I have a long history as a trusted advisor offering Korean business strategy and consulting services to firms across the globe. This includes major Korean groups, international brands, and government agencies.
Many see me as the “go-to” expert on all Korean business matters.
Have a Korea-facing question, issue, or project. Let’s talk.
Don Southerton
dsoutherton@bridgingculture.com
+1-310-866-3777
It is no small effort to stay current on key issues with the many moving parts within a Korean Group and with Korea in general.
Knowing there are gaps in communications, I do my best to keep teams and leadership updated. I’d like to share some thoughts ….
From time to time, there are concerns in the overseas workplace over communications.
This can range from a perception of disconnect and being the last to know as global announcements are made or finding out important news second-hand.
This information gap can include working teams but is also felt by local leadership.
Team members may even feel that information was being deliberately withheld.
While there may be some truth in the disconnection, the feeling that Koreans are withholding information deliberately is most often not reality. What may be a surprise for Western overseas teams is that Korean staff in their home offices must make quite an effort to stay informed.
As one entry-level employee of a major Korean group lamented,
“If I did not spend an hour daily networking with fellow workers, I would be in the dark on issues major and minor that could have a significant impact on my work assignment and projects.”
For my work with Korea-based companies, nightly chats, frequent emails, and Kakao texts are required, or I too, would be “in the dark.” Still, I often find breaking news issues when checking my Kakao or running an early AM Google search. It is common when I ask a Korean colleague and even leadership on the news, their response is one of surprise—not in me asking, but this may be the first they had heard about, too.
This implies that silos within the company limit the sharing of information. More so, those not well connected are out of the loop or rarely given an advance heads up.
I find it interesting that colleagues within a company often remark and see me as well-connected—a very positive trait. As a caveat, teams try to keep their trusted friends, colleagues, and management well informed—even on sensitive and confidential issues. Savvy management continually seeks news on issues, projects, and forthcoming announcements from their colleagues and networks. This is not only to stay informed but to avoid being caught off guard or blindsided.
This network can play a critical role in one’s career and advancement. That said, for most Koreans facing international operations, the communication channel—informal and formal—between the Korean HQ and local subsidiaries is through expatriates.(The same goes for Western companies located in Korea, as Westerners there serve as expats.)
Roles vary within each company, but most frequently with Korean global business an expat’s primary role is to be the liaison between Korea and the local subsidiary.
Frankly, some expats are more open to sharing information than others.
Regardless, I feel this is less a deliberate withholding of news than a “filtering”—that is, a review of communications from the mother company and then a doling out of appropriate information. Filtering becomes an issue when information is withheld until the last moment, whether for clarity, to avoid confrontation, or to decide to best address a delicate situation.
Delaying communication often forces local operations to drop everything and deal with an issue that would have been less demanding and disruptive for the teams if conveyed promptly. In other situations, I found that information is often held back until a 100% certainty is reached on an outcome or upcoming event.
What appears to be silence on important news is often an attempt based on their years of experience working with the mother company to spare local teams from concerns that could and probably would change over time.
So instead of constantly having to return to the local team with a shift in plans, an expat may stay quiet until the last moment and have a firm confirmation.
This can mean little advance notification, as it is common for announcements first to need legal, PR, and then leadership’s “final” approval.
Workarounds
There are workarounds, and one needs to recognize that much is strongly rooted in a company’s culture. Culture matters.
For starters, my best practices include: 1) Building a strong professional network—including colleagues local and overseas. Have set times to chat even nightly with Korea… I suggest by Kakao.
2) Maintain a reputation as one who can share and be shared information—with a high degree of trust and confidentiality when appropriate
All said, outside issues deemed as private, sensitive, and confidential, few will dispute the need for strong internal communications and updates—shared across the organization. Here as always.
If you have a question or inquiry on this topic or another, let’s set a time to chat.
I’m also available by Kakao at 310-866-3777 and Don Southerton, so join me…
(Kakaotalk is free, and best to download the app on your phone and access it).
Don
Just us in Part 2 of Korea’s Money Today’s interview with Dr. Peter Wonsok Yun, Commissioner of the Incheon Free Economic Zone Authority, and his Q and A.
I provided the translation and editorial review. Please check it out. Few grasp global developments as well as Dr. Yun.
Dr. Wonsok Yun, Commissioner of Incheon Free Economic Zone Authority,
(Photo provided by Incheon Free Economic Zone Authority)
The following is a Money Today Q&A with Commissioner Yun. In Part 2 of the interview, Dr. Yun shared his insights, thoughts, and plans.
Q. Please briefly explain IFEZ
IFEZ was designated “Korea’s first free economic zone” on August 11, 2003. At the time, no one could have imagined reclaiming the desolate West Sea mudflats and turning them into a global city.
Over the past 20 years, IFEZ has successfully transformed ‘Songdo, Yeongjong, and Cheongna’ into international cities with exceptional innovation and lifestyle.
Above all, we are proud of what we have achieved — our original goal of ‘attracting foreign investment’.
Last year, the environment for attracting domestic and foreign investment contracted due to the war between Russia and Ukraine, but we achieved $432 million in FDI, a 10.7% increase compared to 2022.
Large multinational corporations and research institutions were established, fostering a global startup ecosystem where international talents, including overseas Koreans, congregate and collaborate.
The role of IFEZ is crucial for the success of Incheon City’s 8th popularly elected core policies, ‘Global Top 10 Cities (New Hong Kong City)’ and ‘Jemulporn Renaissance’.
It is now time to lay the foundation for long-term, sustainable growth in the future.
Q. What needs to change to lay the foundation for sustainable growth?
So far, IFEZ has adopted the ‘linked development’ approach, which involves constructing profit-making facilities alongside public facilities. The profits generated from the development and land for private apartments and businesses have been channeled for public facilities such as parks and social infrastructure (SOC) for the city.
Significant progress has been achieved in developing infrastructure for smart and international cities through this interconnected method. However, the development is highly residential, which limits its ability to attract domestic and foreign companies for business and job creation.
Now that IFEZ is 20 years old, we aim to develop a new model that integrates linked development and investment attraction.
We will attract strategic industries to fulfill the core function of the free economic zone as a ‘global business hub’ and to advance in name and reality.
We need to provide a driving force for new industries, such as start-ups, and foster the AI industry.
Q. The target for foreign investment attraction this year is set at $600 million. What is the strategy?
This year, we plan to expand our strategy to attract “global IR companies” and bring in more cutting-edge companies.
In addition, we will achieve this year’s target of $600 million by establishing a ‘Day Station Incheon Strategy’ where companies gather in Incheon.
We will take the lead in balancing development within the existing industrial complexes in the original city center of Incheon. To this end, we plan to strengthen our network by collaborating with the Korea Trade-Investment Promotion Agency (KOTRA) and the World Federation of Overseas Korean Traders Associations (World OKTA).
During the first half of this year, we are putting every effort into our high-tech industrial complex strategy in the bio-pharma sector.
We believe that Songdo, which already possesses world-class biopharmaceutical production capabilities, is the perfect match.
We are putting our efforts into attracting a bio-specialized complex to build a ‘Bio-Triangle’ connecting the Songdo-Namdong-Yeongjong region.
As the companies in Songdo possess advanced strategic biotechnologies, as noted by the Ministry of Trade, Industry, and Energy, I believe it is the most suitable region for the government’s industrial development.
Q. Why are you pursuing additional FEZ lands, including the southern end of Ganghwa and Incheon Inner Port?
Twenty years have passed since IFEZ was launched. As we enter maturity, investment demand is increasing, but available land is in short supply.
For a specialized bio hub complex to be constructed within IFEZ, like Songdo, additional land must be made accessible.
Currently, IFEZ’s development rate exceeds 90%. There is a lack of space to attract the four major high-tech industries that Incheon pursues.
In many cases, other countries and their competitive cities have available land and rival clusters. IFEZ must also be able to compete in high-tech industries, future mobility, cultural tourism, green bio, and smart cities. To achieve this, additional FEZ designation is essential.
Q. A red light has been turned on for large-scale projects that have stalled, including the Golden Terra City (formerly Midan City) casino project. How are you going to solve it?
I am aware of the concerns shared by the residents of Incheon. We are focusing our efforts on getting things back to normal.
Last March, the Ministry of Culture, Tourism and Sports did not extend the casino project development period applied for by RFKR, the Korean subsidiary of China’s Furi Group, the operator of the Midan City complex resort.
We will seek to develop alternatives to meet the expectations of residents.
In addition, the ‘Icore City Project’, which involves constructing landmark buildings in Zones 6 and 8 of Songdo and has been in consideration for 17 years since announced in 2006, has seen repeated delays. These delays have been due to financial crises, changes in local governments, and the ups and downs of the global economy.
We are currently discussing options and plans to resolve, for example, the height restriction issue with the relevant ministries.
Q. Inaugurated as the 8th Commissioner of IFEZ last February, what activities have you undertaken since taking office, and what kind of organization are you aiming to create in the future?
First, for over a month since taking office, I have spent my time reviewing major work in progress, and visiting the central Incheon City ministries, business sites, and related organizations. I have dedicated considerable time to communicating with shareholders to understand the current business issues better.
Internally, we are promoting the establishment of the ‘IFEZ Vision and Strategy 2040 Project’ that will drive future leaps forward.
We will, too, strive to create a productive and happy IFEZ organizational culture.
In the future, the goal is to make IFEZ a world-class global city that surpasses Dubai and Hong Kong. To this end, we will do our best to attract corporate investment, for example, by conducting ‘visiting investment IR’.
In addition, we will increase the city’s competitiveness so that IFEZ becomes a top free economic zone, creates good jobs, revitalizes the local economy, and serves as a model for a new growth engine for our country.
Born in Chungcheongnam-do in 1960.
Graduated from Sungkyunkwan University, English Language and Literature, a Master’s degree from Seoul National University Graduate School, and a Doctor of Business Administration, from Sungkyunkwan University Graduate School.
Director of Economic and Trade Cooperation Division, Korea Trade-Investment Promotion Agency (KOTRA)
CEO, International Business, Hangul and Computer Group
Chairman of Global Industrial Competitiveness Forum
This article was originally published in the Korean language in the June issue of Leader’s Money Today, a legislative affairs magazine. Sang-gu Yoon, head of Incheon headquarters, Reporter Se-mi Hong.
The article has been translated and edited by Don Southerton. Dsoutherton@bridgingculture.com
I enjoy sharing Korean business insights. This insight is one of my most popular.
I often say “Similar brings us together…”
Global business requires colleagues of different cultures to work together daily.
How we perceive each other culturally is often based on differences, such as language, and similarities, like shared values such as family. I prefer to concentrate on the similarities, as differences can create distance while similarities unite us.
It is crucial for Western teams collaborating with Korean operations to gain a deep understanding of the workplace culture in Korea, including the 2024 norms, practices, and daily life. The workplace is under constant change, and we can easily fixate on things that may have been distorted by hearsay or a lack of understanding.
The same principle applies to Korean global teams assigned to support overseas operations. We all need to become learners, adept in local and overseas practices. Expecting global teams to conform to Korean business norms rarely works; it often leads to delays and stalled projects.
As I noted above, recognizing similarities is one of the most powerful cross-cultural bridges. In other words, how can you relate to the nuances in communications and day-to-day life? This requires identifying the local beliefs, values, expectations, traditions, and culture
The information provided helps us gain a deeper understanding of how our teams think and what they expect.
Outcomes
Although there is bound to be friction between home and host country cultural values, a successful model accomplishes…
1. Awareness and appreciation of the home and host country with the ability to gain insight into one’s personal traits, strengths, weaknesses, attitudes, and interests.
2. Realization of shared cross-cultural values, along with an awareness of and respect for cultural differences.
Call to Action
Are you dealing with Korea-facing issues, challenges, or impasses? I provide workarounds and solutions.
Don Southerton, Korean Business Thought Leader
As a trusted friend constantly reminds me, “Don, no one does what you do.”
I strive to ensure success and sustainability in dealing with Korea-facing business partnerships through well-communicated expectations and cross-cultural understanding.
It also requires a unique skill set—groomed over decades of working with an ever-changing Korea.
I like the story that shortly after an engineer retires, a machine at his former factory stops working. They try everything they can do to fix it, to no avail. Finally, the boss calls up the engineer and asks him to come in and fix it.
The engineer agrees to do so as a paid consultant. He comes in, walks around the machine, looks at a few things, takes out a hammer, and whacks the machine. It whirrs into life.
The engineer presents his former boss with a bill for $5,000. The boss says, “This is ridiculous! What did you even do? I need an itemized bill.”
The engineer provides a new invoice that states:
· Hitting machine with a hammer: $5.00
· Knowing where to hit the machine: $4,995
Nuff said…
My work is knowing when and where to use the ‘hammer’, catching issues early, and then as needed providing work-throughs as projects can so easily get sidetracked. Many assume when initial talks and progress seem smooth things will continue to move forward—which is rarely the case.
It’s one thing, too, for those well-experienced in global business who are now engaged in Korean projects to expect experience in the West will be enough to work through what can be escalating challenges—but in fact, what many will find out is that they are poorly suited to adapting and being flexible (a very Korea business approach and norm).
At the very least, working through issues can become a lengthy learning process. Both ways are time-consuming and costly.
My long-time approach when providing work-throughs is to step back and look for underlying concerns and nuances that are easily missed. Then knowing the Korean processes and mindset work for a resolution. Again, this is more art than science.
To summarize, impasses are common in all business—but what may work in the West to overcome issues will take a different approach in Korea.
The best model is to be constantly aware and sensitive to what may unfold. Use less direct and non-confrontational ways to gain deeper insights into any challenges and be open to alternative approaches at work-throughs.
As always, I look forward to discussing any challenges, and any questions you may have.
I’ll have my hammer ready, too. And here, ready for your call or email.
Don Southerton Thought Leader
Do you have a Korean business or cultural question?
Let’s talk. This is an opportunity to discuss over the phone, or through video chat on a pressing Korean business or cultural question.
Always confidential.
Email dsoutherton@bridgingculture.com to set the time. Text or call 310-866-3777.
Looking forward to talking.
Never an obligation. No strings attached 🙂
Don
Expanding internationally offers numerous benefits such as access to new markets, customers, workforce, and improved reputation.
I am a strong advocate of global business, as it presents great opportunities. I am also deeply passionate about seeing brands succeed in overseas markets.
Expanding internationally offers numerous benefits such as access to new markets, customers, workforce, and improved reputation. As Wharton Magazine noted, “…expansion provides diversification and additional revenue, it also exposes one to different methods of doing business.”
Frankly, my experience is that global companies looking at market entry for Asia-Pacific countries like Korea, Singapore, the Philippines, or Vietnam, should recognize the potential upfront investment required to enter a new market. Best practices require a company to invest time and resources in “Discovery” and hire a qualified expert or firm to assist in the local mark
It is also common for local entrepreneurs to approach global brands with the hope of securing a memorandum of understanding (MOU) to bring a popular brand to their market. However, these entrepreneurs may not currently have the necessary resources and means to operate the brand. They intend to get the MOU, and then pitch the deal to local business partners.
Sadly, we’ve seen over the years even seasoned international companies realize too late that their well-intentioned partnership was less than qualified. The deal, then, stalled or ended.
Qualifying a local partner can be a challenge, as it requires deeper insights into the local market and identifying key players.
As a benchmark based on recent projects this cost is easily a minimum of US $20,000- $50,000 in international travel and legal fees to secure a partnership. There are, of course, additional costs after an agreement is signed.
There are methods to offset these development costs, which include joint ventures and licensing. Also, a best practice is to ensure you are working with a market entry firm that can
In contrast, I have seen firms entering overseas markets who prefer to take a different, more reserved approach and go it alone with their internal staffing. Sadly, the success rate for an international firm successfully entering a new overseas market is poor— or more costly than expected, even with the support of highly dedicated government agencies for local market entry.
To elaborate more, some businesses want to focus on finding a solid, committed overseas partner or client with little investment and need to pay upfront fees to engage a local expert in a market entry — all compensation is contingent upon first finding a potential partner. This rarely (code word–never!) works.
More to the point, a highly qualified market entry firm that has a track record of getting results will rarely shoulder the risk of funding the upfront development costs for a client. Instead, an experienced market entry firm will seek out businesses that expect success and are willing to compensate for the services.
Also, although a company going it alone may have websites, products, and company information (often in need of editing), they however lack what is commonly accepted content for meeting presentations with potential partners, including, but not limited to, a detailed localized, savvy Go to Market Plan—often a high content 20+ pages and a competitive market analysis. These expectations are not options.
And finally, for highly recognized U.S. or global brands, there is less of a barrier in setting up meetings because of the strong international desire for a top brand. For less-known brands entering an overseas market, there is considerably more effort. I most often have to rely on my credentials to begin a dialogue with a potential partner vs. the brand itself, which typically is little known outside Korea and East Asia.
All said I am a strong advocate of global business. I see a great opportunity and am passionate about seeing brands succeed overseas. However, as I have shared, this does require an upfront investment in time and resources, as well as securing local expertise. My advice, too, is to follow best practices for market entry.
Don Southerton provides strategy, consulting, and training to Korea-based global businesses. See https://www.bridgingculture.com
Why we need Korean business cultural training. My “no punches pulled” Q and A. Targeted cross-cultural support and coaching are necessary for local teams to succeed in working with overseas Korean business projects.
Q. Why do we need Korean cultural training?
A. This may be the first time working with a Korean team. This opportunity brings with it great opportunity and the need to better understand the new partner’s culture, workplace norms, and expectations.
In most cases, Western teams will interact with Korean HQ and expatriate teams. Some of the teams will hold a line managerial position with day-to-day responsibilities alongside Western managers, while others will hold key management C-level positions, such as CEO, COO, or CFO. In many, if not most, cases, these teams may operate as a “shadow management” with considerable oversight and operational control over local operations.
With the best of intentions, the Korean teams will look to build strong collaboration and teamwork and try to avoid a sense of us and them. However, they do bring Korean work norms that can conflict with Western work-life balance and Western working methods.
More so, Korean teams may make seemingly one-sided decisions with the company’s best interest in mind but without consulting local teams, causing mistrust.
A solid training and coaching program followed by ongoing support can address differences, such as sharing work styles, hierarchy, and comfort levels, plus providing workarounds.
Q. What are some typical issues that arise, especially without training or coaching?
A. As with all individuals, no two of us are alike –and the same goes for Westerners and Koreans… Each has their unique strengths, skills, experiences, and personalities.
Expecting local teams to “get it” without support and training seldom works. Even if a better understanding of the work culture eventually occurs over time, this “learn as you go” approach is costly, contributing to stress, poor productivity, and even employee turnover. Sadly, the most common mistake I see is waiting to see if tensions rise, and workers quit before acting.
Q. Can you cite an example of misunderstandings resulting in mistrust, loss of time, resources, and profits?
A. A challenge I was recently asked to address was the intervention by the expatriate partners in decisions that are best handled by local Western teams.
Probing the issue, I learned that based on extensive experience in the market and industry, the local Western management felt these decisions were often short-sighted, reactive, and not aligned with their well-thought-out strategy. Some saw it as a “cut twice, measure once” approach and “ready, fire, aim.”
Of even more significant concern were one-sided decisions not resulting from the collaboration. In any case, local management felt their input and expertise were being marginalized. As pressure to meet HQ expectations, avoid any negative news, as well as missing Sales or Production “Targets” they saw increased intervention by the expatriate teams.
In this case, I worked with the Western teams to provide some proven workarounds, particularly tempering the Korean teams’ pressing for immediate results.
Specifically, I shared ten steps.
1. To soften jumping to implement a stop-gap plan with hopes of producing immediate results, look to minimize the anxiety for both the local Korean team and the headquarters team. Please be sure to show confidence that the challenge can be overcome.
2. Acknowledge your team’s high engagement and assure the Korean teams that action will be taken promptly.
3. As a next step upon receiving a directive from Korea, have an informal discussion with local Korean teams to brief them on action steps that enable the team to work through what needs to be explored more deeply.
4. Follow up with email correspondence confirming the verbal discussion.
5. Allow a day or two for the Korean team to review your action plan. In many cases, the Korean teams are not familiar with local practices and the vocabulary used to describe Western technical nuances.
The local expat teams may also want to report back to Korea on progress. HQ leadership is ultimately responsible, so the better informed they are, the more trust they will have in local teams — Korean and Western — that the project will progress.
6. Remember that you may receive only some feedback promptly because of time differences.
7. Conducting informal daily updates to the Korean teams and sharing the steps undertaken with the local Koreans can also be helpful.
8. Even better is reporting positive accomplishments in your review process.
9. It is essential to address the potential trade-offs and risks as action steps leading to solutions and assuring the team that these steps will not impede the project and may, in fact, avoid costly setbacks.
10. Finally, having said all this, maintaining trust through strong relationships between Korean and Western local organizations is essential.
Q. What have Koreans told you about Americans? Work habits, commitment, etc.
A. If you ask Korean expats how they perceive Americans and Westerners in general, responses would be very positive and respectful, especially toward Western work ethics and work habits. Koreans see great value in American and Western teams providing them with new insights, perspectives, and best practices.
A. What might be covered in Korean business culture training?
I see the training as twofold — 1) providing teams with an understanding of the Korean partner’s affiliate company history, heritage ( challenges overcome), trends, and expectations! , and 2) sharing the Korean workplace and its norms, practices, and workarounds. One nuance I share is that Korean overseas operations can differ from those in Korea, something I am most familiar with.
Above all, a best practice is to celebrate similarities and shared values when possible, along with instilling an awareness of and respect for cultural differences.
Addressing the team’s questions and concerns is also vital with issues, such as work-life balance, safety and quality processes and procedures, and Korean partners’ overall expectations.
Q. Anything else?
A. To conclude, the need for cross-cultural training programs for local employees and management is a high priority.
The assumption that local and expatriate teams can bridge cultural gaps through practical on–the–job experience might work with those few highly intuitive individuals with the exceptional ability to assimilate cultures.
What stands out in numerous studies, however, is the need for ongoing multicultural training, that can successfully impact people, especially those who need to quickly adapt to new or changing business culture and values, while fostering sensitivity and teamwork among all company members.
Finally, I have found a tiered service model — training, mentoring, and ongoing strategic support- to be the most effective approach for an organization. For leadership, they most often benefit from one-on-one coaching, too.
Year-end organization-wide promotions, restructuring, and new assignments for teams are traditionally a part of Korean corporate culture. Top to bottom within Korean companies they occur sometime between early December and early January, with the changes to senior leadership announced first, and team level changes as a norm made known the week just before or between Christmas and New Year’s Day.
After the Holidays, teams then report back to work. Some assume new roles frequently in departments where they have little experience—requiring employees to acquire new skills—sink or swim.
In the days that follow those shuffled brief their replacements, as staff remaining in their jobs update new management teams on the status of projects and issues.
Meanwhile, others will be en route to assignments in overseas operations; a challenge for those working outside Korea for the first time.
This can also be a challenge for local overseas operations. In particular, it is common for those newly assigned to be unfamiliar or have very limited experience with the many nuances in the localized foreign business, as well as the new role and responsibilities. Not to mention, working outside Korea is in itself a learning curve that can take months and even years.
And I strongly recommend leadership—Western and Korean– have countermeasures in place to mitigate any transitional gaps. They do occur. In fact, over the years I have worked extensively to facilitate smooth transitions.
So, what to look for…
The top Chaebol will and have begun to announce key promotions, which can provide some insight into future trends. The Chaebol usually also comment on whether this year’s promotion number is more or less than in the past and the reasons “why.”
On restructuring, top Chaebol have already announced plans. These can range from granting more independence to business units to consolidating control.
In their restructuring, SK Group elevated a number of executives to vice-chairman level and granting independent decision-making authority to their key affiliates that span from semi-conductor chips, batteries to wireless network, energy, and biotech.
In contrast, Samsung Electronics noted as a shake-up they will merge 3 of their business units.
Samsung also announced several changes in its corporate policies. With the new year, they will employ a new personnel management system. Under the new system, Samsung will abolish a set of requirements before an employee gets promoted to a certain level, such as a minimum term of service that lasts roughly eight to 10 years. Instead, top-performing employees will be eligible for their work performance and expertise be taken into account as key factors for promotion over time in grade.
The Hyundai Motor Group, too, has announced its executive reshuffle. To align with the new Chairman E.S. Chung’s future vision, we see a plan to bring younger faces on the C-suite with a focus on future mobility and on technology sectors such as infotainment, ICT, and autonomous driving. This then means many of the current leadership are stepping aside to the advisory posts.
New Years’ Message
This said, as in the past, with the new year, we can expect leadership will share their 2022 plans in an annual New Years’ company announcement, too. I monitor closely and as they are in Korean will share when appropriate and upon request.
As a final note, for western global teams, I suggest congratulating those who are promoted but also be sensitive to Korean team members who were passed over… or possibly moved to what may be seen as a less strategic assignment.
BTW Time in grade is just a criteria for promotion, or in some cases if a junior is promoted over a senior it is deemed as their time to retire.
Questions? Please feel free to reach out. dsoutherton@bridgingculture.com
Decision-making and Approvals: Korean Business Culture Insights
Hot topic…This week, I share two of my Korea-facing business perspectives—decision-making and approvals. Are you developing a high-priority project or business proposal? I can provide perspective to ensure success. Let’s talk.
Decision-making and Approvals: Korean Business Culture Insights
This week, I am sharing two of my Korea-facing business perspectives—decision-making and approvals.
In most Korean companies leadership decides on direction and major issues. In turn, the working and local team’s role is to gather and prepare needed information.
Then, if approved they will report back to HQ on implementation and progress.
In cases where overseas leadership and teams hope to offer an idea, new service, or program, local Korean management’s role is often to gather information and then share it with the appropriate senior team members, who are often in Korea. The local opinion is valued, but review and final approval may come from Korea.
My suggestion…
When conducting a meeting where a decision must be made please recognize that your local Korean team(s) will have a considerable say in the outcome. This may include both the operations and finance teams.
First, since the topic and subject matter may be new to your Korean team, I recommend you share before the meeting any needed background documents (best provided in PPT format).
In addition, have an informal pre-meeting Q&A with the Korean team leader to brief and update them on any specifics. Note: they may need a day to review proposals and agreements, so timing is critical.
Even in the best cases, expect that the Korean team may want to postpone any decision until they can carefully review and perhaps confer with Korea. I suggest all documents and meeting PPTs be immediately forwarded to the Korean team. I’d create a sense of urgency with a timeline for execution and implementation.
Regardless, expect some delays and be patient. Over the years, I’ve found that Korean teams appreciate when their overseas co-workers recognize that the internal approval process takes time and be ready to offer as-needed supportive data or documents.
The Approval
Within hierarchical business structures approvals usually require several people to “sign off” on a program before commencing the project. For those who are used to leaner organizations, the process can be seen as time-consuming and lead to frustration and delays.
First, once the go-ahead agreement to move forward on a project is reached within the local organization’s team, the Korean team, too, often has its internal procedures that usually include both Operations and Finance approvals.
Depending on the size of the local organization and whether the project needs review by the Korea HQ, I’ve experienced projects requiring several “approvals” leading to a “final” approval.
For example, once the Korean team agrees to a project, it may mean their team has signed off, but the project must still go to senior management for their okay.
Once senior management has approved, it may go to a COO or CEO for “final” review.
I’ve found Korean teams can be rather vague in sharing the number of approvals in part because the approval chain may change with each project.
In other words, the Korean teams are aware there are several approvals, but depending on the nature of the project and the costs involved higher levels of approval might be required.
I recall a Korean team leader on one project rather humorously reporting approvals several times over a week and then upon receiving a final approval at the end of the week remarking that it was really the “final” approval.
In some cases, I’ve seen companies with several C-levels sign off, but the project still waits several more days for a senior CEO or their Board to approve.
In the best instance, these senior approvals go smoothly when senior leadership trusts the judgment and needs of the local organization’s team.
However, in other situations, leadership may request additional specifics on the project. More concerning, I’ve witnessed senior leadership ask for modification, dramatically affecting previously negotiated terms and conditions of the agreement.
One example of CEO intervention that is not uncommon comes to mind. Several years ago, I was organizing and facilitating a 10-day Global Manager Leadership workshop in Korea for one of the Hyundai Motor Group’s top divisions.
Participants from the U.S., Europe, the Middle East, India, and Asia-Pacific would be attending. Plans were set, dates confirmed, and approvals were obtained up to, but not including, the CEO, an approval thought to be just a formality.
To the surprise of some, the CEO asked the Korean team a number of pointed questions. Uncomfortable with the level of response and sensing the team was rather inexperienced at organizing a global event, he asked the workshop to be postponed with the team re-grouping and coming back in a few days with some data/metrics centered on outcomes from past events and specifically their impact on long term employee loyalty.
Take away
Be aware that projects might be ‘approved,’ and you will be expected to move forward but there may be the ‘Final Approval’ before a true engagement. In the best cases, I have witnessed a quick sign-off by a CEO. In the worst case, they will either want things restructured or postponed.
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