A Regimented Approach

The Korean war of the early fifties destroyed the manufacturing facilities of South Korea. Not surprisingly then, the early entrepreneurs, who took up the job of reconstructing the Korean economy, were deeply influenced by the war. Most of them had gone through some kind of military training, which instilled a high degree of discipline in them. Kim Woo-Choong, the founder of the Daewoo empire, has said in his autobiography, Every street is paved with gold, The Korean war made me what I am today.

Naturally, that early influence filtered into the way they managed their businesses. And till today, the effects of the war continue to linger in modern Korean conglomerates. However, some of them are gradually changing as second-generation Koreans, trained in western schools of business thought, take over the reigns.

This mix is reflected in Korean businesses in India as well. While some like Samsung are changing their management practices globally -- and this is reflected in the Indian subsidiary as well -- others continue to be more rooted in tradition.

The kwalli or the management in a typical Korean organisation is often compared to the military. Thats because of its vertical structure, with a precise chain of command emanating from the top and going down to the lower levels. An employ in such an organisation would invite serious trouble if he committed hakusang, that is if he bypassed his immediate superior or jumped levels.

The practice can be traced to the days when the early Korean entrepreneurs ran their businesses like private fiefdoms. There was no decentralisation in the decision-making process and all the powers were vested in the senior managers.

To a large extent, this is the case even today, although the rationale for it may have changed. Says K Y Han, general manager, Hanil Bank, Its true that the Koreans dont have much experience of working together. The decision-making is concentrated at the top level.

The reason, according to Han, is that Koreans like to get their work done quickly. If too many people are involved in taking decisions, it takes a lot of time. So decision-making is left to the upper echelons to ensure speedy disposal.

The explanation may suit the Koreans but it could also ruffle feathers as companies globalise and enter new markets. For instance, one Indian manager working in a Korean company interprets the style as evincing a lack of trust in the Indian management.

But while there may be divergent viewpoints on the Korean management system, there is no doubt that it has yielded results. For a country lacking in natural resources, Korea is today ranked among the foremost developing nations.

The Koreans say that their country has made up for the lack in natural resources by becoming competitive is other areas, especially quality. Sticklers in this respect, Korean managers always emphasise that as far as a product or service is concerned, only the best is acceptable. Employees are encouraged by various means to get rid of the choktangjuui or doing only a satisfactory job mentality and to strive for perfection. So posters are commonly used in the work place to drive home the quality mantra.

Apart from the war in the fifties, Confucianism has also played an important role in defining the management philosophy of corporate Korea. The Confucius family system demands that members sacrifice their individuality for the benefit of the overall system. Similarly, in a Korean organisation, songsil or sincerity is highly valued.

Songsil means total dedication to the company. It is a willingness to put the interest of the company above personal goals or even ones family. Many companies like Samsung, Hyundai, LG and Daewoo have conducted specific programmes like kukki hullyon or self-control training to break down their employees preconceived notions and to realign their goals with those of the company. Programmes are designed to encourage the employees to put the groups interest before their own. For instance, there are tests and puzzles that can be only solved through group effort. So they encourage working together.

Also, the methods through which such levels of cooperation are achieved are not always military. Corporate philosophy is geared towards paternalism and emotional ties. Managers are encouraged to promote ilch egam or the sense of oneness.

People do not easily change jobs in Korea. And a person who changes jobs regularly is not held in high esteem, points out Han. It is fairly common, he says, to find people who have spent their entire working life in one organisation. Such employees are rewarded by the organisation and they play an important role in decision-making. These managers are often referred to as tobagi meaning native or aborigine.

Things, however, are changing. Second-generation Korean executives, who began taking charge in the late eighties and early nineties, were mostly educated in American management schools. That influence is now creeping into many organisations. Corporate groups are rethinking their philosophies and goals.

Take the case of Samsung, which changed its corporate philosophy in

March 1993. Group chairman, Lee Kun-Hee, introduced the phrase Change begins with me. The message: everyone working at Samsung must rediscover humanism

and morality and perform in a professional manner. To that end, the group is transferring more authority to the lower levels in order to foster their workers administrative abilities and experience.

Samsungs focus on consensus in decision-making is also reflected in the New Management programme of the Indian subsidiary. It states, If a decision is made through a consensus of the participants involved, those participants are obliged to adhere to that decision. So the departmental heads at Samsung India meet every week to discuss all matters pertaining to the company. And only then is a consensus decision taken.

The corporate philosophy of the LG group is also geared towards creating value for customers and on management based on esteem for human dignity.

Thats a far cry from the military approach of the founders. So as Korean companies globalise, they are imbibing changes in their management principles and evolving into more democratic organisations.