Before entering an international business environment, every commercial organization and company needs to learn and understand all possible cross-cultural challenges, which it will face when doing business with a foreign party. It is absolutely vital to be well familiar with the history, culture, traditions, customs, etiquette and attitudes of the country-partner, because this will help to find the shortest way to establish good business relations, as well as to achieve mutual trust and accordance on all business related matters.
Potentially, doing business in South Korea is a great idea, because, according to the reports of the world’s mass media, this country is now enjoying economic upturn and political stability.
Presently, it is the third largest economy in Asia after Japan and China (Gorrill, 2006). The country had an overwhelming success in restoring its economic system after the Asian financial crisis in 1997-1999, which brought Korean government to the necessity to create and follow a new fundamental developmental strategy.
In his research on current events in Korean politics and economy, Murray Weidenbaum, Professor at Washington University, comments on the situation as the following: “That nation now is one of the most vibrant and thriving democracies in Asia.
At the same time, it has become a regional as well as global economic powerhouse” (Weidendaum, 2006). Relatively low rates of unemployment and inflation, considerable export surplus, good GDP growth rate are the best evidences of a strong economic recovery. The role of the government in the process of economic development is crucial.
Korean government undertakes essential steps on making constructive reformations in many sectors, creating favorable economic environment for national and international investors, securing private property rights, educating future workforce, etc. “Government – Business” ties have primary importance, and governmental concern finds reflection in numerous subsidies and sponsorship of some industries, restrictions for import and privileges for receiving credits. According to the information, provided by Transparency International Bureau, Corruption Perceptions Index for South Korea is 5. (estimated 2005). Therefore, the country takes 40th place in the list of the world’s states, along with Italy and Hungary, which have the same CPI. From this perspective, the situation with corruption in South Korea is much better than the one in neighboring China (78th place) and Thailand (59th place), but worse than the one in Japan (29th place) (CPI 2005 in Focus, 2005). Principal cultural concepts of Korean society are called Kibun and Inhwa. These concepts reveal social imaginations about traditional moral values, living in social harmony and consent, etc.
Kibun and Inhwa teach people to be positive, honest, respect decisions and opinions of the others and observe numerous ethical rules of communication. In a business context, Kibun encourages the Koreans to do everything possible for making business successful, and Inhwa promotes the ideas of loyalty, obedience and formal behavior. Confucianism is the most common and influential philosophical and ideological belief in modern South Korea. The teachings of Confucianism have been developing for more than 20 centuries, and they are still shaping all social and cultural traditions of the Korean community.
The central Confucianist values and thoughts include the themes of humaneness, virtues, human relations, respect for family members and authority, rituals (as the systems of social norms), loyalty and honesty, etc. Business etiquette and customs are among the most principal cultural differences the Americans can face when dealing with Korean business partners. Like all Asian nations, the Koreans are very conservative and severe in observing their business traditions, which have been forming under deep influence of Confucianism and are based on following the strict rules of business ethics, demonstrating respect to the superiors, etc.
When meeting a Korean counterpart, it is necessary to be properly introduced to each other (preferably by the third party), using titles and full names. Greetings have to include a slight bow and a handshake, allowed for both men and women. When greeting a Korean, some eye-contact can be necessary in order to indicate true interest and honesty. It is essential to prepare business cards, which would have correct names and titles, and if possible have the backside translated into Korean. It is necessary to book all business meetings beforehand.
The Koreans prefer to schedule the most important appointments and negotiations between 10 a. m. and 12 p. m. Punctuality is one of the key values, therefore it is highly recommended to arrive to the meetings on time. Traditionally, the senior member of the delegation enters the meeting room first and takes the place in the middle of the table. Gift exchange is a popular practice, and usually the most appreciated gifts are some office items or national crafts. Traditionally, the Koreans value personal ties and relations very much, sometimes even more than their business contacts.
That is why it makes sense to spend all necessary efforts for establishing friendly personal connections and winning a good reputation. Personal attitude of the leaders of Korean counterpart can be a crucial factor when making their decision about starting business collaboration. Normally, the decision making process takes a lot of time, because every aspect of the matter must be discussed collectively. Finally, it is important to keep in mind some common customs and traditions of the country’s society.
When paying a friendly visit to Korean business partners, one must not forget to remove the shoes before entering the house. It is necessary to beware bringing a present made up of 4 items, because “4” is regarded as an unlucky number in Korea. Also, it would be polite to avoid familiarities, to remain always modest and self-controlled, not to talk too much and always show deep respect and gratitude to the hosts.
• CPI 2005 in Focus. (2005, October 18). Transparency International. Retrieved April 26, 2007, from: <http://ww1. transparency. rg/cpi/2005/cpi2005_infocus. html>. • Gorrill J. R. (2006). Doing business in Korea: Korean Social and Business Culture. Communicaid. Communicaid Group Ltd. Retrieved April 26, 2007, from <http://www. communicaid. com/south-korea-business-culture. asp>. • Weidenbaum, M. (2006). The bad news is really good news: with South Korea flexing its considerable economic muscle on the world stage, the U. S. suddenly has a new competitor—and partner—in the ever-evolving global marketplace? USA Today (Society for the Advancement of Education). 18 (6).
Cite this Doing Business in South Korea
Doing Business in South Korea. (2017, Mar 05). Retrieved from https://graduateway.com/doing-business-in-south-korea/