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Korea
We have chosen to compare and contrast U.S. managers with the managers of The Republic of Korea (ROK). The ROK is a tiny nation of 42,621,000 people residing precariously on the southern half of the Korean Peninsula (Cook l995). It has a very high population density with 1.121 persons/ sq. mile. They are ethnically homogenous with 99.9% being Korean and .01% Chinese. The age distribution is 30% under 15 years of age and 4.3% over age 65. They have a life expectancy of 73 years of age for females and 66 year of age for male. The primary religions are Confucianism, Mahayana Buddhism, Ancestor Worship, Shamanism and Ch'ondagyo which account for 66% of the population with another 28% practicing the Christian religion. The Han'gul writing system is the official language of Korea with English being widely taught in many schools. The government is made up of the executive and legislative branches. The Head of the State or the Executive President is elected by direct popular vote for a 5 year term. The Legislature is comprised of a 299-member National Assembly which is elected on a 4 year term by universal adult suffrage. The economy is estimated to produce GDP of US $121,310 million with a per capita income of US $4,045/ year. The total number of persons active in the economy was 16,900,000 with a 3% unemployment rate and a literacy rate of over 90% (East 1990). Koreans are a sincere, warm, and friendly people. They make deep commitments of friendship and loyalty that are permanent if they are treated fairly and respectfully. By the same token, if they are mistreated, they make formidable enemies. A significant percentage of ROK's top managers are educated in the United States, and speak fluent English. The Topics we have chosen the compare and contrast are Leadership, Decision Making and Motivation. Leadership Although managers in Korea and the United States have similar problems and responsibilities, important cultural differences dictate how they achieve the goals. Since both cultures have the same goals in business - profit and success, they display some similarities in their leadership styles. First and foremost, all managers expect their employees to behave in a professional manner and accomplish the tasks assigned to them. Very little tolerance was noted in either societies for substandard work product. Additionally, management in either country recognized the importance of its role in the overall success of the business. Communication was found to be the decisive factor to achieving this objective. Surprisingly, Korea has adopted this U.S. management style of openness with less resistance than other Asian countries. Korea has typically been viewed as a country were military traditions have been pervasive and obedience to authority is deemed absolute. The fundamental change in philosophy may be explained by the fact that Korea is a land of division, so the people are willing to listen and respect another person's point of view. (Baum 1987). With Korea fast becoming an industrial power, the idea of communication through listening is essential to the promotion of post-Confucian work ethic. Several major difference were noted when comparing the leadership style of Korean and American managers. A major difference is how managers tend to view the cultural importance of groups. Americans tend to focus on the individual, with each person being responsible only for their own actions. Leadership is conveyed more by example than by interaction and employees tailor their performance to their own personal aspirations. Koreans view work performance as a contribution to the group. This originated from the fact that most countries in Asia function in basic group oriented structures. (Doktor 1990). Therefore leadership is enhanced when instructions are communicated to the entire work force rather than to one individual. Of equal importance is the way managers are viewed by the employees in the business. Americans tend to view their superiors as the enemy and people to avoid at all costs. The deference given to them stems more from fear and/or envy than from basic respect and concern for the company. Koreans view their managers as important social leaders. Respect for rank and status within the business environment is high so the manager's role takes on great symbolism. (Doktor 1990) The manager is seen as a representative of the organization and his position holds great value in creating strong links in the firms organizational structure. For instructions to be respected, ritual proprieties and courtesies must be observed. Decision Making Relationships between employer and employee, superior and subordinate, is more like that between family members rather than like master and servant relationship. This explains why seniority is a big concern when companies consider who should be promoted. Koreans also view the father as an authoritarian figure. He must be respected by all members of the family, and his words must be obeyed. This philosophy is also reflected by the training programs in most of Korean companies. Employees are trained to accept orders, and the company leaves little imagination for its employees (Janelli 1993). Therefore, South Korean employees are not involved in the decision making process since it is reserved for the top management only. Most of the Korean company is based on technical qualifications, a rigid hierarchical order, codified rules and regulations. In most of the companies, one of the most important standards for regular promotion is length of service. People at the high level are considered as highly loyal to company, and more competent than other people in the company. That is why decision making is concentrated in the upper levels of managerial hierarchies and major decisions, especially those requiring expenditures, go through a formal procedure requiring approval from upper level of management. This formal approval process is considered more a means of authority and control rather than consultation and participation. Unlike Japanese, most Koreans will decide in their own favor when confronted with a choice between the interest of the group or their own interest, ethics play no part in them (Chu 1991). Therefore, it is very important for managers to consider the benefits to the employees when they make decisions. In order to do this, decision are always long term oriented. Interestingly enough, this type of decision making mimics the father taking care of his children, referring once again to the importance of the family in Korean culture. In contrast, managers in American firms are highly influence by the idea that they should maximize shareholder wealth (Eiteman,1995). Since most of the American companies are publicly owned, management, especially the CEO, are closely monitored by the shareholders. Their performance is based on how much wealth or value they can created for the shareholders, not how much welfare they can created for their employees. Managers who under CEO's control certainly have to follow the same pattern. Unlike Korean company, managers are chosen predominately by their performance in the company; seniority is not a big concern. Similar to a Korean company, important decisions are typically made by high level managers after some team discussions, Sometime, a decisions can involve employees such as foremen or supervisors and can be implemented without the approval of high level person. Relationships between managers and employees are not as intensive as in Korean company. In American companies, managers are more like a working companion rather than an authoritarian figure. In America, the obligation for managers to take care of his subordinates is not as strong as in Korea. They sometimes will sacrifice employees' welfare in order to keep their jobs. US managers are usually evaluated once every year, and in order to get a better performance during a short period of time and get promoted, their decisions are usually made to achieve a short term objective. Motivation Over the last quarter century, the ROK has achieved what is widely acclaimed as "the economic miracle on the Han Rive." Since Korea embarked on economic development in early 1962, its economy has grown at one of the fastest paces in the world. As a result, Korea, long known as one of the world's poorest agrarian societies, has emerged as an upper middle-income, fast- industrializing country. The key to this success was the adoption of an outward--looking development strategy making exports the engine of growth -- a strategy that reflected Korea's insufficient natural endowments, its limited domestic market and its abundant, well-educated, industrious manpower. In general, Korean's are motivated by good education which position themselves well in today's marketplace. From this point they are motivated by high achievement for which they are not always rewarded for because of the authoritarian culture they live in. When comparing motivation in Korea with that in the United States we found that US employees receive more job-related information than do their Asian counterparts. Therefore Korean employees might be somewhat uncertain about how they are to execute their jobs which may dampen their motivation to achieve. In the US, contingent-based reward systems tend to be used with rewards typically being based on merit. Salary level is predicated on performance and education; incentive pay on performance; and promotion on performance. In Korea, however, salary level is based on seniority; incentive pay is uniform; and promotion is seniority based. Korean employees have little prospect for long-term rewards or promotion, irrespective of performance. The US individualistic orientation tends to drive US employees to aspire to achieve through promotion. This result is a feeling of success, which can generate extrinsic rewards and be a source of self satisfaction. Alternatively, Korea focuses on group harmony and unity and thus are not as driven for individual promotion. Therefore in conclusion US employees have a higher valence for personnel growth and development than do Koreans. Both US and Korean employees are motivated by monetary compensation (Dubinsky, Kotabe, Lim, Michaels 1994). Hypothetical Scenario To: Mr. Willie Hopkins; Manager of South Korean Operation From: Human Resource Department; AT&T Engaging in a joint venture in Republic of Korea is a big leap towards attaining the internationally oriented goals that our company has sought. There is an urgent need for technology, manufacturing and marketing skills in South Korea that can not be fulfilled by the locally. This is the main reason why we are engaging in a joint venture with Sumsong Corporation. This manual is designed to inform you about Korea in general and offers some strategies on how to deal with various difficulties you may experience. 1. Learning and Training It is very important for you to know and understand Korean culture, religious value, politics, geography, and history. By learning about these, you can improve your adaptability and flexibility to adopt Korean business ways, behaviors, and thinking. The knowledge of Korea would help you make a close relationship with Korean employees. Language training is also crucial for you to be successful in your long-term assignment because only a small percentage of Korean businesspersons and government officials speak English (Mente 1988). In addition, you should recognize that technical, managerial, and legal knowledge about your assignment. The Human Resource Department is here to train you. The first session is for general and cultural knowledge about Korea and Korean (Hunglu). This session will commence months before you assignment begins and utilize written materials, seminars, video, meetings, and a preliminary visit to Korea. The second session requires you to learn about your assignment. This will be also done before you go to Korea (Alkhafaji 1995). According to a study (Hill 1984), 90% of expatriates' failure results from their spouse' problems such as, isolation, loneliness, and boredom. The HR department highly recommends your spouse and children's participate in the first session along with continual updates initiated by you. An executive of Sumsong, who has a strong connection to Korean government and business world will be introduced to you as your mentor. You should contact him and grasp actual Korean government and business situations. To make a close relationship to the governmental and business people is to lead your assignment success. 2. Social and governmental interference Korean culture is highly influenced by the traditional family relationship, village discipline, and Confucianism. The traditional family relationship and village discipline enforce seniority and harmony. A father holds the family's property and has a absolute power over his family. His wife and children cannot openly express disobedience, assert independent rights, or confront the father. A village leader, usually an eldest person has similar power and authority. In order to live comfortably, the locals should keep harmony and cooperate among themselves. Therefore, thinking as a group is much more important than thinking as an individual. Confucianism also strongly affects Korean culture. It emphasizes the need for authority to govern the masses and advocates the virtue of subordination and endurance of women to become good wives and mothers. This leads the Korean culture to display characteristics such as, authoritarianism, collectivism, and male dominance in the society. Note that governmental factors may interfere with your assignment. Hart-Landsberg(1993) mentions that Korean government regularly targets new areas for development by encouraging the establishment of domestic firms to replace imports. These new domestic firms are protected by both trade restrictions and limits on foreign investment and, when judged capable, are required to export as well as meet domestic needs. Therefore, you must pay attention to the Korean government policy and action relating to the Korean venture. Also, even though the Korean government changed from a military government to democratic government, the military still has strong influence over the government. Hence you need to consider the present relationship between the government and the military. 3. Organizational factors Corporate culture All of your superiors, subordinates, and co-workers are Korean and the organizational structure is based on that of Sumsong. Korean businesses generally have an organizational structure of vertical concentration of decision making at upper hierarchies and horizontal concentration of functional control in staff departments. Confucianism has had a great impact on the organizational culture of Korean firms. Thus, the cooperate culture is hierarchical, authoritarian, and harmonious Social status remains a vital factor in personal and business relationships in Korea. To employ a Korean with a low social status as a manager because of his English language ability, experience, and other qualifications, and expect him to effectively manage employees with higher social pedigrees will result in major problems (Mente 1988). Management power groups are also formed based on common geographical and school ties. Informal relations such as school ties play a strong factor due to feeling of common identity and belonging. Great emphasis is placed on graduation dates due to the importance of seniority. Social interaction and personnel decisions are affected by a common background and compatibility brought on by being from the same region. Because management and labor relationships are similar to that between a father and his sons, Korean employers treat their employees with enlightened and personal concerns that keep them loyal and motivated. Companies should bear the responsibility for establishing and maintaining a relationship of integrity and trust between the managers and employees. You should develop and maintain the expected relationships by remembering not to break any of the taboos of Korean society while demonstrating a sincere appreciation for Korean sensitivity. Communication You should realize that formal etiquette is very significant. You can see today that traditional bows are still the official, formal method of greeting and farewell. There are several different kinds or grades of Korean bows, each depending on the age, rank, and social position of individuals involved as well as the situation in which they are bowing (Mente 1988). The official call in South Korea is another way of showing social status. It is used at formal affairs especially if you are visiting the company for the first time. It is extremely polite and expedient to make appointments well in advance. As a means of respect, most Korean executives will stand when a visitors enters their office. It is also regarded as impolite for lower ranking employees to remain seated while their superior stands. High-level Korean executives may not stand up when someone they do not know arrives unless informed that the visitor outranks them or is a special guest (Janelli 1993) It is highly recommended to spend some time with the Korean employees outside their working hours. Generally, South Koreans do not feel free to communicate openly with their superiors at work. However, they are willing to express their minds outside. During these occasions, they voice their problems and dissatisfactions about their jobs and relationships. You will have many opportunities to spend your private times with your Korean employees. Do not hesitate to participate in the events such as an eating and drinking party, a nighttime singing session, or a picnic. Personal relations and contacts are very important for Korean business. These situations will help you make close relationships with the employees. Please note that if you fail to participate in these activities, you will likely create serious problems because Koreans usually expect your participation. Employee motivation The evaluations in Korean companies place much emphasis on contribution to the company, ability of performance, and personal character and attitudes. The ability aspect includes job knowledge, creative planning, understanding, judgment making, and growth and development potential. Personal character and attitudes include seriousness, responsibility, effort to self- development and improvement, and human relations. Hard work and harmony among employees is highly valued. It is difficult to promote someone of exceptional ability and qualifications without senior status. A worker often leaves his company if a colleague whom he considers less qualified than himself gets promoted. However, seniority is more important in lower levels of the organization. The standards for regular promotion in Korean companies are length of service, achievement, including awards; training, foreign language competence, and merit of performance. Female workers who have the same job classification, titles, qualifications, and educational levels are still paid less than male counterparts because of social influences because Korean society is male-dominated. If you promote a woman, understand that it may be advisable to make an informal agreement with the other employees otherwise the promotion could rupture the morale of the employees and seriously affect performance. If you promote someone, evaluate the employee's performance, or give rewards, you have to consider the factors previously discussed and above all, strive to maintain harmony among your subordinates. Reference Alkhafaji, Abbass F. 1995. Competitive global management:principals & strategies. Baum, Laurie. 1987. "Korea's Newest Export: Management Chu, Chin-Ning. 1991. Asian Mind Game. New York, NY: Rawson Associates. Delray Beach, FL: St. Lucie Press. Cook, Chris. 1995. The Fact on File World Political Almanac,Third Edition. New York, NY: Fact on File Inc. Doktor, Robert H. 1990. "Asian and American CEOs: a comparative study". Organizational Dynamics (Winter) : 46-56. Dubinsky, Alan, Masaaki Kotabe, Chae Un Lim, Ronald E Michaels. 1994. "Differences in Motivational Perceptions among U.S. Japanese and Korean Sales Personnel". Journal of Business (June): 175-185. East, Roger. 1990. World Fact File. New York, NY: Facts on File Inc. Eiteman, David K., Arthur I. Stonehill, Michael H. Moffett. 1995. Multinational Business Finance. Norwalk, CT: Addison-Wesley Publishing Company. Hart-Landsberg, Martin.1993. The Rush To Development: economic change and political struggle in South Korea. New York, NY: Monthly Review Press. Hill, Charles. 1984. "The Pitfalls in Diversity". Janelli, Roger L. 1993. Making Capitalism: The Social and Cultural Construction of a South Korean Conglomerate. Stanford, CA: Stanford University Press. Mente, Boye De. 1988. Korean Etiquette & Ethics in Business. Lincolnwood, IL: NTC Business Books.

 



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