With a 5000 year old history and sporting the forth largest economy in Asia with over $1.130 trillion USD GDP in 2012, Korea has emerged as a global power-house on the world’s stage. Bordered by China to the west and Japan to the east, forming the BESETO triangle, (Beijing-Seoul-Tokyo), Korea is within a one hour flight making it an ideal location for Asia based operations for conducting business in Northeast Asia and throughout the region.
Korea has risen from the ashes of a emerging & developing country ravaged by war to an economically stable and formidable opponent in the global market. From the development of its own language, to advancements in the semiconductor, shipbuilding and steel manufacturing industries, Korea has proven that the country and its people can endure, prosper and compete with other highly developed nations.
Koreans are outgoing, open-minded with a strong business mind-set. Unlike many other Asian nations, there are no unanswered questions when doing business with Koreans as they are straight-forward, resourceful and aggressive in their business dealings. However, under that stern exterior lies at the heart of the Korean people a society that is deeply caring & has concern for others, rapidly adapting and inclusive of multi-culture changes within its borders and have respect and devotion to their motherland.
The center of every Korean’s life revolves around ones company and family where it is not uncommon for several generations to belong to the same household. Koreans have a high respect for their elders both past and present and annually make a pilgrimage to their hometowns to pay honor to their ancestors. In business it is not uncommon for Korean’s to arrive early and work late into the evening putting in an average of 2,193 working hours annually, making Korea ranked in the top two of OECD membership countries.
As a member of the Group of Twenty and Central Bank Governors, the International Monetary Fund, the United Nations, World Trade Organization and other internationally recognized finance, health, trade and other specific organizations, Korea has risen to the ranks of the elite group of economically leading countries around the world.
South Korea, which is a little larger in land mass than the state of Indiana, USA boast a population of around 50 million people. One half or about 25 million are residents of Seoul, the capitol of Korea and its metropolitan area. With a highly attentive and actively involved government, Korea has emerged and preserved as a vibrant global power-house though the recent global economic instabilities relatively unscathed.
The Korean government has pledge financial support in the areas of energy; especially Green Growth focused companies, pharmaceutical, nanotechnology and biotechnology areas as well as many other industries centering on R&D in their respective industries.
The ITU, which is a United Nations agency, recently released its annual Global ICT – Information and Communication Technology report titled Measuring the Information Society 2011 where South Korea was ranked No. 1 globally for its advancements in information technology and related industries.
South Korea is home to some of the world’s top global companies such as Samsung Group, LG Electronics, SK Group, Hyundai & Kia, POSCO, STX Group and many other globally recognized industry leading companies. These companies, have gained international recognition and ranking in a relative short period of time, reaching global success in the last few years.
What industries are booming in Korea? In short we would say all industries are booming. However, there is specific growth in advanced technologies including, semiconductor wafer R&D as well as solar cell related activities. Korea is leading the way in LED Display technology, automotive and energy producing industries inclusive of solar, wind, biogas, nuclear and other forms of natural resources development domestically and throughout global locations.
The consumer, retail and hospitality industries are gaining momentum as it is well-known in the industry that based on the buying power and social network of Koreans, if your product is successful in Korea it will be successful anywhere else in the world. Recently, the city of PyeongChang, Korea was awarded the host of the 2018 Winter Olympics. Their goal is to make South Korea the winter sports destination of Asia; not only for the games but the future of the area. There are many retail and hospitality opportunities sure to come out of this prestigious event.
Korea is home to over 2000 pharmaceutical and biotechnology / equipment related companies both domestic and foreign company based. Korea has adopted the Bio-Vision 2016 plan which outlines Korea’s objective to build a biotech economy within 10 years which will raise Korea’s global standing from 14th to 7th in world biotechnology rankings.
As a major player in the financial services industry, Seoul, Korea has been ranked in the top 10 of the most economically powerful cities in the world tied with Washington D.C. With a current economic output of over $1.130 trillion USD, Seoul is emerging as the new financial hub for Northeast Asia. In 2010, the World Federation of Exchanges report, ranked Korea first in number of Stock Index Options and fifth in Exchanges of Single Stock Futures and showed a 30% increase in Domestic Market Capitalization as compared to 2009. With the construction of the Seoul International Financial Center well under way, the city hopes to attract foreign investors to form a financial cluster to continue the growth in private equity, investments, insurance and other finance related services.
Korea, once viewed as an emerging and developing country, has now been recognized by multi-national companies has the place to base their research & development resources especially in the advanced technology related industry. The talent pool is highly educated, valued and leads the way in cutting-edge technology.
Multi-national companies are recognizing the need to diversify their current Korea based operations justifying the expansion to incorporate advancements in the areas of semiconductor and solar cell related research, development and manufacturing; government backed nano- and biotechnology exploration as well as diversifying their Korean portfolio to include private equity, insurance, re-insurance and commercial banking locations.
Executive leadership must also be diversified by localizing the hiring and retention of leading experts and professionals in the respective industry. Gone are the days when foreigners with industry expertise could come to Korea and rely solely on their experience to lead the Korea operations. Informed multi-national companies recognize the importance of locating top Korean talent; not only to lead the organization in Korea but to also fulfill placement in regional and headquarter based executive positions of the company.
Multi-national companies are realizing the importance of establishing a local presence directly in the Korean market and not relying only distributor or channel sales to increase their market share. Personal relationships are highly valued not only socially but in business as well and a well-informed company will create a value added revenue generating operation by establishing a local presence in Korea. As more Koreans and their companies develop their international market share the need for global partnerships become very important for success.
For successful Korea-based executives to survive and prosper in the Korean market place, the need to develop, propagate and hone their interpersonal skills by understanding that Korea’s business decisions are not finite based on any contractual documentation but rather on the relationship that develops between Korea-based executives and their Korean counterparts. This means that foreign executives must make themselves aware of the business and social culture of Korea, its history and the trials and tribulations that the county and its people have endured and the future growth initiatives adopted by Koreans to become one of the top global economically sound countries in the world.
Humility is considered an in-born trait and a value that is highly revered and appreciated in the Korean culture. In a culture that values age and wisdom over direct experience, the informed foreign executive will have an inept respect while not loosing objectivity in business development but being able to show some flexibility in these developments. Koreans have the “Korean way” of conducting business and it is the foreign executive who allows and adapts to this style to be successful in the Korean market place. Many foreigners have come to Korea with the idea of “changing” and “teaching Koreans how business is done.” Many have failed and most have returned to their home countries unable to break the traditional mind-set of Korean companies.
However, there are signs that this “Korean way of doing business” is changing. Under the leadership and by example some of the larger Korean companies are adopting the western style of doing business such as becoming less hierarchical in structure and using western style position titles, gender-based issues are becoming less of a problem and women are seeing an increase in roles & responsibilities and Korea companies are recruiting more foreign industry experts to join their headquarter and local operations. They call this “glocalization” localizing global operations based on country location and specifics.
A highly desirable and sought after skill, for the most successful Korea-based executive is the ability to communicate in Korean. Having Korean language skills will not only open the door for better communication in staff leadership, business development and understanding the “Korean way” but will also improve the foreign Korea-based executive’s quality of life while in Korea.
First and foremost the biggest challenge for foreign based companies in recruiting leaders in Korea is communication. Although most Koreans have a high level ability to communicate in English, some companies are looking for native fluency. There are many Koreans who do have a high level of English communication skills, were educated in the USA or abroad and have developed themselves as global citizens. However, for a foreign company to require near perfect English communication skills is unrealistic. Some leeway, understanding and sensitivity must be present in recruiting not only Koreans but all across Asia.
In the area of remuneration, many foreign based companies have the notion that Korea is still developing and emerging therefore the salary level is much lower than say other Asian countries. That notion is far from the truth as Koreans who are recognized as global leaders, professional experts in their respective fields and experienced in leading multi-national and/or Korean companies are highly sought after talent and the competition for these individuals is fierce.
An obstacle that a foreign based company must realize is company loyalty from the employee as well as the company itself. Experienced Korean candidates who are working for large Korean companies are very reluctant to resign from their current employer to join a multi-national company without some sort of employment guarantee. The trend now is to hire Koreans to become full-time, permanent employees of the foreign based company and their current work location is Korea with a prevision that if the company fails in this market that there will be other opportunities for employee transfer even if relocation to another country is required.
Many foreign companies have rescinded their Korean operations leaving countless unemployed Korean staff disgruntled and leery to join multi-national companies. In order to attract and retain top talent in Korea many companies are increasing the employee’s salary level, incentive ratio, bonus and other benefit package plans including stock options, education subsidies, furnished automobiles and allowances to name a few.
Lastly, the cultural differences between Korean and multi-national companies is a positive aspect for multi-national company recruitment because Koreans who have experience working in MNCs, have lived, studied or worked abroad and/or have developed into a global citizen workforce, embrace the western company culture including working hours, position titles and non-hierarchical performance and evaluation based promotions and career advancement.
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William D. Sisson is an Executive Search Consultant. He has been working in Korea for the past 7 years. Connect with him at kr.linkedin.com/in/williamsisson/.
Note: The views, services and experiences expressed in this Featured Post are solely those of the contributor.