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Corporate Structure

Corporate Structure

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The corporate business structure reflects the country’s vertical social structure in that age and social status are immensely important:  

  1.  Korean companies are highly centralized with authority concentrated at the senior levels.
  2.  Respect for authority is an overriding value in the country’s business culture and practices. The higher-ranked members of the company have a great deal of power over their subordinates, significantly more than in Western countries. 
  3. Power over subordinates is not limited to the workplace nor to official business hours.
  4. Decision-making in a corporate structure generally follow a formal (and for many Westerners time consuming) procedure in which approval from the top must be obtained. Nothing happens until that approval is given.
  5. Once a decision is made, responsibility for execution is delegated to subordinates by their superiors. The lower-ranks are often the ones who make or break a policy through the manner in which they choose to interpret or implement it.
  6. Korean employees are very loyal to their superior. They will do their best to ensure that their immediate superior’s kibun (face) is protected, which sometimes puts them in conflict with the long-term best interests of the company.
  7. The importance of age in Korean society is reflected in business as well. Most moves up the corporate ladder are based on age and seniority within the company. Although there have recently been a few situations where executives have been younger than their subordinates, it is still an extremely rare occurrence here.
  8. Korean companies generally do not hire based on merit, although it is happening more often..
  9. Women have not traditionally been part of the corporate or white-collar business world (service industry business owners or managers, yes) but age and rank generally outrank gender, which does make some women’s experiences easier.
  10. That said, personal ties such as kinship, school, birthplaces, etc. often take precedence over job seniority, rank and other factors and have significant influence over the structure and management of Korean companies.
  11. If a Korean is given the choice of hiring a person from his alma mater or someone better qualified or more experienced who is not, the former is the most likely to be the successful candidate. This is why you may find yourself surrounded by people who all attended the same university, often the one from which the company’s president or CEO graduated. 
  12. It is important to maintain the respect due to rank in matters that are not business related. It is generally accepted that one would not own/drive a car of greater size or value than that of one’s superior nor would one live in a bigger home in a better neighborhood than his.

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Last Updated on 2022-02-25

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