Corporate Culture of Korean Business

Transcription

1 Corporate Culture of Korean Business Xiaohui Zhang Yew Kok Poong Supervisor: Ms. Lan Qiu

2 Introduction Culture is a set of values, beliefs, and habits that are shared by the people in a society or nation, influencing their attitudes and behaviors. Corporate culture is a set of values, beliefs, and attitudes that is shared by people in an organization within the national culture. Corporate culture affects the organizational performance. Review on national culture, corporate culture, and managerial practices and employee behavior.

3 Traditional National Culture Confucianism dominant influence on Korean culture. Ethical codes emphasize heavily on harmony, education, and human relationships in vertical hierarchical order. Family values extended family, paternalism, blood based succession, and gender roles. Yon-go relations relation-based behavior, sense of belongingness and trust.

4 Changing National Culture Emerging Korean national culture: Changing Family Values Changing Gender Roles Changing Yon-go Relations Ability-based Career Success

5 Changing National Culture Changing family values Preference towards nuclear family over extended family. Ancestor worship, respect for elders and importance of harmony are less prevalent. Paternalistic authoritarianism is being questioned. No longer command obedience without legitimate causes.

6 Changing National Culture Results of a survey conducted at the Tonyang Nylon Company (TNC) on preference between nuclear family and extended family: 100% 80% Sample Size: 300 Manager: 100 Production Worker: % 40% 20% Manager Production Worker 0% Employees who preferred nuclear family

7 Changing National Culture Results of a survey conducted at TNC on workers opinion on obligation to comply with the personal demands of their supervisors, and their willingness to follow the opinions of their elders: 60% 50% 40% 30% 20% Agreed Disagreed No Opinion 10% 0% Obligation to comply with personal demands of supervisors Willingness to follow the opinions of their elders

8 Changing National Culture Changing Gender Roles There are increasing job opportunities for woman but is still relatively limited. Dominance of chauvinistic culture still prevails. Attitude of women toward work, lacking of commitment to their job. Gradual increasing acceptance of women as managers.

9 Changing National Culture Results of a survey conducted at Tonyang Nylon Company (TNC) on workers willingness to accept a woman superior: 40% 35% 30% 25% 20% 15% Manager Worker 10% 5% 0% Willing Unwilling No Opinion

10 Changing National Culture Results of a survey conducted at Korean Chamber of Commerce and Industry (KCCI) on opinion of workers if women should work if they are able to find a job, and if they mind working for a woman superior: 100% 80% 60% 40% 20% 0% 64% Women should work if they can 75% Do not mind working for a woman superior Employee

11 Changing National Culture Changing Yon-go Relations Still strong but is questioned, generally reject the practice but can tolerate it. Korean chaebols make effort to avoid relationbased managerial practices. Individual ability, effort, and interpersonal competence are becoming more important in determining one s career success.

12 Changing National Culture Ability-based Career Success The importance of education is not as strong as it used to be. Managers and workers consider that individual attributes are more important. University students still think that the yon-go relationship to be the most important factor.

13 Changing National Culture Results of a survey conducted at TNC on employees opinion on the importance of education in determining the success of one s career: 60% 50% 40% 30% 20% Agreed Disagreed Lukewarm Attitude 10% 0% TNC Employees' Opinion on the Importance of Education for Career Success

14 Changing National Culture Results of a survey conducted at KCCI on employees opinion on the importance of education in determining the success of one s career: 80% 70% 60% 50% 40% 30% 20% 10% 0% KCCI Employees' Opinion on the Importance of Education for Career Success Agreed Disagreed/Luke warm Attitude

15 Changing National Culture Results of a survey conducted at a major university on the opinion of students about the most important factors to career success: 50% Sample Size: % 30% 20% Yon-go Relationship Individual Ability Education 10% 0% Students' Opinion on The Most Important Factor for Career Success

16 Value Systems of Korean Workers Employee attitudes and value systems: Concept of Work and Work Ethics Attitudes Toward Company Employee Loyalty and Commitment Group Norms and Conformity

17 Value Systems of Korean Workers Concept of Work and Work Ethics Motivation for hard work declined while desire for leisure increased. 3-D (dirty, dangerous and difficult) syndrome is prevailing. Working hours are also being adjusted to better suit workers personal lives. Manufacturing jobs has lost their appeal and have been replaced with jobs in service organizations and financial institutions.

18 Value Systems of Korean Workers Attitudes Toward Company Generally workers closely identify with their company. Very high numbers of worker perceive their workplace as a second home. This tendency merely came from the traditional Confucian concept of the extended family. The bond is essentially weakening in recent decades.

19 Value Systems of Korean Workers Employee Loyalty and Commitment Contrasting to their attitudes toward company, their loyalty and life-time commitment to their company is less strong than in the past. The reluctance to sacrifice for the company was greater among production workers than among managers. Lack of loyalty and commitment are more prevalent among younger workers than among elders.

20 Value Systems of Korean Workers Results of a survey conducted at TNC showing the employees willingness to sacrifice their personal life for the company: 70% 60% 50% 40% 30% Manager Worker 20% 10% 0% Willing Unwilling

21 Value Systems of Korean Workers Group Norms and Conformity Mostly are willing to comply with group decisions even though they might not agree with it. They are oriented toward a salad bowl type of group, in which each of the group members shows their own identity. Individual members seek their own interests in the absence of a clear superordinate goal, leading to weaker teamwork and cooperation.

22 Corporate Culture: Shared Values What is Sahoon? A sahoon could be a company motto, slogan, management ideology or core value and beliefs. In many Korean firms, the sahoon reflects the personal values, beliefs and philosophies of their founders. It serves as a general guide for company management and a guiding spirit for employee behaviors.

23 Sahoon in Korean Firms Chaebol Samsung Hyundai Daewoo Sunkyong Hanwha LG Shared Values or Official Sahoon Respect for individual, pursuit of technology and empowerment Diligence, thriftiness, trust and affection Creativity, challenge and sacrifice Humanism, rationalism Trust, credibility, modesty and excellence Value creation for customers, respect for individual and empowerment

24 Common characteristics of Sahoon in Korean Corporations It reflects the personal values, beliefs and philosophies of the founder or his successors. The values expressed in a sahoon are generally congruent with the values of the national culture.

25 Management Style Management by Owner-Manager In Western societies As business firm grows, ownership and management are separated, and the management is left to professional managers In Korean chaebols The founders and their families are directly involved with day-to-day managerial responsibilities

26 Centralized Managerial Structure Description: One of the most striking features of Korean organizations is the high degree of centralization and formalization of their managerial practices. The degree of concentration of authority among owner-managers varies from firm to firm. Major decisions, especially those requiring expenditures, usually go through formal procedures of kyul-jae, meaning the approval from upper levels of management. Effect: Along with vertical and hierarchical control, Korean firms generally emphasize strong functional control, such as planning, finance, and personnel.

27 Informal Power Groups Tobagi Managers Tobagi literally means a native or a long career employee who joined the company through open competition hiring and has stayed with the company for a long time. Yon-go Relationships Owners bring in their school friends or home-town friends to management position in addition to bringing in their close family relatives Such relations affect employees social interactions and personnel decisions and often result in nepotism and favoritism in many Korean organization.

28 Leadership and Communication Authoritarian Authoritarian leadership is an expected managerial behavior in a hierarchy-based Confucian culture. It s further enhanced by the centralized managerial structure found in Korean firms. Korean firms usually do not have formal job description or job specifications. Work assignments and individual responsibilities are largely determined by supervisors. As most critical decisions are made at the top,top management must possess technical as well as interpersonal competency to get the job done. Thus a bureaucratic organization, characterized by centralization and functionalization, requires exceptional leadership.

29 Communication The passive attitude of Korean employees doesn t mean their unquestioned acceptance of authoritarian leadership. In fact, they prefer leader who take a consultative approach. Example research at TNC: 71% of the employees prefer a consultative leader, while 29% show preference for a task-oriented leader initiating structure. Today: Since authoritarian and consultative styles of leadership are basically incompatible, Korean managers have to change their consultative. It becomes a kind of trend.

30 Organizational Communications Some common characteristics Communications in Korean firms tend to be Top-Down. Vertical communication involves superiors issuing directives and subordinates implementing them. Open communication and debate hierarchical levels does not exist in Korean firms. The lack of specificities in communications and the perceived psychological distance between superiors and subordinates should have contributed to poor communications in Korean firms Modern communication technologies have brought about many changes in organizational communications in Korean firms.many routine face-to-face communications have been replaced by modern communication devices.

31 Summary Confucian-based culture has influenced the formation of corporate culture in Korean firms, creating harmonious work groups while suppressing individualism. The co-existence of Confucian and Western cultures weakens traditional Confucianism and brings forth newly emerging values of individualism and democracy. Most Korean seem to accept yon-go relations, but they recognize the importance of individual ability as career success factor. The authoritarian leadership style of Korean managers is being replaced by more of consultative and participatory one.

32 Thank You!