was caused by war and theft - not because of Korea's hierarchy traits. This means, Korea went from (1) about adequate levels of food, to (2) starvation during the war period, and now (3) have returned back to enjoy at least 2~3 meals a day for the average person.

4) Korean work ethics: Many people (leaders) in Korea realize that Korea only has its people as its natural resource. Hence, wealth is (was) produced the old fashion way --- wake up very early in the morning (become an early bird to catch the worms); and work until sundown - and then work some more (or study at night).

What you say about Korean work ethics is interesting. There was a story told to me about the United States from someone (a real person) who went to the US in the 1960s. She, an immigrant from South Korea, went to the United States in the early 1960s and she was very surprised (experienced culture shock). What was the reason, you ask? It was because she saw so many cars (people going to work) at 6 am in the morning on the freeway - so so early in the morning by old Korean standards - it was dark, but people (in cars) had their headlight (sign of energy/industrial wealth) turned on so brightly, and people were going to work. Thus, she came to the quick conclusion that this was one of the main reasons for why America was such a wealthy country.  With this said, Korea's work ethic today is rapidly deteriorating. For example, nowadays, people do not work every Saturday as they did in the 1970s/1980s. My point here is that obsessive work habits are due to South Korea's competitive landscape - need to survive with Japan (technology sophistication) and China (affordable labor) as neighbors.

5) Lower ceiling of functionality: I am not too sure - what do you mean by lower ceiling? The biggest, or one of the biggest, challenges facing South Korea right now is probably the "lack of transparency" and "fair-to-everyone" rules. Assets are Korea's "willingness to work harder (not always smarter/effective) and better (not always efficient) than anyone else to create value and obtain competitive results"

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Permalink Reply by Mike Park on January 13, 2012 at 10:09pm

On the subject of 4) work ethics, here's an interesting article about more early birds...

http://www.businessinsider.com/successful-early-risers-2012-1#

My favorite is Ben Franklin - the guy lives on after all these years: He said, "Early to bed and early to rise, makes a man healthy, wealthy and wise." He planned his routine around waking up at 5 a.m. and asking himself "What good shall I do this day?" 

BTW: During 1993-2002 (a period of 9 years), the official start-time for work at Samsung Electronics was 7:00 am. People drove to work at 6:00 am - just as those days in the US (50 years ago) as one immigrant had explained to me about (her view of) America's secret to success. During 2002, they moved their start hour to 8:00 am which still stands. Typically, 8 am is one-hour sooner than most Korean companies - making them still an early bird company.

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Permalink Reply by Darren QX Bean! on January 14, 2012 at 8:26am

Two quick hits:

(1)

The friend I have who is trilingual and graduated from a top university sleeps at his Chaebol 6 nights a week.  He wishes he didn't.  He complained above his super, and was told to "get back to work."   He doesn't believe a legal complaint would go anywhere due to the power of the Chaebol.  The company has sought patents based on his work so I know he's contributing. 

(2)

Ben Franklin slept 7 hours a night.  Is this evidence that >5 hours of sleep (5 being the recommended high school amount) is good for REM/biological learning purposes, or is the extra productivity from 2 more hours studying/working worth it?  (In any case there's a dorm at the office .... ha.)

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Permalink Reply by Mike Park on January 14, 2012 at 12:55pm

On (1).......Your friend's boss is what people call a complete "xxxxxxx" or "xxxx" in North America. He doesn't realize the world is changing. For instance, and specifically, in a new economy where working at one-company for 25~30 years is no longer the norm. Chances are, he (your friend's boss) is not going get another job in Korea, if there is a professional reference check done on him.  The "i-will-give-the-orders-and-you-shut-up-and-just-follow-my-command" system between supervisor/boss and team-member (reflective of Korea's military culture) will change over the next 10~15 years. You're friend's probably right, a legal complaint won't get him anywhere - just stir-up problems. 

On (2)......even if people stay late at work - let's say for 4 hours after dinner (7pm + 4 = 11 pm) - productive work is only for 2~3 hours - half or 25% of time is wasted. Thus, productivity is down. The history of labor in Korea is not based on an "hourly" wage. The basis unit is "monthly" salary. Hence, staying late at night (at work), is often a symbol of company loyalty and habit - more than real work.

I agree with you...the average person needs to sleep - according to doctor/scientist - 7 to 8 hours a day to be healthy. Sleeping 5 hours is why people fall asleep during class (for students) and at business meetings (for professionals) - particularly in Korea. The recommended 5 hours of sleep is a bad myth - not science. If one sleeps less than 6 hours during weekdays; then s/he will either wake-up late Saturday morning (sleep-in); or take an afternoon nap on Sunday to catch up on the difference - or maybe do both.

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Permalink Reply by Darren QX Bean! on January 14, 2012 at 8:21am

Mike thank you for your response and I apologize for being unclear.  I'll try to hone it a bit.  I don't think Forbes was specifically targeting Korea, just used a misstep (and anyone can make a mistake) by Samsung as an example.  And I see a lot of truth in your 5th point.   My intended direction was (skip to the bold point in 2 if scanning):

First keep in mind many people on KCB and outside have been hired or sought to create a "globalized" (often = westernized) management culture. 

The issue is, to what degree should (yes I said should) Korean management style be "hybridized" or "westernized" for maximum functionality.  Let's make it the best it can be, instead of the most like what we are used to.

Some things in the article:

Point 1 --- Not doing research.  This will never fly.  I don't think it's a trait of Korean management style but any manager, here or anywhere that leaps before they look will get hurt more than they will win the lottery.  (If there were other factors affecting the auto deal that's interesting but I don't think they undercut the central point of research, then action.)

2 -- Identifying 100% with the company.  This can be seen in any culture but I have heard (note: hearsay) from those who work with Chaebol and other bosses that yes, they see themselves "as" the company. The article itself says this trait "seems positive" but can lead to the company pursuing personal goals.  I personally witnessed a VC deal where the financiers wanted a clause that basically allowed the CEO to loot the company in case of certain personal emergencies.  When I told them that would never hold up, they said they didn't care because they knew it was going to happen and simply wanted it on the books when it did.   So I feel like I have good reason to say #2 applies to at least some Korean managers.  That said, the author himself says this trait "seems positive" -- so the questions I will apply here, the question I'm really asking for all 7 traits -- are (1) does this trait apply to Korea?  (2) what would the effort involved to change it look like?  and (3) is it better to use the positives of the trait than try to "fight" it?

3 -- Having all the answers. This cuts both ways.  Korean culture involves no public humiliation so people must pretend to have answers and people are not supposed to "press" for answers (teachers should move on from students who cannot respond, and you certainly don't break hierarchy and demand answers from your boss).   So is this actually a trait of Korean companies (it might seem so to newbies) or just a culture barrier?  If it's a trait, what about the three questions?  If a culture barrier, how do we see through it?

4 -- Eliminate anyone who isn't behind you.  This is a trait of hierarchy.  Change in Korea has been described by many sources as "swift and complete" -- which can be accomplished best by centralized, (relatively) unquestionable management.  This does not many people are "eliminated" necessarily but, at worst, they are simply silenced.  So applying the the three questions -- (1) I think a "softened" version of this applies to Korean management style, (2) changing from role-based to an individual-focused society isn't going to happen so (3) let's take advantage of the benefits--ideally, less employee dissent (lagging ethic) behind changes they disagree with.  The company can make small or sweeping changes quickly and completely.  So rather than fight this "weakness" an international manager can seek to use it positively when possible.

5-- image obsession.  Image over substance is a rule in Korea for both personal and professional lives (see #2 and also luxury sedans, moving to the "new area" of town, wearing suits to the park, plastic surgery ... etc. ...)  To me, this is definitely a trait of Korean culture (and therefore Korean management culture).  So (1) yes, (2) I think we will see a shift of feeling in the next 20 years as the younger generation (who grew up wealthy) tire of showing their wealth, become more concerned with (and able to) see "substance" instead of "image" (I also predict K-pop will significantly change after the "Korean wave" fades and K-pop must be restructured at home ... another thread) therefore (3) this trait should be used positively to keep a good image in the near future but a shift to something more substantial (obviously without completely disavowing image) would be good in 5-15 years.

6--Underestimating obstacles.  This is the work ethic/ceiling example I first gave.  Korea has already declared nothing is impossible and proven it on a few fronts.  (I think again the next generation will not have the "never say die" spirit of the past nor the "we can do it" spirit--which is simply a trait, not necessarily good or bad.)  So (1) yes (2) same 5-15 year range for change (3) use the fight now to fight the hard battles and do more research, jump in the fight slower in the future.

7--Relying on what worked in the past.  This, I feel, is the major "drag" for Korea.  A second entrant can only enter second, an exporter has to export.  Various news articles cite a "lack of creativity" in work and in education (which obviously shapes work).   Working long hours only wins if you are working in the right direction.  But I openly admit I don't know how new directions are found here.  Aside from dreaming and creative thought, there is no alternative to this, in any culture--we'd rather do what worked than do what didn't, right?  So I was really hoping someone more experienced than I would 1-2-3 this one.  

Anyway I hope that is helpful and thanks again for your responses.

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Permalink Reply by Mike Park on January 14, 2012 at 1:01pm

Wow - Darren, this is a just a huge bag of many stuff. I have to run and do something else right now, but I'll be back and attempt to provide a different (or similar) view to each of your 7 points. By the way, you have outstanding insight.

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Permalink Reply by Mike Park on January 14, 2012 at 6:04pm

1. Not doing research: Korea is not at a stage - socially - where you can perform good research. In other words, the quality of information is not good and amount of data is not reliable. For example, people who pay cash (rather than use credit card), may get a 2.5% discount - and the store owners will avoid being taxed (hide sales volume from tax authorities) - a case where the product sales transaction is not captured on record - because cash was used. With such practices wide-spread (yes, every reasonable adult who is Korean knows about the "pay-with-cash-without-using-a-receipt-to-get-a-small-discount" practices) - how can you rely upon market data as being accurate?

Thus, people/companies perform some type of preliminary research, but the type of research was/is more "reverse engineering" based upon a "me-too" product strategy rather than conducting consumer/market driven studies. I met a top executive 5~7 years ago, and his complaint was that a consumer product (let's say rice-cooker) released 3 years ago was still his best selling model - even though R&D (the department) designed, developed and released 5 new successive models as not being successful (had wasted large amounts of R&D expenditure without good results (ROI). He was trying to rationalize why this was the case. I didn't tell the gentlemen that the cause was probably the lack of good consumer/market research (before development, or in your words taking action). Perhaps this is something you can point out since your view is 100% correct, I think, on this instance.

Overall, you are right. However, and on the other hand, I heard LG Electronics had sent an expert team to the United States to design "refrigerator" fit for the North American market. I heard they are doing extremely well after conducting rigorous and extensive consumer and market studies. Including consumer focus group studies with product prototypes. So, there are signs that things are changing. The creation of the "kimchi" refrigeration is one other example of good research; and innovation - creating something new/unique.

Since, you have posted 7 items. I hope to provide my 2 cents worth on each of them, each day for a week. Remember, I am not arguing that I am correct - it's just one guy's (my) opinion and perspective which I hope to share with other KBC members...that's all - nothing more/nothing less - please stay tuned.

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Permalink Reply by Darren QX Bean! on January 14, 2012 at 9:49pm

Thanks, will stay tuned.  Also I like the use of "xxxx" in your prevoius post.   Looks better than "****".  And everything I've said is of course just one man's guesses, too.  I'm just trying to get input re: my biases so I can correct them as needed.

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