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Doing Business in South Korea–The Straight-Shooting Guide

Doing Business in South Korea–The Straight-Shooting Guide

April 2, 20121234Views

Editor’s note: Over the past months 3WM contacted several business consultants and individuals with experience navigating the Korean business jungle and asked them to put together a piece of candid, staight-shooting advice for those doing business or planning to do business on the peninsula.

Type ‘Doing Business in South Korea’ into a search engine and you are hit with an avalanche of largely the same responses. There are pages upon pages of ‘Must do’ lists of ten to fifteen points, or private business consultancy firms willing to set you up in your chosen field on your behalf, offering a wealth of knowledge in exchange for a wealth of cash. The ‘Must do’s’ invariably and repeatedly revolve around informing the reader that Korea has long been a Confucian-based structure and that elements like age, respect and adhering to one’s superiors are the way forward. The consultancy firms will inform you that the market can be hard to penetrate, but sure enough they know and have the how-to.

Then there can be found entries into wide elaboration on social customs all about how to pour a drink and the kind of subjects to talk about.

Whilst you can find both books and websites that explain an ‘Understanding of a country’s business’, ‘information about business culture… to help you interact more effectively’, ‘Social Culture training courses’, and a ‘guide to… key aspects of undertaking business’, the advice, as previously mentioned appears to be largely the same thing on repeat.

So to save you the time of bothering, here is what you will be told:

Carry business cards, carry a Korean-language biography of your life, adhere to rank and file like a tool, go drinking a lot, do not ever question senior business leaders as obviously they all know exactly what they are doing, understand that people will rarely say “No” to you even if they have absolutely no clue as to what they are talking about and do not worry too much about notarized contracts because it is all about personal relationships.

This is obviously utter crap. When you hire a competent consultancy firm the one thing that they will be able to do, that you will not know how to do, is convince your new-found market workers to do things through their own networks. If, however, you don’t have a spare liquid $50,000 up your sleeve, it is highly possible to do this for yourself.

For those out there who have emigrated from their Mother Land with aspirations of taking advantage of the many, many wonderful market possibilities open in South Korea, you would be wise to pay attention to the following information:

There is a very good reason that South Korea lists at 23 among the 31 OECD Member Countries in relation to labor productivity per worker head. According to 2011 report filed by the South Korean Ministry of Knowledge and Economy, based off of the results from the Paris-based Organization for Economic Cooperation and Development, Korea’s labor productivity in the service sector ranked at 18 out of 19 surveyed countries. Hourly productivity came in at 28 out of 30.

This is due to what is endearingly known as TKO, or Typical Korean Operation.
So here are, to add to the lists kicking around in print about how to operate successfully within the market, some other points that you may wish to consider. Every point has been taken from the personal experience of those working as either a professional, a self-employed tradesman or a consultant, in South Korea.

1. If you expect something to be done, just assume that there is no chance in hell of it being done correctly the first time.

2. Get yourself an excellent, somewhat corrupt legal team. Get them drunk regularly and pay for their debauchery. The definition of Corruption in the West is very different to the definition of Corruption in South Korea. For instance, if you were to file a police report in South Korea over theft of company finances from a third-party, or the loss of millions of Won due human negligence, you might expect a competent investigation to take place. It probably won’t happen–more likely you will be asked to ‘settle privately’ (extort money from the subject with the threat of a hypothetical prison term in the event that they do not pay up) without any legal interference. Cue legal team.

3. Do not take long-winded nonsense for an answer. Many people will try and fob you off once they have made a mistake. Call them out on it and if you know that it has happened before you meet with them, turn up with an attorney. That works.

4. Always take a translator to every meeting you ever attend. A male for meeting men, a woman for meeting women. The men respond better to a man that they have never met whispering in your ear than a woman. The women, in turn, seemingly respond better to women. Why is not relevant.

5. Go and befriend, then get drunk with, a policeman, a soldier and a doctor. Then give them some money or buy them an iPhone (honestly) and on the whole they will make strategic phone calls on your behalf should you ever need them. Probably using their new iPhone.

6. Conduct all decisions internally and inform anyone working with or for you that if they do not do exactly as they are informed, they will be cut. Otherwise shit just does not get done.

7. When engaging in a business deal, write your own contracts and have them notarized and sealed at a government office, with a clause that if they discuss any information enclosed they are liable to criminal prosecution. This process is surreally long-winded in South Korea and tends to upset people as they then perceive you not to trust them. You are not here to make friends, just do it as it seems to strike the fear of God into them. Cue legal team.

8. Remember to send people bottles of whiskey. A highly effective technique.

9. Do not bring your Korean girlfriend out with you to a business dinner. She will largely be subjected to abuse, in private, behind your back.

10. Learn to understand Korean. Then speak in English. Open all dealings with “You speak Korean and I will speak English”. Also seems to work and puts your new acquaintance on the back foot.

11. When going out to dinner, pour your drinks any which way you like as honestly, deep down, no one cares about the façade. They will tell you this once utterly legless.

12. Invest in a Dictaphone and run it from your pocket when in meetings.

13. Remember that many of the very important looking people, both Korean and Expat, can be found in girly-bars, drunken and red-faced at 0230 lecherously rubbing their sweaty palms on the thighs of girls the age of their daughter. A bit of leg work and a pack of batteries go a very long way. The next time you see them they will be very polite to you.

14. A lot of internal market analysis that takes place in South Korea tends to overlook that many of the internal products (aside from the televisions) are of very poor quality. Assume that if you hire someone to build a building, or really anything structural, it may fall down quite soon. Thus always employ the ‘Measure Twice, Cut Once’ principle. This may involve a five hour argument with a Korean architect. Bring your own external engineer to explain why. The same applies to electrics.

15. Brown envelopes full of cash go a long way.

16. Do in fact hire a highly professional, external investigations firm to take a good hard look at anyone that you even contemplate working with, alongside or near. There are more skeletons hidden per square mile than you can shake a bony arm at, and they make for good negotiating points.

17. Never forget that if it’s a Chairman’s birthday, his subordinates will not take bad news to him on that day. Even if there is a vast loss riding on it. Walk his employees to a bank as from personal experience they would rather pay the loss themselves.

18. Always carry a fountain pen and offer it up when a writing implement is needed. You would be surprised how many people who take themselves very seriously do not know how to write with one.

19. Koreans will largely not be on time, Korean time runs at an average of 20 minutes late to any time frame given. On the whole, people will additionally be too proud to admit that they have fucked up.

With this information we hope that you might not get quite the inevitable shock that so many people do when thinking, “That looks like an easy market to hit”. That said, if the place was not as questionable in places as it is, the opportunities would not be there.

Good luck.

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The authors are a Risk Consultant, a jack-of-all-trades and a businesswoman residing in Korea. You can forward any questions via 3WM at 3wmseoul@gmail.com

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