Daniel:  Hi, everyone. This is Daniel Lafontaine, KBC 9.9 with Daniel. Tonight’s topic is how can foreign companies be supporters their Korean counterparts? Anybody who wants to can get in there and get up and jump in right off the bat.

Chance:  I wouldn’t mind starting. I think it’s important to know off the bat that when dealing with any two companies, nine out of ten mergers and acquisitions fail to add value and eight out of ten joint ventures fail to add value. It’s an interesting topic that we’re talking about tonight, and I think there are two real big problems. I think it’s a two-prong approach. The first is it’s important that the two companies have value congruence. Why are the companies doing business...

Daniel:  I know a lot of joint ventures or a lot of companies that work together, they’re completely dissimilar, and some of them work very well together.

Chance:  Well, it depends what your definition of work very well together is. Do they make money together, or do they work well together?

Daniel:  That’s a good topic. That’s a good point. What about you, Lara? What do you think?

Lara:  I think you’ve got a really good point, Chance, about it’s important they share the same values. I think, though, that when doing business in Korea that, regardless of the values of each company and regardless of how similar or different they might be, in order to be a good business partner with a Korean company, you need to understand that in Korea, business is personal. Koreans won’t work with you – it doesn’t matter what your values are – unless they like and trust you.

Chance:  It’s very much relationship-based, more as it’s contractual in Westernized civilization.

Daniel:  Exactly.

Lara:  Exactly.

Daniel:  What do you think about it, Emanuel? Do you agree with Lara?

Emanuel:  Well, I certainly do. In fact, I think it’s sometimes difficult for us who start out with an assumption that there’s going to be a clear monetary reward on the table at the beginning. I think this is a special point is to imagine a win-win relationship and also to be willing to accept an in-kind payment. You’re building a relationship to say I will do this for you and you’ll do this for me to establish this relationship, even if you can’t actually sign an immediate contract.

Daniel:  I agree with that. I just helped two companies in the last year get in contact with each other. There was an Italian company and a Korean company. The Italian company was really hard on me because they’d be jumping... I think the biggest problem sometimes with foreign companies is you have one international manager. He has maybe 50 different products, and he has maybe ten different countries to work with. He has to start a relationship with a Korean

company. He has no time. It’s usually the biggest problem, I find. That was my biggest problem when I was trying to get him to talk to the Korean company and get him to be at least a little bit consistent in his dealings, but he was always jumping around everywhere. And I met the guy. The guy is absolutely brilliant. He has a Ph.D. in administration, but it was difficult.

What about you, Rod? What have you been thinking?

Rod:  Well, I’m really glad that people have started talking about the contract, because I think if we focus on the contract, it seems to be that from Western countries’ perspective, a contract is central, absolutely central, to any business relationship. But it seems to be, from my perspective, that a Korean company seems to take a much bigger perspective in terms of contracts.

Daniel:  Exactly. I was just thinking, if we’re talking about relationships, what is the biggest thing in the relationship? It’s a marriage.

Lara:  Yeah, what’s it based on?

Daniel:  It’s a marriage. Is a marriage based on a prenuptial agreement, or is a marriage made from something else?

Rod:  Exactly. Really, I think that one of the things that we need to make sure that Western companies are in context with is that contracts are evidence of a relationship rather than a storyboard or rather than the absolute be all and end all.

Daniel:  Exactly.

Lara:  That is an excellent way to put it, Rod.

Chance:  More like a framework.

Daniel:  More like a framework. A marriage is like a contract. When you get married, the moment you get the marriage, it’s when everything starts to get negotiable.

Lara:  That’s right.

Rod:  There are some amazing examples of Korean and Western companies working for long, long times. I’m thinking about Pepsi and Lotte. Pepsi and Lotte have had this relationship now. I think it’s something like 26 years that all the Pepsi brands have been operated through and bottled through and all the logistics operated through Lotte. There would be no way you could write a contract to encapsulate that deal. So if people come to Korea and seek to contract, I think they’re going to be in a lot of trouble.

Lara:  I think that’s an important point you raised, Rod, about if they stick to contracts contract. You’re going to be, basically, in a lot of trouble and not very satisfied. I think that’s what happens with a lot of the English teachers that come over here, because I think we all know that as soon as you come over here, the contract is signed and everything, that’s when things start changing.

Daniel:  Exactly. When I came to Korea, I made a deal with my boss: You don’t bug me about my private lessons and I won’t ask you for my ticket home. It’s negotiating. I remember hearing once, Westerners, we always think in terms of persuasion. Koreans, or Asians in general, it’s about give and take. It’s more like what you really want that you really need to keep, and
everything else, negotiate.

Emanuel:  Let me make a couple suggestions in terms of what you can concretely do that doesn’t cost you anything, and that is, first, you can affirm a long-term relationship with Korea. You can speak about how much you respect Koreans and their work ethic. You can say things like, “I want to buy a house in Korea.” You don’t actually have to buy a house, just to say that you want to. You can introduce Koreans to other Koreans so that they establish business relationships in which you play a facilitating role, which helps to increase your prominence.

Daniel:  Just to jump in here, another one is when you introduce a male friend to one of your English female teachers from your hagwon.

[laughter]

Emanuel:  Or you can promise to marry someone’s children for them. You can promise to marry your children to someone else’s children, which of course I wouldn’t seriously go through with.
It opens this friendly banter.

Daniel:  Exactly. What about you, Chance? What do you think?

Chance:  I think what you’re talking about is really important, Rod. A lot of global companies, they tend to go into a new market or get a new partner, and then they don’t tend to have a presence there directly, maybe a lot of phone calls. I think, especially in today’s marketplace right now, you need to have a local presence, and you need to make the people feel comfortable with you and have regular, meaningful communication with them, because there are so many things that get lost in translation.

Daniel:  You have about only 30 seconds left. Finish it off, Chance.

Chance:  If you really work and you live in one area ,and you really get to know the culture and the people there, then it is give and take and you get to understand what you have to offer and what they have to offer. 

Daniel:  Very good. What about you, Lara? One last thought?

Lara:  No last thoughts. I’ll hand it over to Rod.

Daniel:  Rod?

Rod:  Alright. Thanks a lot, Lara.

Lara:  You’re welcome.

Rod:  I would say talk twice as much and just keep on giving them options. Just keep on giving them options. I know everybody likes to be respected, but I know Koreans really, really respond well when you obviously respect them and you obviously respect their intelligence. That’s my final thought: Talk twice as much.

Daniel:  Emanuel?

Emanuel:  Well, I would say for your important connections with partners, write down the names of their kids, remember some family details, and constantly reaffirm that it’s a long-term
relationship.

Daniel:  Very good. This is 9.9 with Daniel. Today we have been talking with Emanuel, Chance Barkley, Lara Tosh, and Rod. I hope you had a great night. Take care, and talk to you next time.