CEO Guide to Doing Business in South Korea

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South Korea has a motivated and highly educated workforce that leads the world in a range of high-tech disciplines. Seven per cent of the country’s GDP is spent on education and 74 per cent of South Koreans undertake post graduate-level education.

You will find workers in South Korea to be disciplined, hard working and keen to undergo training. South Korea greatly values its workforce highly and is keen to attract high-quality skills from overseas. It has recently relaxed restrictions on visas for overseas workers. The organisation Contact Korea has Korean Business Centres in 29 countries around the world, dedicated to attracting talented people to work in South Korea.

Before doing business in South Korea prior appointments are required and should generally be made a few weeks in advance. The most suitable times to arrange a business meeting are normally between 10am and 12pm or 2pm and 4pm.

In South Korea for both social occasions and business meetings, punctuality is essential. Your South Korean counterparts will expect you to arrive on time as a sign of respect; therefore it is advised to call beforehand if you will be delayed. You may find however, that top South Korean business executives may arrive a few minutes late to appointments. This is a reflection of their extremely busy and pressured schedule and should not be taken with offence.

South Korea is known for its vertical social structure based on age and social status. The organisational arrangement of South Korean companies is highly centralised with authority concentrated in senior levels.

Influenced by Confucianism, South Koreans respect for authority is paramount in their business culture and practices. High-ranking individuals tend to have more power over their subordinates than in the West. Consequently, decision making in South Korea will follow a formal procedure in which senior approval is necessary.

Generally speaking, responsibility is delegated to trusted, dependable subordinates by their superiors. Therefore, it is imperative not to offend or ignore the lower ranks and to show the various managers the same respect as other senior levels.

Age is the most essential component within a relationship in South Korea. A person older than you automatically holds a certain level of superiority. This is particularly evident in South Korean business settings.

Personal ties in South Korea, such as kinship, schools, birthplaces etc, often take precedence over job seniority, rank or other factors, and have significant influence over the structure and management of Korean companies.

The exchange of business cards in Korea is vital for initiating introductions. Korean’s prefer to know the person they are dealing with. Therefore, it is important to emphasise your title so that the correct authority, status, and rank is established. It is advised to have the reverse side of your card translated into Korean. Cards should be presented and accepted with both hands and must be read and studied with respect and consideration before placing them on the table.

Like most Asian countries, South Koreans believe that contracts are a starting point, rather than the final stage of a business agreement and prefer them to be left flexible enough so that adjustments can be made. Although many Koreans now appreciate the legal implications regarding the signing of contracts, they may still be interpreted as less important than the interpersonal relationship established between the two companies. It is vital that you are aware of how your Korean counterparts view these documents in order to avoid any possible misunderstandings.

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