2“Doing business” with Korea - Understanding Korean culture and how Korean companies “do business” ::Objectives:Identify key cultural differences between U.S. and Korean cultures;Identify differences in business perspectives between cross cultures; andIdentify key factors in “doing business”.
3:: Outline and overview: General Overview of South Korea Overview of General Cultural BasicsI. The “Cultural” componentII. High Context v. Low Context Cultures (U.S. and Korea)III. Overview of Relationships (personal and business)a. Class stratification: Traditional Social Structureb. Confucian Hierarchical Orderc. Corporate Hierarchy/ Positions and TitlesIV. Korean Business Environmenta. Factors that influence business relationshipsb. Business and Entertainmentc. Negotiating stylesd. Decision making processesV. Customer ServiceC. Legal CultureI. Importance of contracts and rules in Korea and how Koreansperceive procedure and rules versus U.S.CommunicationsI. The meaning of “Yes” and “No”Dos and Don’tsObtaining a visa for travel to Korea
4:: OVERVIEW OF KOREA National Flag: Taegeukgi Symbolism of “Eum” and “Yang” (Yin and Yang) philosophy.The circle represents positive (red) and negative forces (blue).The four trigrams located in each corner symbolizesone of the four universal elements: heaven, earth, sun (fire),and moon (water)National Flower: Mugungwha (Hibiscus)Language: HangeulReligion: Influenced by Shamanism, Buddhism (47%),Confucianism, and Christianity (49%).
5::OVERVIEW OF KOREAGeography: The Korean Peninsula (divided into North and South/Republic of Korea) lies on the northeastern edge of the Asian Continent. Its bordering countries include China and Russia to the north and Japan to the southeast. Population: The Republic of Korea has 48 million people (2003).History:Dawn of Statehood was the first kingdom, Gojoseon, founded in 2333 B.C.Kingdoms and Dynasties ruled until 1910From :1945: Independence from Japan: Korean WarFirst President Syngman Rhee acted from 1958 until 1960Republic of Korea (South Korea) is a republic form of government.Currency: Won (KW1300=USD1.00)
6:: NORMS and VALUES Korean Values WHAT IS CULTURE? - Shared values, beliefs, behaviors, and experiences- Culture is influenced by history, religion, age, circumstances, economics,language, and education- Culture affects our decision making, how we behave, our perspective, and ourexpectationsHardworkorDedicationThe GroupConsciousPreservingRelationshipsSocial“Face”Hierarchy&Position6th SenseKorean Values
7:: NORMS and VALUES U. S . Values wasting time Not Self-reliance & IndependenceTake chargeOvercomecreated equal”“All men areThe AmericanDream“Say what you mean”Follow rulesPlay fair
8HIGH CONTEXT V. LOW CONTEXT CULTURES LOW CONTEXT HIGH CONTEXT ::HIGH CONTEXT V. LOW CONTEXT CULTURES LOW CONTEXT HIGH CONTEXTGermany JapaneseLOW CONTEXT CULTUREAddress business firstWords have more meaningValue expertise and performanceAgreements by specific, formal contractNegotiations are as efficient as possibleHIGH CONTEXT CULTUREEstablish social trust firstActions and other nonverbal cues have more meaningValue personal relations and goodwillAgreements by general trustNegotiations are slow & ritualisticUSA KoreaLow ContextHigh Context
9OVERVIEW OF RELATIONSHIPS: CLASS STRATIFICATION ::OVERVIEW OF RELATIONSHIPS: CLASS STRATIFICATIONTRADITIONAL SOCIAL STRUCTUREConfucius taught that everyone in society had a “role”.Yangban – Scholars, Officials, AristocratsChungin – Technicians and AdministratorsNongmin – FarmersSangin – Merchants and TradersGongin – Skilled labor (blacksmiths and carpenters)Chommin – Despised People
10OVERVIEW OF RELATIONSHIPS: ::OVERVIEW OF RELATIONSHIPS:CONFUCIAN HIERARCHICAL ORDER- Confucius taught that society is a reflection of the family unitFather / Son: Filial PietyRuler / Subject: LoyaltyHusband / Wife: Distinction and PositionElder / Younger: RespectFriends / Friends: Trust
11OVERVIEW OF RELATIONSHIPS ::OVERVIEW OF RELATIONSHIPSCORPORATE HIERARCHYEveryone has a role and position/titleThat role dictates the acceptable behavior between individuals (subordinate/superiors)verbal languagebody languageprivilegesPOSITIONS & TITLESAn individual’s position will determine how others relate to him/herWhere one sitsHow he/she is treatedIn business, Koreans will never address each other by first nameUse of last nameUse of title
12FACTORS THAT INFLUENCE BUSINESS RELATIONSHIPS: ::FACTORS THAT INFLUENCE BUSINESS RELATIONSHIPS:Blood TiesSchool TiesBirthplace and where one’s family comes from“Who you know”Family background and historyHistory with business society or individualsMethod of introduction
13BUSINESS AND ENTERTAINMENT: ::BUSINESS AND ENTERTAINMENT:Entertaining and socializing after work is an important component of “doing busienss” in Korea.Business is usually formalized during dining and drinkingKoreans drink considerably more than most WesternersA cup may be shared and passed among the “group”It will be your neighbors duties to keep your glass full/ you should do the sameIf you do not drink; it is acceptable to say you are on medicationThe person who is inviting or hosting usually pays/ “Going Dutch” is never doneKaraoke or singing is a common event during entertaining
14:: NEGOTIATING STYLES: Korean: Maintaining a good mood Preserving social harmonyThings can be worked out laterRemaining flexible and adaptable to changes (depending on circumstances)Emotions are used to persuadeAggressive bargaining as relates to priceLong termU.S.:PriceQualityTimingSomething for something/logical
15DECISION MAKING PROCESSES ::DECISION MAKING PROCESSESKorea:TOP DOWN, TOP DOWN (Hierarchy)Slow/impossible or extremely quickImportant to know who is making the decisionsDecisions are not always made on facts and data; relationships; circumstances; and other factors are consideredU.S.:Top down; however input is taken and consideredMatrixAuthority given at different levels of management / able to bypassDecisions are made on facts and data
16:: CUSTOMER SERVICE Customer is “King” In Korea: the “Top” customer is “King”“Big” customers are given prioritySuppliers will bend over backwards to make sure that their biggest customers are happyThe more you spend, the more attention and perks you are givenIf you are a supplier and you are “courting” a big customer, you are expected to do all things necessary to meet the needs of the customerCompetition for the “big” customer is fierceIn the U.S.: All customers are importantCustomer service is generally nondiscriminatoryThere are other fish in the seaNo matter who the customer is; there is no expectation to tolerate unfair on unreasonably treatment
17:: LEGAL CULTURE Korea: • Contracts are general guidelines, which are subject to change depending on the circumstances• Underlying relationships dictate behavior• Preserving a “good feeling” in the beginning is importantTip: Use Letters of Intent versus formal contracts at the start of the negotiating process.U.S.:• Contracts are the basis for relationships and are literally relied upon• Contracts are essential prior to beginning a business relationship and are given weight over circumstances; if the circumstances change, “too bad”
18MEANING OF “YES” AND “NO” ::MEANING OF “YES” AND “NO”Korean meaning of “Yes”:“I understand” or “I will do my best”U.S. meaning of “Yes”:“I will do it” or “I agree”Korean meaning of “No”:Koreans usually do not say “No”. Koreans usuallymake the circumstances unfavorableor avoid answering.U.S. meaning of “No”:Americans generally say “No”. Americans value being “straight forward” and not wasting time.
19:: Dos: Do understand the differences in communication styles Do build a relationshipDo use feelings and emotions to persuadeDo your homework with regards to the person’s position and role in the companyDo assess a situation /timingDo take the time to entertainDo use an intermediary or consultantDo expect to bargainDo try to eat the local foodExpect to partake in drinking, entertaining, and singingDress appropriately depending on who you are meetingDo pay attention to people’s business cardsDo ask personal questions (shows you are interested in the person)
20:: Don’ts: Do NOT criticize Do NOT throw objects (business cards, papers)Do NOT put your feet up on a desk or chairDo NOT wear your shoes into someone’s homeDo NOT make noises or faces and foods you do not likeDo NOT stick your chopsticks in your riceDo NOT joke and act informally in front of someone with a high ranking title during a business meetingDo NOT sign your name in red inkDo NOT use the telephone for important issues; face to face is preferredDO NOT overuseDo NOT project your cultural expectations
21The following information was copied from www.chicagoconsulate.org OBTAINING A VISA: GOTONOTE: U.S. CITIZENS MAY TRAVEL TO KOREA AND STAY WITHOUT A VISA FOR UPTO 30 DAYS; EXTENSIONS CAN BE GRANTED IN KOREA, IF NECESSARY.The following information was copied fromI. General Information Following is the general information for U.S. citizen's Korean Visa application. In principle, U.S. citizens need to have a Korean Visa to enter into Korea, but they can visit Korea within 30 days without the visa for the purpose of tourism or transient stop-over. Normally, it takes 2-3 business days to process a visa application. * The following items are required for all visa categories: 1. Valid passport and 1 copy of its personal data page 2. A completed visa application 3. A passport picture (2x2, color) attached to application 4. Visa Fee : US citizen $45 (non US citizen : check with visa section) * Money order only - pay to : Korean Consulate General - Cash accepted in person 5. Self-addressed, pre-paid envelope for return of the passport by mail 6. Foreign nationals with U.S. permanent residency : copy of Alien Registration Card (front & back)The category of Korean visa varies depending on the application's period and purpose of stay. The following is the detailed information about the frequently asked visa category.1. Short-term Visitor status(C-3) - US citizens who want to visit Korea for the purpose of tourism, academic conference, relative-visitation, religious ceremony, etc, within 3 months are required to apply for C-3 visa. - In case of US citizens, a 5-year valid multiple entry visa is usually issued. - This visa holder can stay up to 90 days at a time when he/she visits Korea - The necessary documents are as follows 1) Valid passport 2) Completed visa application form with photo attached.2. Short-term Business status(C-2) - US citizens who want to visit Korea for the purpose of business such as marketing research, business negotiations, pilot operation of export machines, etc, within 3 months are required to apply for C-2 visa. - In case of US citizens, a 5-year valid multiple entry visa is usually issued. - This visa holder can stay up to 90 days at a time when he/she visits Korea - The necessary documents are as follows 1) Valid passport 2) Completed visa application form with photo attached. 3) Notarized letter from the hiring company (content must indicate the purpose of the journey, references in Korea, guarantee of expenses, etc)
22::Q & AIf you are interested in executive or customized cultural business training as relates to South Korea, please contact Skye Suh at or