Many foreign managers believe that with the right product and price they can easily sell to any South Korean company. This may be the case in Europe and USA, but does not always hold true in South Korea as well as many other Asian countries, where relationships play a crucial role, when it comes to business. The product, profits and everything else comes secondary. Therefore, if you do not or cannot establish good personal relationships with a large network of people, it is either very difficult or impossible to do business in South Korea. Trust, personal relationships and contacts as well as the sense of honor are the primary foundations of Korean business ethics. Reading this might not seem surprising since this may also be the case in your country, but trust me, Koreans take it to the next level.
Until recent decades written contracts were extremely rare. Most business arrangements were based simply on verbal agreement and the shake of hand. As a result, South Koreans spend a big portion of their time expending and nurturing their personal relationships. Doing that is still one of the crucial things for survival of your business.
So how does this effect foreign businessman? As you may guess it, they need to adapt. It is essential that they schedule business dinners and drinking nights into the time frame of their plan. And if that means drinking until 4 am on a Monday night, well you got to do what needs to be done.
You should also keep in mind that establishing a strong relationship might take time. Although you might want to set up a business as soon as possible, please do not try to rush it. The more you try to rush a decision or activity, the slower the process will be and the greater the likelihood that your efforts will fail.
Believe many foreigners possess, is that meeting the president of a company and getting his approval means smooth sailing process from then on. This is not the case. Many managers (lower, middle and upper) who actually run the company will feel like they are being bypassed and will be therefore less cooperative. Sometimes to the extent that the business will never get off the ground.
Consequently, I would recommend you to establish relationships with various managers. More importantly threat them with the same respect as the president of the company. This applies to all the companies, even the once that are still in hands of their founders and where it seems that they are the once making all decisions.
In addition, you need to figure out what are the personal ties between the managers and director or the president. In Korea, personal ties such as kinship, the same school, the same birthplace or marriage often play bigger role than seniority, rank or other factors and may influence on who actually runs the company and how it’s run.
Finally, Koreans tend to run their companies as an extension of their large family, which means that they often make decisions that are based on purely personal considerations. Although, Korean organizations are changing in various different aspects, when it comes to personal relationships, the situation is staying the same. As far as I see it, they are not likely to change this system anytime soon. Therefore, adaptation is the only option you have. Learn how to cope with it and it will serve as your competitive advantage over other western organizations.
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