Identifying and Handling of Managerial Issues in a South Korean and American Business Cooperation

Essay, 2018

7 Pages, Grade: 1,1


1 Introduction

"Knowledge is [...] power when it comes to global business." (Steers et al., 2017, p. 29). Keeping that statement in mind, the objective of the following essay is to transfer and strengthen the knowledge about cross-cultural theories and dimensions in order to benefit from global business. In particular, this work will focus on a South Korean and American business cooperation.

The comparative analysis of those countries is highly correlated to the context of global management (Steers et al., 2017, p. 64-66) and divided as follows: In the first part, the cultural environment and key national cultural differences will be illustrated. Based on those identified differences, potential managerial issues driven by situational contingencies in business context will be highlighted in the second part. The third part of the analysis will focus on ways in overcoming those cross-cultural issues in order to benefit from this specific cross-cultural cooperation.

2 Comparative Analysis

2.1 Contrasting key national cultural differences

In order to contrast the key cultural differences between South Korea and the USA, it is necessary to clarify what culture means in that context and why it is essential to understand it as a manager. According to Hofstede, culture can be defined as the "collective programming of the mind that dis­tinguishes the members of one human group from another." (Steers et al., 2017, p. 115). If managers are able to recognize the cultural key elements of the different "human groups" they are working with, they will therefore be able to adjust their behavior towards the members of those groups lead­ing to an ideal cross-cultural cooperation (Steers et al., 2017, p. 116).

In literature, a large variety of models with different focuses in describing and distinguishing cultures exist (Steers et al., 2017, p. 122). Comparing and combining those models, five common dimensions could be identified in helping global managers to understand cross-cultural business (Steers et al., 2017, p. 128/129). To compare the South Korean with the American culture, three of those core cultural dimensions will now be illustrated.

1.) Power distribution: In South Korea, a system of high power distance and hierarchical thinking dominates which regulates how power and authority are allocated in their society (Lee, 2012, p. 186). This belief system can be attributed to the Confucian values of the Korean society. Those values are reflected in respecting authority, being moderate and humble as well as a strong loyalty to the collective (Yun, Rodrigues, Tirmizi, Askam, Steinberg, 2017, p. 1-2). In the United States, the level of power distance is low, and the culture is based on the concept of equality. Authority and respect are not based on the Confucian values however they are based on the belief in accomplishing the "American Dream". The more an individual has achieved, the higher the respect from the society (Lee, 2012, p. 187; Engel, Szerlip, Watson, 2001, p. 41).

2. ) Uncertainty and social control: "Koreans negotiate relationships, not contracts." (Hynson, 1991, p. 19). In South Korea, uncertainty is trying to be reduced by a relationship-based ap­proach. In order to establish and maintain a strong working relationship, trust needs to be built up through personal relationships (Lee, 2012, p. 188). In contrast, a rule-based relation­ship contributes to a reduction of uncertainty in an American business environment. The de­velopment of personal relationships is not as valued as in South Korea. In fact, professional­ism, performance and competence are superior measures in developing trust (Engel, 2001, p. 39).

3. ) Work patterns and work-environmental relationships: In South Korea, a monochronic and harmony-oriented approach is pursued. This approach is highly correlated to the concept of "kibun". Kibun strives for harmony, diplomacy and the prevention of a loss of face therefore confrontation will be avoided (Lee, 2012, p. 184/185). However, in America a polychronic approach is pursued since "time is money". They seek to achieve their objectives in the fast­est and most effective way (Engel, 2001, p. 38). The work-environmental relationship is mas­tery-oriented implying a confrontational, direct and debating way in controlling their busi­ness (Lee, 2012, p. 185). In order to control the work environment and achieve success, Americans work hard and follow strict rules (Engel, 2001, p. 43).

2.2 Identifying potential managerial issues in business context

Culture impacts behaviors in a specific context. Therefore, it is crucial that managers are able to understand the changing global landscape. They should rather focus on a situational level of a cross-cultural working environment than on a macro level to prevent themselves from stereo­typing (Steers et al., 2017, p.31 and 145). In the following, three potential managerial issues in a South Korean-American teamwork will be identified based on the previously described core cul­tural dimensions.

In a business meeting, the impact of the different conceptions of power distribution of the two cultures may lead to continual misunderstandings between team members of both countries. As early as in addressing team members of the other culture, problems may arise. In South Korea, it is essential to address business contacts using the professional and honorific titles as a symbol of respect since addressing them by first names is considered rude. In America, titles are rarely used whereas immediately addressing business contacts by their first names is the common prac­tice (Lee, 2012, p. 186/187; Engel, 2001, p. 42; Going Global Inc., 2006, p. 1). Continuing with different applications of body language and behavior, further misunderstandings may occur. While greeting in South Korea, respect is highly expressed through bowing as well as avoiding direct eye contact. This is followed by a preferably soft handshake while grasping the right arm with the left hand (Going Global Inc., 2006, p. 1). Afterwards, exchanging business cards is exe­cuted following certain rules: the cards shall be passed with the right hand, received with both hands and nodding the head while looking at them is highly appreciated (Lee, 2012, p. 6). In business meetings, very few gestures are used as well as being quiet and considerate (Lee, 2012, p. 189; Hynson, 1991, p. 18; Going Global Inc., 2006, p. 1). However, in America, only a strong handshake implies professionally and business cards are not ritually exchanged. According to their confrontational debating approach, being quiet and considerate in meetings implies a lack of confidence and preparation to them (Marchiori, Carraher, Stiles, 2014, p. 280-283).

The different conceptions of those two nations in terms of power distribution may lead to the assumption that they do not respect each other already at a very early stage of their meeting which will highly harm the further cooperation.

In order to successfully conclude a negotiation, it is crucial to both cultures to build trust. How­ever, different approaches of building trust in terms of uncertainty and social control could ra­ther lead to mutual distrust between the business partners.

In South Korea, negotiations won't be concluded in the initial meeting since it is important to first get to know each other at a personal level and build up loyalty. (Lee, 2012, p. 188-189). Therefore, South Korean members will try to build up a relationship with the American team member asking them personal questions. In America in contrast, negotiations are considered problem-solving situations aiming to come to a quick conclusion. A professional approach is pre­ferred rather than a relationship-based one (Marchiori, 2014, p. 284) causing them to refuse the South Korean approach of building mutual trust and rather focus on the professional level of the cooperation. This rejection, in turn, may offend the South Korean team member. This may lead them to drifting away from each other rather than building trust causing negotiations to fail and therefore harm the business.

Divergent work patterns and work-environment relationships may lead to perpetual delays harming the business. A potential managerial issue may arise in handling the compliance with deadlines and also dealing with the failure of team members in meeting those deadlines.

While it is very important for Koreans to take their time especially in getting to know the business partner, Americans strive for quick solutions since their focus on "time is money".


Excerpt out of 7 pages


Identifying and Handling of Managerial Issues in a South Korean and American Business Cooperation
Victoria University of Wellington
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ISBN (eBook)
Business cooperation, cultures, solving intercultural issues, management across cultures, managerial issues, globalization
Quote paper
Jasmin Janle (Author), 2018, Identifying and Handling of Managerial Issues in a South Korean and American Business Cooperation, Munich, GRIN Verlag,


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