Understanding Korean Workplace:

Imitation to Innovation

SCHOOL OF BUSINESS ADMINKNU RIEBA INNOVATION CENTER

gwmoon@knu.ac.krMOON, GYEWAN

1960

1965

1970

1975

1980

1985

1990

1995

1997

1998

2000

2005

2006

0100002000030000400005000060000

Korean Economy

GNP per Capita ($)Population

Year

1960 1965 1970 1975 1980 1985

GNP per Capita ($) 79 3 253 594 1,597 2,242

Population 26,513

28,705

32,241

35,281

38,124

40,806

1990 1995 1997 1998 2000 2005 2006

5,883 11,472

11,237 7,477 10,88

816,43

818,37

442,86

945,09

345,95

446,28

747,00

848,13

848,29

7

Korean Economy

Critical Variables for Successful Enter-prises

1) Reliability2) Economies of Scale3) Quality & Design

Number 1 items in the world

• SAMSUNG ELECTRONICS (SEMI-CONDUCTOR – D-ram)-21%

• LG-DiSPLAY, SAMSUNG ELEC-TRONICS TFT-LCD)-46.5%

• HUMAX(SETOP -BOX)-11%• SAMSUNG SDI, LG

ELECTRONICS(PDP)-54%• HYUNDAI HEAVY

INDUSTRY,SAMSUNG HEAVY IN-DUSTRY(CARGO SHIP)-63%

• SAMSUNG ELECTRONICS,LG ELECTRONICS(AIR CONDITIONER)-22.3%

Emergent Action Rational Action Constrained Action

1

Winnin

g Stra

tegy

8Creative network

7Choice

6Entrepreneurial action

5

Visionary leadership

4Confusion

3Crisis

2Conservation

CURRENT STATUS OF KOREAN CORPORATION

(Data : Hurst (1995), Crisis & Renewal revised

IMF

RestructuringCore Comp.

CoP(Innovative Culture)

BusinessGrowth

Govt. & Industrial Policy

HardworkingKorean/ KoreanCulture

TechnologicalLearning

DirectionSetting

Key agents

Tools

Korean Company Growth MODEL

(Chaebol)

Industrial Policy• Direction Setting : Centralized Planning &

Effective Govt. Intervention• Selection of Strategic Industries : Heavy & Chemical Industry (1970’s), Electronic Industry (1980’s)• Special Industry Promotion Act :1969• Establishing Industrial Complex : Gumi Industrial Complex – Gumi Innovation Clus-

ter • Financing : German Loans – Divided countries, Compensation money from Japanese Occupa-

tion (600 million $), Vietnam War• Provision of Human Resources : Scholars

studied in the States, Japan, & Europe

Hardworking Korean & Korean Culture

• Neo-Confucianism 1) Education emphasized, 2) The clan in social & economic relations 3) Harmonious interpersonal relations 4) The pursuit of the highest good 5) Discipline

• Hardworking Koreans 1) the national trait of tenacity 2) “han” psyche = resentment 3) conditioning during school days 4) physical environment 5) “beat Japan” spirit 6) experience of deprivation

Protestant work ethic

Confucian Culture

Hard-workingKorean(90’s)Entrepreneurship

Personal drive for achievement

SmartKorean(00’s)

Knowledge-basedEconomy

GlobalCompetition

TRANSFORMING KOREAN

Technological LearningIntegration Of Two Technological Trajectories

Time

Fluid(emergency)

ProcessInnovation

ProductInnovation

GenerationImprovement

Assimilation

AcquisitionAssimilation

Improvement

Acquisition

Technology Transfer

Catching

Catching- upCountries

Technological Capability

IndustriallyAdvanced Countries

Rate Of Innovation

Time

Technology Transfer

Transition(Consolidation)

TechnologyTransfer

Specific(maturity)

Technological Learning

Existing Knowledge Base

Intensity of Efforts

Low

High

Reverse engineering

Low High

A chaebol is a business group consisting of varied corporate enterprises engaged in diversified business areas and typically owned and managed by one or two interrelated family groups.