South Korea as a Diamond

A Unique People Koreans have a strong sense of nationalism. Unique language Korean-ness is defined by bloodline Importance of purity in one’s genes Koreans still have difficulties accepting foreigners or outsiders Homogeneous population Hierarchical society Aggressive warrior spirit

Potential to Shine Diamonds need to be discovered The waves of destruction during war made it difficult to discover Korea. Under the leadership of President Park Chung-hee, Korea shook off destruction and poverty to reveal that Korea could shine. Within a generation, Korea has become the 11 th largest economy. GDP grew from $82 in 1961 to more than $10,000 by 1995

History South Korea’s market is described by multinationals as “tough” because of the country’s history. Japan has left the biggest scars on Korea. Throughout history, China has been Korea’s biggest influence. (Culture “Confucianism”, Science & Administrative Practices) U.S Korean relations have been ‘ambiguous’ - U.S. approved Japan’s occupation of Korea - Victim of the Cold War in the 1950’s. Promise of Korean independence after WWII not kept. Instead Korea was separated between North Korea and South Korea.

The Discovery South Korea grew from one of the poorest countries in the world to become the 11 th largest economy in the world It started with President Park’s launch of an economic revolution 1) Government bureaucracy 2) Powerful conglomerates (“chaebols”) 3) Korea’s workers and people

Scenes from the Transformation This 3-minutes film footage was made by Burton Holmes, An American explorer and writer who visited in Korea in 1901 (and 1912). This is the oldest surviving film footage This rare 16mm COLOR(Kodachrome) footage of Seoul was filmed in March 1938, by Thor Wiestlandt, a Swedish diplomat who stayed in Japan from 1936 to s U.S. Army documentary on the Republic of Korea Historical footage of combat during the Korean War ’s Gwangju Uprising

Scenes from the Revolution Korea’s rise to a modern nation started in May General Park Chung-hee launched a coup d'état For General Park Chung-hee, national income and exports became a priority Exports were a “good thing’’ while imports weren’t In Park’s plan’s foreigners did have important roles as consumers of Korean goods, financial assistance and providers of advanced technology During Park’s reign, chaebols remained under tight government control Less than two decades after, Korea became one of the world’s top ten trading nations

Korea’s transformation since 1997 Power started to shift towards the Chaebols before the 1990’s Crisis hit Korea in Too much expansion - Companies struggled to service their debt - Korea’s key export industries collapsed (Hanbo Steel 14 largest conglomerate) - Korea’s economy collapsed Government made conditions for support more stringent IMF agreed to impose a ‘shock therapy’ on Korea’s economy Major restructuring with foreign consulting companies help

Korea’s Economic Reforms Restructuring Korea’s financial sector - Many banks were put under government ownership - Foreign capital was sought to dissolve bankrupt chaebols - Foreign direct investment was welcomed Labor market restructuring (lifelong employment was no longer guaranteed (Regulatory Restructuration) - In 1998, more than one million Koreans lost their jobs

Korea’s 5 Features 1)China 2)Chaebol Challenge 3)A New Generation of Companies? 4)Foreign Direct Investment? 5)Education Gap

China China’s rise is the most significant external change facing Korea today. Many challenges posed by China on Korea Economic challenge: The competitive challenge, Chinese companies’ quest to catch up to Korean Chaebols Political Challenge: Implication of China’s rise as a new superpower

China Partnership - Korea has established itself as the sixth largest foreign investor in China - China is Korea’s largest export and investment destination, ahead of the U.S.

China’s Competitive Challenge China state-owned companies have been going on a global buying spree worrying U.S. lawmakers on the issue of national security and corporate Korea based on the competitive threat. 1990’s China build 30 to 50 state-owned firms-partial resemblance to Korean chaebols.

The Political Challenge: The Rise of a New Superpower U.S. and Japan Alliance Korea has found it difficult to align themselves with them. Korea has become closer with China. Korea’s relationship with U.S. has its ups and downs South Korea still remains one of U.S strongest ally in Asia

Where will China Lead Korea China offers Korea opportunities, but at the same time Korea is at a danger of being left behind by the country. Korea needs to transform itself into a knowledge based economy Korea needs to transform itself into a integrated, dynamic, knowledge and service-driven economy.

PowerPoint picture page

Questions What will it take for Korea to become the most advanced country in the world? What does South Korea need to change to become more competitive on the global stage? What role have foreigners played in South Korea’s development?

Terminology Quiz Chaebol refers to a South Korean form of business conglomerate. They areSouth Koreanconglomerate government-supported powerful global multinationals owning numerousmultinationals international companies. Example: Samsung, LG Hyundai Motors etc. Diversification is a form of growth marketing strategy for a company. It seeks to increase profitability through greater sales volume obtained from new products and new markets.

Terminology Quiz Manufacturing is the use of machines, tools and labor to make things for usemachinestools or sale. Strategy is a plan of action designed to achieve a particular goal.goal Competency is a requirement for an individual to properly perform a specific goal. Competencies are characteristics which drive outstanding performance in a given job role or function. Example: John is a great engineer because he graduated fro Oxford University and worked three years for NASA designing government shuttles and space stations.

Terminology Quiz Restructuring is the corporate management term for the act of reorganizingcorporate management the legal, ownership, operational, or other structures of a company for the purpose ofcompany making it more profitable. Which companies need to restructure in Korea?