Korean Vs Us Management Essay, Research Paper

Compare and Contrast US managers with the Managers of the Rebublic of Korea – business Introduction We have chosen to compare and contrast U.S. managers withthe managers of The Republic of Korea (ROK). The ROK is a tinynation of 42,621,000 people residing precariously on the southernhalf of the Korean Peninsula (Cook l995). It has a very highpopulation density with 1.121 persons/ sq. mile. They areethnically homogenous with 99.9% being Korean and .01% Chinese. The age distribution is 30% under 15 years of age and 4.3% overage 65. They have a life expectancy of 73 years of age forfemales and 66 year of age for male. The primary religions are Confucianism, Mahayana Buddhism,Ancestor Worship, Shamanism and Ch’ondagyo which account for 66%of the population with another 28% practicing the Christianreligion. The Han’gul writing system is the official language of Koreawith English being widely taught in many schools. The governmentis made up of the executive and legislative branches. The Headof the State or the Executive President is elected by directpopular vote for a 5 year term. The Legislature is comprised ofa 299-member National Assembly which is elected on a 4 year termby universal adult suffrage. The economy is estimated to produce GDP of US $121,310million with a per capita income of US $4,045/ year. The totalnumber of persons active in the economy was 16,900,000 with a 3%unemployment rate and a literacy rate of over 90% (East 1990). Koreans are a sincere, warm, and friendly people. They makedeep commitments of friendship and loyalty that are permanent ifthey are treated fairly and respectfully. By the same token, ifthey are mistreated, they make formidable enemies. A significantpercentage of ROK’s top managers are educated in the UnitedStates, and speak fluent English. The Topics we have chosen the compare and contrast areLeadership, Decision Making and Motivation. Leadership Although managers in Korea and the United States havesimilar problems and responsibilities, important culturaldifferences dictate how they achieve the goals. Since both cultures have the same goals in business – profitand success, they display some similarities in their leadershipstyles. First and foremost, all managers expect their employeesto behave in a professional manner and accomplish the tasksassigned to them. Very little tolerance was noted in eithersocieties for substandard work product. Additionally, management in either country recognized theimportance of its role in the overall success of the business. Communication was found to be the decisive factor to achievingthis objective. Surprisingly, Korea has adopted this U.S. management style of openness with less resistance than otherAsian countries. Korea has typically been viewed as a countrywere military traditions have been pervasive and obedience toauthority is deemed absolute. The fundamental change inphilosophy may be explained by the fact that Korea is a land ofdivision, so the people are willing to listen and respect anotherperson s point of view. (Baum 1987). With Korea fast becoming anindustrial power, the idea of communication through listening isessential to the promotion of post-Confucian work ethic. Several major difference were noted when comparing theleadership style of Korean and American managers. A majordifference is how managers tend to view the cultural importanceof groups. Americans tend to focus on the individual, with eachperson being responsible only for their own actions. Leadershipis conveyed more by example than by interaction and employeestailor their performance to their own personal aspirations. Koreans view work performance as a contribution to the group. This originated from the fact that most countries in Asiafunction in basic group oriented structures. (Doktor 1990). Therefore leadership is enhanced when instructions arecommunicated to the entire work force rather than to oneindividual. Of equal importance is the way managers are viewed bythe employees in the business. Americans tend to view theirsuperiors as the enemy and people to avoid at all costs. Thedeference given to them stems more from fear and/or envy thanfrom basic respect and concern for the company. Koreans viewtheir managers as important social leaders. Respect for rank andstatus within the business environment is high so the manager srole takes on great symbolism. (Doktor 1990) The manager isseen as a representative of the organization and his positionholds great value in creating strong links in the firmsorganizational structure. For instructions to be respected,ritual proprieties and courtesies must be observed. Decision Making Relationships between employer and employee, superior andsubordinate, is more like that between family members rather thanlike master and servant relationship. This explains why seniorityis a big concern when companies consider who should be promoted. Koreans also view the father as an authoritarian figure. He mustbe respected by all members of the family, and his words must beobeyed. This philosophy is also reflected by the trainingprograms in most of Korean companies. Employees are trained toaccept orders, and the company leaves little imagination for itsemployees (Janelli 1993). Therefore, South Korean employees arenot involved in the decision making process since it is reservedfor the top management only. Most of the Korean company is based on technicalqualifications, a rigid hierarchical order, codified rules andregulations. In most of the companies, one of the most importantstandards for regular promotion is length of service. People atthe high level are considered as highly loyal to company, andmore competent than other people in the company. That is whydecision making is concentrated in the upper levels of managerialhierarchies and major decisions, especially those requiringexpenditures, go through a formal procedure requiring approvalfrom upper level of management. This formal approval process isconsidered more a means of authority and control rather thanconsultation and participation. Unlike Japanese, most Koreans will decide in their own favorwhen confronted with a choice between the interest of the groupor their own interest, ethics play no part in them (Chu 1991). Therefore, it is very important for managers to consider thebenefits to the employees when they make decisions. In order todo this, decision are always long term oriented. Interestinglyenough, this type of decision making mimics the father takingcare of his children, referring once again to the importance ofthe family in Korean culture. In contrast, managers in American firms are highly influenceby the idea that they should maximize shareholder wealth(Eiteman,1995). Since most of the American companies are publiclyowned, management, especially the CEO, are closely monitored bythe shareholders. Their performance is based on how much wealthor value they can created for the shareholders, not how muchwelfare they can created for their employees. Managers who under CEO s control certainly have to followthe same pattern. Unlike Korean company, managers are chosenpredominately by their performance in the company; seniority isnot a big concern. Similar to a Korean company, importantdecisions are typically made by high level managers after someteam discussions, Sometime, a decisions can involve employeessuch as foremen or supervisors and can be implemented without theapproval of high level person. Relationships between managers andemployees are not as intensive as in Korean company. In Americancompanies, managers are more like a working companion rather thanan authoritarian figure. In America, the obligation for managers to take care of hissubordinates is not as strong as in Korea. They sometimes willsacrifice employees welfare in order to keep their jobs. USmanagers are usually evaluated once every year, and in order toget a better performance during a short period of time and getpromoted, their decisions are usually made to achieve a shortterm objective. Motivation Over the last quarter century, the ROK has achieved what iswidely acclaimed as “the economic miracle on the Han Rive.”Since Korea embarked on economic development in early 1962, itseconomy has grown at one of the fastest paces in the world. As aresult, Korea, long known as one of the world’s poorest agrariansocieties, has emerged as an upper middle-income, fast-industrializing country. The key to this success was theadoption of an outward–looking development strategy makingexports the engine of growth — a strategy that reflected Korea’sinsufficient natural endowments, its limited domestic market andits abundant, well-educated, industrious manpower. In general, Korean’s are motivated by good education whichposition themselves well in today s marketplace. From this pointthey are motivated by high achievement for which they are notalways rewarded for because of the authoritarian culture theylive in. When comparing motivation in Korea with that in the UnitedStates we found that US employees receive more job-relatedinformation than do their Asian counterparts. Therefore Koreanemployees might be somewhat uncertain about how they are toexecute their jobs which may dampen their motivation to achieve. In the US, contingent-based reward systems tend to be usedwith rewards typically being based on merit. Salary level ispredicated on performance and education; incentive pay onperformance; and promotion on performance. In Korea, however,salary level is based on seniority; incentive pay is uniform; andpromotion is seniority based. Korean employees have littleprospect for long-term rewards or promotion, irrespective ofperformance. The US individualistic orientation tends to drive USemployees to aspire to achieve through promotion. This result is

a feeling of success, which can generate extrinsic rewards and bea source of self satisfaction. Alternatively, Korea focuses ongroup harmony and unity and thus are not as driven for individualpromotion. Therefore in conclusion US employees have a higher valencefor personnel growth and development than do Koreans. Both USand Korean employees are motivated by monetary compensation(Dubinsky, Kotabe, Lim, Michaels 1994). Hypothetical ScenarioTo: Mr. Willie Hopkins; Manager of South Korean OperationFrom: Human Resource Department; AT&T Engaging in a joint venture in Republic of Korea is a bigleap towards attaining the internationally oriented goals thatour company has sought. There is an urgent need for technology,manufacturing and marketing skills in South Korea that can not befulfilled by the locally. This is the main reason why we areengaging in a joint venture with Sumsong Corporation. This manualis designed to inform you about Korea in general and offers somestrategies on how to deal with various difficulties you mayexperience. 1. Learning and Training It is very important for you to know and understand Koreanculture, religious value, politics, geography, and history. Bylearning about these, you can improve your adaptability andflexibility to adopt Korean business ways, behaviors, andthinking. The knowledge of Korea would help you make a closerelationship with Korean employees. Language training is alsocrucial for you to be successful in your long-term assignmentbecause only a small percentage of Korean businesspersons andgovernment officials speak English (Mente 1988). In addition,you should recognize that technical, managerial, and legalknowledge about your assignment. The Human Resource Department is here to train you. Thefirst session is for general and cultural knowledge about Koreaand Korean (Hunglu). This session will commence months beforeyou assignment begins and utilize written materials, seminars,video, meetings, and a preliminary visit to Korea. The secondsession requires you to learn about your assignment. This willbe also done before you go to Korea (Alkhafaji 1995). According to a study (Hill 1984), 90% of expatriates failure results from their spouse problems such as, isolation,loneliness, and boredom. The HR department highly recommendsyour spouse and children s participate in the first session alongwith continual updates initiated by you. An executive of Sumsong, who has a strong connection toKorean government and business world will be introduced to you asyour mentor. You should contact him and grasp actual Koreangovernment and business situations. To make a close relationshipto the governmental and business people is to lead yourassignment success. 2. Social and governmental interference Korean culture is highly influenced by the traditionalfamily relationship, village discipline, and Confucianism. Thetraditional family relationship and village discipline enforceseniority and harmony. A father holds the family s property andhas a absolute power over his family. His wife and childrencannot openly express disobedience, assert independent rights, orconfront the father. A village leader, usually an eldest personhas similar power and authority. In order to live comfortably,the locals should keep harmony and cooperate among themselves. Therefore, thinking as a group is much more important thanthinking as an individual. Confucianism also strongly affects Korean culture. Itemphasizes the need for authority to govern the masses andadvocates the virtue of subordination and endurance of women tobecome good wives and mothers. This leads the Korean culture todisplay characteristics such as, authoritarianism, collectivism,and male dominance in the society. Note that governmental factors may interfere with yourassignment. Hart-Landsberg(1993) mentions that Korean governmentregularly targets new areas for development by encouraging theestablishment of domestic firms to replace imports. These newdomestic firms are protected by both trade restrictions andlimits on foreign investment and, when judged capable, arerequired to export as well as meet domestic needs. Therefore,you must pay attention to the Korean government policy and actionrelating to the Korean venture. Also, even though the Koreangovernment changed from a military government to democraticgovernment, the military still has strong influence over thegovernment. Hence you need to consider the present relationshipbetween the government and the military. 3. Organizational factorsCorporate culture All of your superiors, subordinates, and co-workers areKorean and the organizational structure is based on that ofSumsong. Korean businesses generally have an organizationalstructure of vertical concentration of decision making at upperhierarchies and horizontal concentration of functional control instaff departments. Confucianism has had a great impact on theorganizational culture of Korean firms. Thus, the cooperateculture is hierarchical, authoritarian, and harmonious Social status remains a vital factor in personal andbusiness relationships in Korea. To employ a Korean with a lowsocial status as a manager because of his English languageability, experience, and other qualifications, and expect him toeffectively manage employees with higher social pedigrees willresult in major problems (Mente 1988). Management power groupsare also formed based on common geographical and school ties. Informal relations such as school ties play a strong factor dueto feeling of common identity and belonging. Great emphasis isplaced on graduation dates due to the importance of seniority. Social interaction and personnel decisions are affected by acommon background and compatibility brought on by being from thesame region. Because management and labor relationships are similar tothat between a father and his sons, Korean employers treat theiremployees with enlightened and personal concerns that keep themloyal and motivated. Companies should bear the responsibilityfor establishing and maintaining a relationship of integrity andtrust between the managers and employees. You should develop andmaintain the expected relationships by remembering not to breakany of the taboos of Korean society while demonstrating a sincereappreciation for Korean sensitivity. Communication You should realize that formal etiquette is verysignificant. You can see today that traditional bows are stillthe official, formal method of greeting and farewell. There areseveral different kinds or grades of Korean bows, each dependingon the age, rank, and social position of individuals involved aswell as the situation in which they are bowing (Mente 1988). The official call in South Korea is another way of showingsocial status. It is used at formal affairs especially if youare visiting the company for the first time. It is extremelypolite and expedient to make appointments well in advance. As ameans of respect, most Korean executives will stand when avisitors enters their office. It is also regarded as impolite forlower ranking employees to remain seated while their superiorstands. High-level Korean executives may not stand up whensomeone they do not know arrives unless informed that the visitoroutranks them or is a special guest (Janelli 1993) It is highly recommended to spend some time with the Koreanemployees outside their working hours. Generally, South Koreansdo not feel free to communicate openly with their superiors atwork. However, they are willing to express their minds outside. During these occasions, they voice their problems anddissatisfactions about their jobs and relationships. You willhave many opportunities to spend your private times with yourKorean employees. Do not hesitate to participate in the eventssuch as an eating and drinking party, a nighttime singingsession, or a picnic. Personal relations and contacts are veryimportant for Korean business. These situations will help youmake close relationships with the employees. Please note that ifyou fail to participate in these activities, you will likelycreate serious problems because Koreans usually expect yourparticipation. Employee motivation The evaluations in Korean companies place much emphasis oncontribution to the company, ability of performance, and personalcharacter and attitudes. The ability aspect includes jobknowledge, creative planning, understanding, judgment making, andgrowth and development potential. Personal character andattitudes include seriousness, responsibility, effort to self-development and improvement, and human relations. Hard work andharmony among employees is highly valued. It is difficult to promote someone of exceptional abilityand qualifications without senior status. A worker often leaveshis company if a colleague whom he considers less qualified thanhimself gets promoted. However, seniority is more important inlower levels of the organization. The standards for regularpromotion in Korean companies are length of service, achievement,including awards; training, foreign language competence, andmerit of performance. Female workers who have the same jobclassification, titles, qualifications, and educational levelsare still paid less than male counterparts because of socialinfluences because Korean society is male-dominated. If youpromote a woman, understand that it may be advisable to make aninformal agreement with the other employees otherwise thepromotion could rupture the morale of the employees and seriouslyaffect performance. If you promote someone, evaluate the employee’s performance,or give rewards, you have to consider the factors previouslydiscussed and above all, strive to maintain harmony among yoursubordinates. Reference Alkhafaji, Abbass F. 1995. Competitive global management:principals & strategies. Baum, Laurie. 1987. Korea s Newest Export: Management Style . Business Week (January) : 66. Chu, Chin-Ning. 1991. Asian Mind Game. New York, NY: RawsonAssociates. Delray Beach, FL: St. Lucie Press. Cook, Chris. 1995. The Fact on File World Political Almanac,Third Edition. New York, NY: Fact on File Inc. Doktor, Robert H. 1990. Asian and American CEOs: a comparativestudy . Organizational Dynamics (Winter) : 46-56. Dubinsky, Alan, Masaaki Kotabe, Chae Un Lim, Ronald E Michaels. 1994. Differences in Motivational Perceptions among U.S. Japanese and Korean Sales Personnel . Journal of Business (June): 175-185. East, Roger. 1990. World Fact File. New York, NY: Facts on FileInc. Eiteman, David K., Arthur I. Stonehill, Michael H. Moffett. 1995. Multinational BusinessFinance. Norwalk, CT: Addison-Wesley Publishing Company. Hart-Landsberg, Martin.1993. The Rush To Development: economicchange and political struggle in South Korea. New York, NY:Monthly Review Press. Hill, Charles. 1984. The Pitfalls in Diversity . ManagementToday. (December) : 80-83. Janelli, Roger L. 1993. Making Capitalism: The Social andCultural Construction of a South Korean Conglomerate. Stanford,CA: Stanford University Press. Mente, Boye De. 1988. Korean Etiquette & Ethics in Business. Lincolnwood, IL: NTC Business Books.