The Korean economy came to be widely regarded as a possible ‘role model’ to be followed by other newly industrializing economies. The 1997 Asian Crisis shattered this image. The economy faced a competitive squeeze between lower cost and rapidly growing economies such as China on the one hand, and higher knowledge/technology based economies such as Japan on the other hand. Such a situation is caused due to structural economic problems, such as high cost but rigid systems and widespread bureaucratic intervention. It is believed that there is a need to build up new economic paradigm, one based on market-led, global,
and transparent systems, giving it the potential to combine the best of both the worlds. It is argued that a principal reason for the financial collapse was a failure of the Korean management to adjust to changing business conditions. As Korean firms grew in size and scope, many of the entrepreneurial characteristics that supported their early successes were replaced by bureaucratic, non responsive management structures that proved unable to cope with emerging external opportunities and threats. The central question here is what Korean firms must do to reinvent themselves in ways that will enhance their competitive edge in the future. Since the mid-1980s, many Korean companies have adopted a unique approach in managing their organizational culture, that is, the so-called ‘culture change campaign’. This examines how effective the campaigning approach to managing organizational culture was in Korea. Although many Korean companies made substantial investments in their campaigning efforts, empirical data indicated that the campaigning approach was not, on the whole, successful. The possible reasons for the failure were identified and suggestions for improvements made. Implications for culture-change management were made from the lessons of the Korean experiences. A review of the foregoing research was done to summarize the critical success and failure factors of corporate culture change. The government, the majority stockholder, and major institutional force played a critical role as an initiator of change, but turned into an inertial force in the later phases of change. The change of organizational structure that was strongly supported by the top management was successful, while the momentum for HRM change, without such support, was not enough to overcome trade union opposition and employee resistance.
and transparent systems, giving it the potential to combine the best of both the worlds. It is argued that a principal reason for the financial collapse was a failure of the Korean management to adjust to changing business conditions. As Korean firms grew in size and scope, many of the entrepreneurial characteristics that supported their early successes were replaced by bureaucratic, non responsive management structures that proved unable to cope with emerging external opportunities and threats. The central question here is what Korean firms must do to reinvent themselves in ways that will enhance their competitive edge in the future. Since the mid-1980s, many Korean companies have adopted a unique approach in managing their organizational culture, that is, the so-called ‘culture change campaign’. This examines how effective the campaigning approach to managing organizational culture was in Korea. Although many Korean companies made substantial investments in their campaigning efforts, empirical data indicated that the campaigning approach was not, on the whole, successful. The possible reasons for the failure were identified and suggestions for improvements made. Implications for culture-change management were made from the lessons of the Korean experiences. A review of the foregoing research was done to summarize the critical success and failure factors of corporate culture change. The government, the majority stockholder, and major institutional force played a critical role as an initiator of change, but turned into an inertial force in the later phases of change. The change of organizational structure that was strongly supported by the top management was successful, while the momentum for HRM change, without such support, was not enough to overcome trade union opposition and employee resistance.
The concept of Korean business management has a tendency to ‘individualism’ in comparison with the Japanese social collectivism forgetting family. It is also described as ‘family egoism’. Korean people are said to find their identities in their family groups. So, in other words their individualism can possible run on their family egoism. In every factory or office people work with a strong sense of responsibility. However, the Korean style of production in their workshops is open for everything, but it cannot do well because they work with rough spirits and a moderate sense of responsibility. The concepts of business management in Korean companies are almost similar to the companies in Japan and the US.
Questions and Answers
1. Study this case carefully. In India we have two major Korean consumer electronics conglomerates. While both the companies have achieved tremendous market growth, they have started encountering the problem of losing their key people. Track such reasons to the typical Korean culture and suggest how such Korean companies can best adopt the theory Z model.
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