Are we reaching a tipping point in Korea?

[KevinTeacher84]

I was reading today how the Korean police stepped in and dismantled a labor strike at a Hyundai subsidiary in the city in which I teach. It reminded me of a discussion I had with some adult learners a few years ago, in which I was surprised to learn that not only do Korean auto manufacturers charge more for their cars domestically, but also tend to lower the quality of both the product itself and the corresponding customer service.

For example, the U.S. version of the Hyundai Sonata comes equipped with 6 airbags, while its Korean counterpart only has two. All American sold Hyundai and Kia vehicles feature an internal Tire Pressure Monitoring System, but in Korea this valuable utility is only offered amongst a costly package of options. And Koreans are paying an exorbitant amount more for a domestically produced product: the Genesis in America, with its greater set of standard features, is an astounding 10,000,000 won less than the model sold in Korea.  It's so bad that people are buying "re-imported" Hyundais and Kias, basically cars destined for America that are driven off the boat, slapped with a bunch of fees, and then sold for slightly less than the domestic model with the corresponding features.

Here are two eye-opening articles on just how bad the domestic consumer is taking it on a wide range of products:
http://www.knutimes.com/news/article.html?no=1207
http://www.koreatimes.co.kr/www/news/biz/2010/03/123_63008.html

This is not to mention the low wages and long hours that has historically plagued the domestic workforce. In 2005 the gross average income for an engineer in Korea was 2.5 million won a month.  Koreans also work on average about 500 hours more per year than their American and Canadian counterparts. And I can tell you from talking to my Korean friends, that most are lucky if over the course of the year they even get time for a long weekend to Jeju.
http://www.worldsalaries.org/korea.shtml
http://www.everydaymoney.ca/2010/05/south-korea-dwarfs-canada-in-hours-worked-per-year.html
http://www.forbes.com/2008/05/21/labor-market-workforce-lead-citizen-cx_po_0521countries.html

So do you think Korean society is reaching its boiling point? I feel that as more Koreans travel abroad for education, and see the more fulfilling lives people are leading in other parts of the world, they are becoming less and less willing to accept the status quo. People are no longer willing to blissfully submit to whatever the chaebol deem necessary for the good of the nation.
I have a friend working at a Hyundai subsidiary who recently decided that he was sick of the 6 days a week, 12 hours a day routine at his company. For the past month he has been arriving at 8:30 and leaving at 5, and cheerfully tells his incredulous boss every Monday that no, he in fact wasn't at work Saturday. Although this is a pretty extreme case, I do believe such confrontations are less anomalous than even 5 years ago, and maybe the perception of Koreans as submissive, machine-like workaholics  will be a thing of the past.

[jih]

You bring up an interesting point.  I think in many ways, though of course not all, looking at Japan is a glimpse of Korea's possible future.  I don't think the entire concept of loyalty, sacrifice, and team will go away.  Nor do I think that the longer hours or less vacation will become equivalent to their western counterparts.  But as Korea gets more internationalized and more of its citizens experience the world outside of Korea, I think certain concepts and ideas will change or soften. 

The last statistic I read was that Korea for a modernized country worked the longest average hours for the least amount of salary and that its children spent the most hours at school or academies but that its scholastic achievements and output were not #1. 

But like Japan, Korea has stuck to a model that's worked for it.  And there's no denying that Korea's rapid ascension to a modern economic power has been spectacular since the Korean War.  Now that Korea has matured and it's old business model has become dated, it's in a state of transition.  What worked to get here, won't necessarily work to keep it here or improve.  And like Japan, Korea has thrown its weight behind technology to lead it into the future. 

It'll be interesting to see how society here changes.  By nature, to be nimble in technology, requires progressive, radical, and outside the box thinking.  From my experience, Korean culture tends to be more conservative then Japan.  While Japan has become an innovator in some areas of design, fashion, pop culture, Korea by far and large follows others and makes refinements. 

[ToniV]

This is an awesome topic!

This is a generalization, but Korea, like many Asian cultures have a hard time innovating. "Imitation is the highest form of flattery" is a very interesting concept for me for Korea. You can see "imitation" in so many things here instead of innovation, from make up to cars to kpop. Like a previous poster said, it will take a radical and outside of the box kind of thinking to revamp S. Korea into a real international player.

Even China, where most of the world has been migrating their manufacturing companies is notorious for imitation. And, even though China has been trying to position itself as a much more influential superpower, it still lacks. Korea doesn't have the same lure as China, it will take Korea 10x as hard working power to achieve more than a nudge in power. It will have to rely on aligning itself with other superpowers to get itself heard. Don't get me wrong, Korea does have it's achievements, but for it to gain the same level of recognition as other bigger players, it has to lose so much of its roots and I dont think that Korea is going to be ready for that in the near future.

It's growth in the last handful of decades has been amazing, but with that said, it's like a child that grew too tall too fast and dont know how to really control its body's movements. So, until the older ajusshi and ajunma population dies out, the link to their past is way too strong to be put aside in order to grow more competitively. The younger generation, the 20s and 30s who are rising into powerful positions are still governed by the older generation who is still very rooted in their very strong history and cultural traditions. Maybe, with two or more generations of the workforce, Korea can find itself in a more radical thinking box.

[NMonk]

Great topic.

I think things in Korea are starting to change, and I think that is absolutely inevitable. I mean, the amount Korea has 'developed' economically (from our Western point of view) in the past 50 years is completely unprecedented. I eat dinner every Monday with an old, extremely well traveled Korean man (he loves telling me stories about the war, and I find them interesting to listen too). Anyway he was explaining to me this week how Samsung has been forced to completely change the way it treats and deals with it's employees. He said this was because so many Korean people are now going abroad for business, and seeing how businesses treat their employees, that the Korean businessmen were coming back and demanding the same and this spread right through the company.

I also remember my girlfriend telling me that until very recently Samsung and Hyundai were considered terrible companies to work for, and that a lot of Korean people, although proud of what the companies have achieved, detest them, because of things like you have mentioned here O.P. This kind of thing doesn't just apply to cars either, most Samsung products are more expensive and inferior to the exact same model sold in the U.K (I know this from when I bought a laptop and a T.V).

I think Korea may have reached a point where it can no longer develop economically at the same rate as the past 50 years. Things are slowing down here. As economically things slow down cultural "development" will inevitable catch up. I do think many young people, especially in Seoul, are starting to demand more and expect more, and are willing to break the status quo.

[hankmcmasters]

The price of daily necessities like cookies, drinks, and noodles have risen sharply, and the rate of price increase exceeds that of imports by ten times.  this is from http://www.knutimes.com/news/article.html?no=1207
cookies are necessitites?

its kind of a chicken-egg scenario with the cars. if korea didn't shelter its market like it does, it never would have built a company like Kia or Hyundai that is able to compete in the world car market.  i'm pretty sure the same goes for mobile phones.  certainly there are companies taking advantage of this, but on the whole i think it has worked for Korea.  maybe if i owned a car i'd think differently, though.  i'm pretty sure that the main sticking point in the FTA with the U.S. is over Korea's sheltered car market.

and technically, if things have different specifications, then they arent really the same model, at least not in my book.

[ichiro]

korea has a culture of inefficiency.

young people are the ones who think out of the box, who will take risk, and create change. the fastest growing new companies in the US are run by 20 and 30 year olds.

in korea however, because of the culture, young people can't challenge old timers who are set in their ways, this leads to the continuation of inefficient outdated practices, and is one reason why koreans have to work much harder than other countries to get the same results..

[NMonk]

and technically, if things have different specifications, then they arent really the same model, at least not in my book.

Well, they had the same model number!!!

[pr1ncejeffie]

I remember reading about Korean business when I was finishing up my Business degree... I don't remember who said this but I'm pretty sure it was George Soros.  He or this famous economist asked, "What was the difference between 1 Korean to 100 Korean?"  None.  If you hire one Korean and ask him to get this project done by this date, he will get it done.  If you ask 100 Koreans to do it together, and finish THAT SAME project by that same date, they will get it done by that date.

He is basically saying, Koreans will not do more than they need to.  Yes, they work long hours but are those hours efficient? I'm sure they could have cut half of those hours if they work effectively.  Unfortunately, it ties into Korean culture where age rules the system. 

If Korea wants to play with the rest of the world, they better learn how to keep talent in their country or that talent is going to leave for a better payday, better hours, and a better title.  Western countries are more than willing to take a talented 30 year old and put him as a manager than a Korean company.  If Korean companies don't want to do that then they will suffer the consequence.

[Death Walrus]

this is interesting. thanks for the research.
i'll use this in my teacher class.

[Rustyflop]

I was watching an interesting news clip about the Korean workaholic mindset, and how the government was trying to change that. A few intersting points it raised:

1. many Koreans don't want long holidays. Many companies have to force their employees take a break.
2. Even though koreans work so many more hours than people in Europe, for example, their efficiency is at 27% whilst in Belgium it's 78%

[Rustyflop]

Here's the clip: http://www.youtube.com/watch?v=53kRanz5jfo

[hankmcmasters]

thats a decent clip.

i once saw some marginal productivity numbers for rich countries, korea's were the worst by far.  but i couldnt find them.

the nice thing about everyone working all the time is how convenient everything is.  gs mart, family mart, etc.
but even at my school.  yesterday i forgot my keys a work, but only realized it at 8pm.  by the time i made it back to school it was 8:30, and there were two people still in the office.  i dont think they were actually doing anything, but it was nice to be greeted with a smile.  i dont think these reports mention that always having someone on stanby has a lot of benefits, too

[timidkoreanboy]

There are actually a number of different issues you raise here, so I'll weigh in on just a few of them:

1) Oftentimes the "irrationality" of domestic consumer behavior (i.e. paying more for products made for the domestic market vs. foreign markets) is encouraged by a great deal of marketing (which is often indistinguishable from urban "word of mouth" myths) about the high quality of domestic products over foreign ones.  For example, the ridiculous hubbub over mad cow's U.S. beef was not some grassroots movement, but politically and economically funded and motivated.

While I would agree that with greater globalization and the spreading of IT these propaganda campaigns designed to control domestic demand will become less effective, I actually think there's a better chance that firms will change their marketing strategies.  In other words, let's not hold our breath that suddenly Korean consumers will be treated better.

2) The labor market has traditionally been even MORE tightly controlled than consumer demand-- and in Korea keeping labor submissive and wages low was one of the core engines behind its economic development.  Everything from the education system, to the constant threat of war, to compulsory military service, to union busting, to family relations, to cultural control via the reinvigoration of neo-Confucian values, and the list goes on and on, were mobilized to ensure this single cause.

Clearly, as you point out, this model is outdated and laborers in general are chafing, but a transition to a more "open" labor market that rewards productivity, innovation, etc. requires alot of things to happen right:

a) There need to be much more attractive options to a traditional firm job at a jaebul.  And frankly, to date they simply are not. 
b) The education system needs to be completely retooled.
c) Cost of living must stabilize, so the pressure to work can be put into more reasonable context.  For example, the ridiculous cultural practice of having to own a home to be considered normal needs to be done away with.  Either that or the real estate pricing bubble has to burst (but this, in turn, would also suck badly for everything else economic)
d) Chaebuls themselves have to remain inflexible. For some reason I'm a believer that once chaebul sense that they are at a crisis level, that they will adjust labor and management practices to lower and contain discontent.

[KevinTeacher84]

http://online.wsj.com/article/SB10001424052748703382904575059120514572794.html
Here is an article in the Wall Street Journal about vacation shirking. I think the problem isn't that Koreans would rather not take a vacation, but that they are concerned about how such a dereliction of duties would look to their coworkers, and more importantly, their bosses. Unless they see the boss dressed in a golf shirt and shorts, headed out of the office with a golf bag strapped across his back, they would never think off doing such a thing. My friend wasn't told he had to work Saturdays, but its silently understood that if he were to decide to take a 2 day weekend, well, he could forget any chance of ever getting promoted. The boss is there every Saturday. Just how committed are you if you are actually willing to work less than your superior?

[Incredagogue]

I remember reading about Korean business when I was finishing up my Business degree... I don't remember who said this but I'm pretty sure it was George Soros.  He or this famous economist asked, "What was the difference between 1 Korean to 100 Korean?"  None.  If you hire one Korean and ask him to get this project done by this date, he will get it done.  If you ask 100 Koreans to do it together, and finish THAT SAME project by that same date, they will get it done by that date.

He is basically saying, Koreans will not do more than they need to.  Yes, they work long hours but are those hours efficient? I'm sure they could have cut half of those hours if they work effectively.  Unfortunately, it ties into Korean culture where age rules the system. 

There is actually quite a bit of research that suggests that we all scale our productivity to fit the time in which we are allotted to complete it. This is not a "Korean" phenomenon, it is a human one.

[pr1ncejeffie]

KevinTeacher84... you make some great points...

I also want to point out American thinking as well.  Americans usually have 2 weeks of  vacation per year not including holidays.  A study shows that around the 8th or 9th day of their vacation, Americans start to get a bit antsy, they are bored or the need to go back to work because they feel that they are well rested and ready to get back to work.  Unfortunately, we don't know how to "relax". 

I do believe Koreans think and feel  the same way as Americans when it comes to vacation.

[pr1ncejeffie]

I remember reading about Korean business when I was finishing up my Business degree... I don't remember who said this but I'm pretty sure it was George Soros.  He or this famous economist asked, "What was the difference between 1 Korean to 100 Korean?"  None.  If you hire one Korean and ask him to get this project done by this date, he will get it done.  If you ask 100 Koreans to do it together, and finish THAT SAME project by that same date, they will get it done by that date.

He is basically saying, Koreans will not do more than they need to.  Yes, they work long hours but are those hours efficient? I'm sure they could have cut half of those hours if they work effectively.  Unfortunately, it ties into Korean culture where age rules the system. 

There is actually quite a bit of research that suggests that we all scale our productivity to fit the time in which we are allotted to complete it. This is not a "Korean" phenomenon, it is a human one.

You are right.. its not a Korean phenomenon but its more pronounce in Korea.  It's basically collectivism vs. individualism and the way Korean life follows the Confucius society.  If 100 workers do the same amount of work that will get the job done by X time then its a successful project.  No one gets called out for being arrogant and trying to "show up" their fellow co-worker if 1 worker finishes his work faster, more efficient than the other 99. 

In America (not every company), there are still individualistic behavior in a team oriented project.  Is that a good thing?  Depends on how you look at it.  If this one person can handle more projects and do it in an efficient time then he is being look upon as someone who might be a future manager for the company.  OTOH, he might be looked as an arrogant snot who is trying to show up his co-workers by doing more than everyone and he is sucking up to the boss.

Basically, what I'm saying... Korea can keep doing what they are doing because its been a successful model but in the global era where the world is getting smaller, they will lose some of their top talents if they think age and experience is the only thing that will keep a successful company running.

[Eros]

I just want to echo two points made above:

1. The older generation are the law and it's holding back the younger more creative and able generation; and

2. Koreans are physically at work for long periods but they don't always work during this time. If they were more efficient, they could radically cut their working hours. Food sharing is the main culprit.

I'm English and I think that the old Soviet Union is responsible for the state of North Korea and America [and I say this with gritted teeth] is responsible for the state of South Korea. I.e Korean media and businesses etc etc. The South have a lot to be grateful for in respect of the US influence.

[pr1ncejeffie]

a) There need to be much more attractive options to a traditional firm job at a jaebul.  And frankly, to date they simply are not. 
b) The education system needs to be completely retooled.
c) Cost of living must stabilize, so the pressure to work can be put into more reasonable context.  For example, the ridiculous cultural practice of having to own a home to be considered normal needs to be done away with.  Either that or the real estate pricing bubble has to burst (but this, in turn, would also suck badly for everything else economic)
d) Chaebuls themselves have to remain inflexible. For some reason I'm a believer that once chaebul sense that they are at a crisis level, that they will adjust labor and management practices to lower and contain discontent.

a.) Agree, but going from cradle to retirement is their long life dream. This is how the 50s and 60s work in America.  You work for one company and then you get that gold watch when you retire.

b.) I disagree... I think Amy Chua (Author of Tiger Mom) made some really great points during her interview with Bill Maher in "Real Time with Bill Maher".  Basically what she is saying is... western education and eastern education must meet halfway.  Creativity + rote learning = winning situation

c.) I agree, Koreans seriously follow this saying... "Keeping up with the Kims, Parks, and Chois" and it has to stop.  But then again, in the 1950s it was basically that way.  You get marry, you buy a house with a white picket fence, live in suburbia, trying to keep up with the Joneses (neighbors), drive that nice cadillac and so on. 

I believe that the Koreans are like the 1950s America. 

[k.l.]

This is a fantastic topic and I wish I had time to share all my own insights. I view it like this..at a tipping point? No, the domestic industry is too strong currently. One needs to only look out their window at the mega-construction projects going on despite the vacant apartments/construction company problems. Compare this to other countries where it takes years just to debate over and finally agree on a construction project.

Korea has some archaic systems in place for many styles of management. Older bosses trying to run their office like an army camp. No input from workers, etc. etc. I worked in a Korean office for a few years and it was....different....to say the least. Is this system good or bad? Well, it's working so far.

This comparison is just my own personal feeling, so please don't take any offense. My home, Canada, and the US to me feel like Rome on it's downward slide. Things have become stagnant and people are not really moving past the age of decadence. I love my home but if I go back a year or five from now, nothing changes. I wish people had the drive and much of the red tape that is holding things back now was cleared up. I will just make a simple comparison to make it clear. Applying for work in Canada. It takes months, interview after interview and having to wait months more to hear the result of a job interview if it is successful or not. My wife, Korean, has changed jobs a few times over the years. Jobs are posted, she applies, gets an interview...goes to the next stage interview...has lunch or dinner with the office and then gets hired on as a vice-manager. The times that I have seen her do this amaze me so much compared to going through headhunters, recruiters, multi stage interviews and so on.

I know, you can critisize me for my opinions, but I have worked both at home and overseas a long time. I just think the economy at home is just sluggish in more ways than one and I enjoy the rapidity of business over here more.