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Doing Business in South Korea (with description)

Flag of South Korea
Greetings: Koreans appreciate a show of interest in matters that are important to them. They appreciate a foreigner's effort in expressing a hello (an-yang-ha-say-yo) or a thank you (gam-sa-ham-ni-da) in Korean
Doing Things the Traditional Ways: The tradition ways of thinking, in many areas, are still practised in Korea. Family and hierarchy are highly respected. Extended families (three generations living together) are still practise although this is rapidly changing. In most of the cases, the father is the sole bread owner while the mother stays at home. The economic necessity, social concept and cultural desire of a dual-income family are still in their infant stages.

The majority of working woman, many with university degrees, are not given the chance to work upwards in the organisational hierarchy. Most of them are engaged in secretarial jobs, assembly or educational work.

Koreans have a great respect for anyone senior in age, and intuitively establish their hierarchical position relative to others based on age.

Generally, a man receives more respect and affinity in the business world than a woman. Foreign businesswomen (especially, non-Asian looking women), however, are accorded almost an equal amount of respect as foreign businessmen.

Single women generally receive less respect than married women whose ties to their husband oftentimes establish their position in society. Foreigners are generally exempted from the above societal classification system.

Marketing Strategy: Companies that wish to introduce their produces and services into Korea may wish to take into consideration these family roles when marketing to Korean consumers. Also, companies that portray themselves as equal employment opportunities (EEO) employers are likely to attract highly qualified female employees.
Business and Social Customs: Foreigners should be ready to mix business with pleasure as the Koreans base their business relationships on personal ones. The heavy drinking of the Korean alcohol, Soju, beer, or other liquor helps to establish a personal, business relationship.

Business associates often go to an establishment to drink and sing along to a video machine playing music ("no-ray-bang"). As most no-ray-bang machines come equipped with songs in English, you may want to be prepared to sing at least one song so as to gain social favour with their Korean counterpart.

The Korean historical relationship with Japan, which made a virtual colony of the Korean peninsula, is a sensitive issue. Therefore, any comparative mention of Japan versus Korea, where Japan has the upper edge may harm a business deal.

Harmonious Relationship: Korea still observes Confucian ethics based on a strong belonging to a group. They often think in group terms, (i.e. what is in the best interest of the group and how can I help to maintain harmony within the group? ). Hence, the majority of Koreans are intensely patriotic, calling Korea by the term, "oo-ri-na-ra," (our country). With that in mind, the benefits to the group, whether it is to the company or country, should be persuasively put forth in order to close a business deal.

Relationships are important. Koreans want to do business with people with whom they have formed a personal connection. As alumni contacts are a major source of networking in Korea, a particularly well-connected Korean will have attended a prestigious Korean university like Korea University, Yonsei University, Seoul National University or Ehwa Women's University.

Exchange of Business Cards: The exchange of business cards is very important. It helps the Koreans to learn about the name, position and status of the other person. Koreans will generally meet to discuss business with persons of the same, parallel rank as they observe a very strict hierarchical code.

One should always be ready to exchange business card (preferably bilingual) and treat the exchange of Korean counterpart's card with respect. (It is a sign of respect to receive and present items with both hands, followed in business etiquette by passing and receiving a card with the right hand.

One should never give a card, or anything else for that matter, with the left hand as it shows disrespect). For historical reasons, Chinese characters, which Koreans can generally understand, are often regarded as more sophisticated. Thus, a business card written in Chinese characters can kill two birds with one stone if a business trip to Korea and China is planned.

Most Koreans have three names. These names usually follow the Chinese pattern of a surname followed by two given names. In addressing Koreans, foreigners should observe the use of surnames (e.g. Mr. Lee, Ms. Kim), using formal titles if possible (e.g. Dr. Soong, Director Park).

Doing Business with Koreans: Negotiating style is particularly important. Koreans can prove to be subtle, effective and often rigid negotiators.

Westerners attach great importance to a written contract which specifies each detail of the business relationship. Koreans, however value a contract as a loosely structured consensus statement that broadly defines what has been negotiated, but leaves sufficient room to permit flexibility and adjustment.

The Korean Government has attempted to address this dual perception by formulating "model" contracts for licensing technology and other business arrangements. Both parties must be assured the obligations spelled out in a negotiated contract are fully understood.