Global Business Cultural Analysis: South Korea
Korean companies are major business players in the global market due to their impressive performance. Today, foreign organizations are seeking cooperation with Korean firms, though they face challenges when handling daily business transactions. The reason for the problems is the Korean corporate practices, behaviors, and expectations. Hence, these distinctions occur due to Korean culture, which is different from other nations. Korea has a unique culture that includes Kibun, Inhwa, and Confucianism, the power of distance/hierarchy, collectivism, business etiquette and relationships in the commercial activity (Lee, 2012). Although there exist other cultural issues, these are the most crucial ones, as they affect business practice in Korea. All the parts of the Korean culture have a great influences on the manner business is done in the state. It is, therefore, important for foreign establishments as well as foreigners to understand all aspects of the business environment in order in Korea to efficiently and effectively manage enterprises in the country.
Aspects of Korean Culture
Kibun lacks a direct English translation, though it is an essential aspect of the business environment in South Korea. Nonetheless, it means a feeling of good behavior or mood balance. People in South Korea strive to maintain stable conditions (Kibun) for the corporate world as well as personal life. Koreans are willing to maintain their Kibun and that of others since it is not polite for anyone to disturb someone else’s Kibun (Lee, 2012). As a result, South Koreans follow this culture of minding the feelings of people. In fact, they tend to respect their opinions and susceptibilities.
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The culture plays a decisive role in the corporate world, mostly because Koreans will always attempt to be friendly and have the best of intentions. However, it is not a positive factor for business relations since Koreans may show feelings of an ambiguous answer. It is important to read their body language to grasp the actual meaning of their replies. The technique of reading non-verbal languages is known as Nunchi. It is an eye measure, which gives one the ability to discern the Kibun of others. Nunchi is a sixth sense that one should use to comprehend what another person is saying (Lee & Lee, 2014). Therefore, Kibun is a Korean culture that foreigners should understand and learn to incorporate it into their entrepreneurial activities.
One more South Korean culture is Inhwa, which means harmony. Korea has a collectivist society. Hence, a consensus is a vital aspect of maintaining and promoting the harmony in the country. Inhwa stems from the Confucian beliefs that emphasize harmony between individuals, mostly equals (Tu, 2010). Koreans have a habit of giving positive answers and are reluctant to produce direct refusals. Furthermore, these people strive to create a harmonious environment; thus, they avoid making negative replies. Inhwa requires subordinates in the business world to be loyal to superiors. Similarly, the latter should also be concerned about the well-being of other juniors; and therefore, the executives are not expected to scold their staff in front of others (Lee, 2012).
Notably, South Koreans believe that one owes total loyalty to parents, rulers, elders, and authority figures. As such, employees attribute allegiance to employers and supervisors. In the corporate world, people avoid criticizing each other in public (Lee & Lee, 2014). Managers and their workers abstain from conflicts, even if they have differing opinions. However, there is no concept similar to Inhwa in other countries. Disagreements and divergent outlooks are not the factors that can disturb a harmonious environment in the US. In fact, each person is regarded to have the right to express their views to others, including employers and employees.
Inhwa has led to a clan management style where the senior managers have family ties. Besides, the trend is not common in the United States. Loyalty, as well as clan management, is rare in the American culture. Inhwa is an aspect that has made it difficult for Americans to understand or even work efficiently in Korean companies. Another important issue of Inhwa is that it considers the Kibun of others (feelings). Therefore, Koreans wait until the afternoon or evening to deliver bad news (Lee & Lee, 2014). American organizations should note this culture and delay making changes in the contract, providing updates or announcing any data for Korean firms until the end of the day. On the other hand, since Koreans avoid giving bad news, they may use ambiguous and indirect ways to pass a message. Consequently, it may mislead foreigners, who should be keen on deciphering the hidden meaning in the Inhwa-related report.
Power Distance and Hierarchy in Korea
South Korea is a great power and hierarchical state. Ordinarily, the eldest person in a gathering is offered the opportunity to initiate activities. By contrast, the individual with the lowest status has to bow to others (Lee & Lee, 2014). The high rank people sit in the head position of the room and receive their meal first. Youngsters pay respect by serving them food. Title addressing is used to show power distance. South Koreans do not greet each other mentioning first names, but through their titles. In Korea, freshmen approach their juniors and seniors as sisters and brothers. In the United States, students choose their course and address each other by first names. Moreover, they talk to their lecturers by their first names, which is a rare and rude habit in Korea (Dlabay & Scott, 2010).
Korea has a relatively high power distance index that has made less influential members accept unequal distribution of power. Korea has a significant level of inequality and individuals in this society are more unequal than the ones in the United States. Most foreigners in Korea are amazed to see people bowing to others (Lee, 2012). It is essential to take into account the high power distance and show respect to facilitate successful collaboration with Korean companies. Additionally, the right officials should be sent to Korean corporations to negotiate deals (Dlabay & Scott, 2010).
Korean Confucianism and Collectivism
Confucianism is a Chinese way of thought that has permeated the Korean culture. It affects both personal life and the business world. Confucianism is a lifestyle that offers five disciplines to guide the relationships between parents and children, rulers and subjects, among others. Confucianism focuses on loyalty, honor, duty, respect, etc. It influences the Korean life in areas such as relationships and status (Lee & Lee, 2014). In essence, the Koreans are collectivist and group-oriented. The population consists of people who are integrated into cohesive and strong associations. The latter protect one another with unconditional loyalty (Dlabay & Scott, 2010).
The impact of Confucianism and collectivism culture on the business manifests itself in negotiations and decision-making. It is incredibly difficult for Koreans to reach a conclusion since they have to be mindful of every opinion and values of each member. Decisions are taken after careful consideration of the interests of the team while maintaining a stable Kibun environment. Foreigners should know about this culture in order to be patient in the negotiation process. They should understand and appreciate collectivism to discuss a settlement with Koreans.
What are the Major Elements and Dimensions of Culture in This Region?
South Korea has numerous cultural factors and aspects that impact its business environment. One of the significant issues affecting the latter is communication since most of the individuals in South Korea speak only the native language while just a few know English. The Korean wave is the communication mode in this country that could probably make the globalization process less complicated (Christiansen, 2015). Undoubtedly, most South Koreans are more comfortable with using English. However, not all of them understand this language. While speaking, they always ensure that they accommodate their style to the audience by speaking plain and basic English. The cultural differences enormously influence communication. Negative customers are mostly interpreted in various ways; thus, a yes or no question is unreliable in business (Christiansen, Turkina, & Williams, 2013). In Korea, everything moves at a very fast pace. In fact, the same day response has become a norm in this state. Undoubtedly, Korean is the primary language in South Korea. However, due to globalization, the English language has appeared to be imperative especially for those involved in entrepreneurial activities.
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The other element affecting the business environment is language. Body language is considered the way of paying respect to the elderly or individuals in senior positions. Keeping legs straight while the upper body is in a slight stoop signifies respect (Dlabay & Scott, 2010). A slight bow expresses an apology. When saying goodbye, people bow deeply although blowing nose and sneezing in public is an indecent act. In any case, if one has to sneeze, they should do it privately. Besides, if people sneeze in the presence of others, they must apologize. When receiving something, for instance, an individual should accept the item with both hands as a sign of politeness (Christiansen, Turkina, & Williams, 2013).
Additional dimension is business etiquette. Evidently, South Korea has different business etiquettes. To some extent, the protocol is mostly influenced by the Korean culture. For countries that wish to facilitate their cooperation with South Korea, it is important to learn this culture. The Korean business etiquette is exhibited in six aspects, namely introduction, business cards, meetings, gift giving and K-type management styles (Christiansen, 2015). Regarding attire, South Koreans are supposed to dress in a socially appropriate manner at the workplace. Blue, black and brown-colored suits are recommendable. Shorts, tight skirts, sleeveless tops, and low necklines ought to be avoided. One more element is women in business. South Koreans attitudes towards females in business are slowly shifting from the traditional view (Christiansen, Turkina, & Williams, 2013). However, it a rare thing to see women holding seniors positions in this state. As a result, the opportunity of working with a foreign organization is appreciated by professional women in South Korea.
How are These Elements and Dimensions Integrated by Locals Conducting Business in the Nation?
Notably, Koreans communicate in English, especially during business transactions (Tu, 2010). The listener must be keen since there is always an essential message that the speaker tries to pass due to the high context mode of language. The latter gets an approval to talk to the person he/she is addressing. However, the Koreans are consistently careful in their manner of conversation, particularly in business meetings. When dealing with the local business, the Korean language is commonly used. Most of the ordinary citizens have a poor understanding of English (Peng, 2016). Therefore, when necessary, the English language should be simple, clear and precise during local business transactions.
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In addition, Korea is highly influenced by Confucian values compared to any other business culture including China. Confucian ethics permeate nearly all working life aspects ranging from management systems to interpersonal relationships (Tu, 2010). Confucian ethics highlights the importance of harmony while conducting business. Furthermore, the ethics emphasizes the respect for authority and the significance of family, friendship and clan values (Behrens, 2009). Just like any other Asian country such as China and Japan, the quality and the degree of relationships are critical to business success at both corporate and personal levels. In Korea, relationships and networking are consequential in business transactions. Thus, to create a great rapport, it is crucial to have the Confucian mindset. Business associates should be honorable, respectable and trustworthy individuals at all times (Behrens, 2009).
Integration of attitudes, manners, customs and values in the local business goes hand in hand in Korea. Sincerity, good manners, and politeness are significant to Korean business etiquette. The Koreans undertake entrepreneurial activities in a formal manner. Notably, this formality begins during the first meeting whereby business cards are presented (Christiansen, Turkina, & Williams, 2013). In this case, the business cards are always offered to be held with two hands especially when passing to more senior people as a symbol of respect. Moreover, the individual proposing the card should bow. In fact, the card should be treated with the utmost respect and should never be written on. It is disrespectful to be late for a business gathering and if an individual runs behind schedule, they should call an hour before the meeting and notify about their delay. During the meeting, those in attendance ought to take as many notes at possible as a way of proving that indeed they are interested in the appointment (Behrens, 2009).
How do Both of the Above Items Compare with US Culture and Business?
Communication is a significant factor for business transactions between the Korean and the US businesses. It is, therefore, important for Korea to develop good relations with other countries, which is consequential when conducting businesses. Additionally, harmonious relationships are dependent on individuals’ ability to read and grasp the meaning and truth of the spoken words (Christiansen, Turkina, & Williams, 2013). However, this could pose a great challenge for the businessmen and women in the US. Hence, it is crucial to ask questions to get a clear understanding. Undeniably, both the US and Korean businesses experience communication differences. Another barrier in communication between these two states is the way they reach an agreement (Behrens, 2009).
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Evidently, this causes difficulties, especially in the negotiation process. In discussing a settlement, Korean primary concern is to pursue social relationship goals. On the other hand, Americans appear to be individualistic. They majorly focus on the immediate relationships. Besides, they do not believe in the long-term relationships, which most of Koreans foster. Thus, this causes serious problems between Korean and American businesses transactions. Communication between business associates in Korea and the US can be hard. However, with patience, it is possible to create efficient business dealings (Peng, 2016).
Another obstacle in the Korean-American association is language, especially during business meetings. In fact, a few foreigners can communicate using the Korean language. Therefore, all the conferences are conducted in English. Evidently, this can lead to confusion. Consequently, whatever is said will be misconceived for those who hardly understand English. However, in 2007, 0.7% of the Americans in Korea were reported as Buddhist. Nevertheless, in Korea, the number of Shintoism and Buddhism was 84% (Peng, 2016). Besides, toleration and moderation have lately become a norm in America. In fact, Americans celebrate dissimilarities and despise individuals who judge other religions and beliefs. Buddhists are taught to be tolerant of all forms of religions. Their faith educates them on moral teaching. Furthermore, the latter does not advocate for conflicts during any business dealings since Americans have appeared to be less biased towards other confessions and beliefs (Behrens, 2009). On the other hand, Buddhism is embracing teachings from other religions.
In addition, American attitudes and values are different from those of Koreans with regard to business. Evidently, the powerful driving force for the mentioned dissimilarities is collectivism for the Koreans and individualism for the Americans. In Korea, the hierarchy is based on cooperation and consensus unlike the Western model of decision-making. However, for both countries respect is significant (Behrens, 2009). Nevertheless, Koreans are considered to have more formal stance in the context of respecting. For instance, Americans claim that failing to look a person directly in the eyes is disrespectful or perhaps it could signify that an individual is hiding something. Even though discrepancies might occur between attitudes and values in these two states, both nations should not experience any differences when understanding each other’s attitudes and beliefs (Australia, 2016).
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What are the Implications for US Businesses that Wish to Conduct Business in that Region?
Understanding of the current Korean and US relations is essential before making any business transactions in Korea. The US-Korea alliance is held responsible for all the US security roles in East Asia. Notably, this agreement has mostly helped the US national security in that region. Thus, the association gives protection from Korean neighbors, especially North Korea and China. Korea is viewed as one of the US main economic partners (Christiansen, 2015). In a way, Korea has played a decisive role in financing the US deficits. Even though the two countries face tensions due to military strategies, economic woes, they depend on one another. After the discovery of the “mad cow disease,” Korea and Japan banned all American beef imports in December 2003. The ban was later re-imposed in January 2006.
There exist numerous reasons as to why Americans should consider doing business in Korea. The latter is viewed as a center of creativity and new trends. Major ventures worldwide are partnering with Korean companies. Korean clients are regarded early adopters. Most of the small and medium-sized enterprises (SMEs) are found in Korea, which possesses unique technologies. Thus, when the US cooperation with such corporations will possibly boost technological capacities for these industries and as well open the new market and sales channels. Japan and Korea are becoming gateways to the markets in Asia, in particular for foreign firms. Evidently, foreign organizations are seeking to expand their business in Korea. Korean industrial structure is similar to that of European and US environments (Christiansen, Turkina, & Williams, 2013).
In conclusion, different states have diverse cultures of how they conduct business. Evidently, South Korea has various unique cultures that influence human daily life, business practices in the international commerce. Thus, it is important for multinational companies that aspire to conduct business with South Korea to understand its culture since this will create better corporate environment. The major elements and dimensions of the South Korean church are communication, language, and business etiquette. While local business transactions, some of the challenges experienced by the Koreans are communication and language. Consequently, South Korea is an ideal place for doing business since it is considered a center of creativity and new trends.