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back to index backASIAtalk October,  2005

How Confucianism shapes Korean culture

South Korea is a country that wears two masks. Walk through Seoul — with its skyscrapers, spanking-new malls and urban cafés that line the streets — and it looks every inch a cosmopolitan capital, mirroring Western influences.

But this is just one face. Beneath this façade lies a society deeply rooted in Confucian values and ideology. Few, besides those who live and work in South Korea, understand how much traditional values shape every aspect of the country.

Nowhere is this more evident than in corporate Korea. Foreign companies that wish to thrive in South Korea need to have a good working knowledge of the social and cultural issues that have impact on society and its corporate system.

Understanding the mindset of Korean executives is crucial to hiring and working effectively with Korean managers and local businesses.

When hiring a Korean executive, many multinational corporations tend to hire people based on merit only. This hiring practice creates tension in the organisation if societal considerations are not taken into account. There are many key factors that should be considered when it comes to exe­cutive searches at the senior management level.

School affiliation and age are issues worth considering, as both should be a factor in hiring decisions. For example, hiring a younger CEO who went to the same high school as a current, but older, vice-president may create problems within the organisation because a sunbae will not work for his whobae, a younger alumnus. Therefore, when searching for an executive, one needs to assess the organisation's needs and structure the search around these requirements in order to minimise disruptions.

Confucian influence has also led to Korean organisations being more hierarchical rather than matrix in structure. This means local firms rarely produce functional experts. Other than engineers, most Korean corporations rotate their executives through different divisions. Therefore, finding a functional expert is much harder.

And when it comes to decision-making within an organisation, consensus-building is still very much entrenched. Although conditions are changing, few responsibilities are allocated to junior executives. It can be difficult to find Korean executives who are decisive and who take full responsibility for their actions. This could be because Korean society does not encourage star culture” but emphasises harmony and egalitarianism instead. Developing an individual profile is not encouraged in a business environment.

Unlike their Western counterparts, who often are more eloquent, expressing their viewpoints clearly, Korean executives are notoriously shy about speaking up. As a result, when competing for a position, a Korean American has a much better chance of winning the job than a local who is reserved and uncommunicative.

Foreign firms should also bear in mind that nowhere in Asia is title regarded more highly than in Korea. With title comes respect — and this matters to Korean executives more than their pay cheque. For example, one never calls a person by his or her name; rather, it is always President Kim” or Managing Director Lee”. As a result, title is a major negotiation point in recruiting. This also extends to corporate compensation packages, beyond salary. Sometimes, Korean executives pay more attention to company perks that are associated with title than actual pay. For example, a corporate car and a driver, as well as golf memberships, are important in decisions to change jobs. Beware of the status maintenance cost” of executives when structuring a compensation package.

Perhaps one of the most fundamental concepts that underlie Korean society is the relative relationship among individuals. Individuals can always be identified by region and school, and even ancestry, based on their family name. Such strong societal ties make them bonded to their communities, which extends to a sense of obligation to the organisations for whom these individuals work.

Given such a rigid societal status, everybody has a relative rank in society. Therefore, getting interviewed by a junior person (defined as age, school affiliation and organisation) is a foreign concept and few Korean-born executives handle the situation well. Conversely, such rigidity can be used to restructure an organisation in an accepted and understood manner, if one feels that the current organisation requires a major restructuring.

Against this background, foreign companies looking for talent in South Korea should try to be more discerning in their selection criteria and not be too judgemental. With time, of course, Korean corporations — owing to increasing global competition and the shifting needs of the economy — will move towards globally accepted business practices.

It is already happening with the younger generation, who are more receptive to Western styles and do not conform to rigid Confucian principles. Most of the new breed of young Koreans who have been educated abroad, are posing a serious challenge to the old management practices. This is an encouraging trend that is slowly transforming old Korean ways of thinking.

Yet, while corporate Korea is becoming more Westernised, a sweeping shift in mindset is not going to happen overnight. At the end of the day, South Korea is still a closed society. For outsiders looking in, however, the picture will be clearer if they do not view its society through a Western lens.

The value system set by Confucianism will continue to dominate business practices in Korea for some time to come. Companies conducting business in Korea need to have a better understanding of such cultural nuances in order to operate successfully.

Source: Asia Inc. magazine - GAI

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