Korea global business expert Don Southerton has released his latest new publication, an eBook titled Korea Facing: Secrets for Success in Korean Global Business.
Southerton notes: ‘With ever-growing number of people employed by Korean-based companies outside of South Korea, this book will provide western teams and management with a strategy and skills to succeed.’ Topics covered in the ebook include working with Korean expatriates, managing business partnership expectations, and understanding the Korean decision making and thought process.
You’ve coined the term ‘Korea Facing’ as part of your global strategy. What would you say are the biggest obstacles that Korean and Western companies face when doing business?
The greatest challenge for Korean companies expanding globally is staffing the overseas operations with expat (ju jae won) teams that can quickly understand and then adapt to the local market and business culture.
For Western companies looking to do business with Korean firms, the Western teams need to understand that corporate cultures and norms varies across Korean firms–some very progressive and global, others more rigidly following older Korean business practices. No two Korean companies are alike.
A lot of foreign companies have been withdrawing from Korea of late, citing ‘streamlining operations’ or to focus on other markets. Do you feel this is more due to the culture of the Korean market, or have these companies just failed to adapt to local consumer tastes?
Failing to adapt is an issue, but more so it’s the highly competitive market–probably more than many foreign companies first realized. Competitive pricing drives much in the Korean market, so a firm needs to instead focus on quality and uniqueness–hence Costco’s and Starbucks success.
Korea has sometimes been accused of one-way globalization — i.e. heavily exporting its cultural entertainment and manufacturing — but placing many restrictions or regulations on foreign companies who do business here. Do you think that will end up hurting Korea in the long run?
With the growing number of FTA’s and incentives for foreign investment in Korea, I see this as less of an issue. It’s more the stigmas that barriers exist that make entering the Korean market a challenge. Again, I see the reality is that it’s a highly competitive market.
In your book, you mentioned how large Chaebol’s have a hierarchical top-down management style. Do you think that the changes in young Koreans thinking to becoming more individual will help innovation within these companies, and with the emergence of more local start-up companies?
Change within the large Chaebol comes slow. We see younger Koreans, especially those educated abroad, migrating to smaller startup companies where they have more input and opportunity. An interesting trend is that some younger Koreans begin careers at a Chaebol, but after a few years jump ship to smaller and more progressive companies.
In your opinion, what has been the biggest problem that Korean companies face when trying to go global?
Going ‘global’ requires staffing the overseas operations with both Korean expats and local teams. The Koreans assigned must adapt to local business procedures, while the local westerners hired must become aware of the norms and practices of the Korean headquarters and operations. Expecting this to happen without training and coaching is like throwing someone into water and expecting them to swim. Both teams need support and training. This has been much of my focus training, coaching, and educating both Korean and local teams.
What is the biggest obstacle for foreign companies when trying to enter the Korean market?
I feel it’s critical a western company partner with a Korean company if they want to successfully enter the 2013 Korea market. Going it alone can be done, but it’s very costly in time and money. The obstacle then becomes finding the right partner. I spend considerable time matching western and Korean firms.
What are the most difficult situations you encountered in dealing with a company and how do these situations get resolved?
Managing expectations between Korean and western partners continues to be a major issue I encounter and deal with constantly. Most often the plans will change over time. Terms originally agreed upon and based on a set of expectations need to modified–with one side unwilling, or unable due to costs, bend. In the best cases, early on I try to build a collaborative relationship, where both sides work together.
The eBook is available through iBook, Kindle, Nook, and Amazon.
With over 35 years experience, Don Southerton is the definitive authority on Korean-facing global business and branding–from automotive, golf, and QSR/food sectors to New Urbanism and Green technology. Southerton extensively writes and comments on modern Korean business culture and its impact on global organizations at his website bridgingculturekorea.