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As mentioned in the introduction, a management system is a function of its culture. This means that the culture of a nation influences and systematizes the management system of that nation. Understanding Korean culture, therefore, is a prerequisite to understanding the Korean management system. Figure 1.1 (p. 10 ) shows the basic conceptual framework of the Korean management system in terms of the Korean culture. Korea, like Japan and the other countries surrounding China, has been under the influence of the Chinese culture for more than a thousand years. The Chinese culture, therefore, has dominated the Korean society and their everyday lives through political, legal, and social systems in addition to literature, religion, and ethics. Specifically, Chinese culture in general and the religions of Buddhism, Confucianism, Shamanism, and Taoism in particular have played an important role in Korea. Chinese language and literature are very important in that Chinese characters were used exclusively in Korea until the middle of the fifteenth century, and they are still used even after "hangul," the Korean alphabet, was introduced and used extensively. All aspects of the Chinese culture spread into Korea through Chinese books, traditions, customs, and the value system. One out of four South Koreans is a Christian. The largest church in the world, with a congregation numbering at least half a million, is located in Seoul, and many influential leaders and managers both in business and nonbusiness organizations are dedicated Christians. Nevertheless, we exclude Christianity from the following discussion, because the Christian Church has only one hundred years of history in South Korea, except for the Catholic Church, and it may not yet have a profound impact on the formation of characteristics of the Korean people. Actually, Korean Christians are sometimes also believers of Buddhism, -9- Figure 1.1

Framework of the Korean Management System Confucianism, Shamanism, and Taoism in the sense that these four religions and teachings are integral parts of the Korean culture. We do not discuss Islam because there are only a few believers. Although Buddhism and Confucianism have been generally accepted as religions in Korea and have become an integral part of the lives of the Koreans, there is a major difference between them: Buddhism is understood and practiced as a pure religion, and it recognizes heaven, hell, and transmigration. It teaches that anyone can enjoy the life of heaven if he or she has a virtuous and honest life in this world. Heaven is the reward for what anyone has done on earth. Buddhism, therefore, represents honest and virtuous living to Koreans. Confucianism, as originally observed in China, is understood more as a moral philosophy with moral teachings than as a religion. It is involved more in the contemporary world, rather than emphasizing the afterlife. Having a meaningful, moral, and virtuous life in this world is an end itself; it does not serve as a precondition to the life after death. Confucianism, therefore, is not seriously concerned with the supernatural world, even though it recognizes the supernatural as an unknown world. Koreans believe that they must fulfill an additional obligation of filial piety to their ancestors. Shamanism has been integrated into the lives of the Koreans through ancestor worship. Koreans, as living offspring, accept blessings in return from the spirits of their ancestors. It is really a quid pro quo. Shamanism recognizes the existence of various gods everywhere who possess the power to bless people who in turn seek the -10- gods' blessing by their devoted prayers for their family members only. During the college entrance examination period, for example, mothers of college applicants fervently pray in Buddhist temples and Christian churches that the colleges will accept their children. This practice can be traced originally to Shamanism tradition, although the practitioners may be Buddhists, Christians, Confucians, or Taoists.The practice of Shamanism in Korea shows the importance of the family system, which was emphasized and integrated fully into the teachings of Confucianism. Koreans are one of the most family-oriented people in the world. Maintaining family tradition and enhancing family prestige are the most important obligations to each family member. Although Korean Christians formally discontinue this process of Shamanism ritual, they still maintain informally the tradition of ancestor worship.Through Chinese Taoism, Koreans conceived of the universe as a great hierarchical whole composed of parts, spaces, and times that correspond to one another. This whole, however, is not static. All entities, including human beings, are subject to changes and transformations ( Eliade 1987). Believers in Taoism emphasize a distaste for worldly affairs and a yearning for life in harmony with nature.We can see the uniqueness of Taoism when we compare Taoism with Confucianism. Taoism stresses avoiding conventional social obligations and leading a simple, spontaneous, and meditative life close to nature. By contrast, Confucianism emphasizes a well-disciplined society and stresses ceremony, duty, and public service. The Koreans have lived by these two different ideals. On the one hand, the Koreans try to succeed in the society following the tradition of Confucianism. On the other hand, Koreans downgrade the significance of worldly success and develop a fatalistic view of the world.Nobody understands the Korean management system clearly without understanding the importance of the family system. Koreans work for their business mainly to preserve their family tradition and to enhance their family prestige through successful businesses. They also work for their business by becoming recognized managers and leaders. Through the ancestor-worship ritual, the living offspring proudly report to their ancestors of their success and thank the spirits for their blessings.As was mentioned above, the teachings and the value system of Confucianism have prevailed in the minds of Koreans. This means that Confucianism has been accepted as a set of moral teachings and ethical values, but not as a religion. Based on Confucianism, the Korean society has the following characteristics: Orderly SocietyUnderstanding and maintaining your position in society

-11- Free Society No religious Caste System No food restrictions except for health reasons Capability and determination determine your ultimate rank

Family-Oriented Society Filial piety to your parents Loyalty to superiors Paternalistic society

Group-Oriented Society Individualism in a group setting "Hwa" (harmony) among members

Education-Oriented Society Career success = f (level of education) mentality Respect for scholars

In any nation, Confucianism emphasizes a stable society based on loyalty to the state and superiors and filial piety to living parents and even to deceased ancestors through ancestor worship. It also stresses good relations among the members of the society by maintaining adequate hierarchical and lateral relationships. There is a strict hierarchical order to obey in that subordinates must respect and obey their superiors. This has an implication to the Korean management system that we will call the "Principle of Strict Hierarchical Order." On the other hand, superiors must protect the well-being and interests of their subordinates. This principle has a significant impact on the Korean management system, and we will call it the "Principle of Reciprocity." In summary, according to Confucianism, the ethical standards of a society are mutual trust and respect. Traditionally, a stable society functions within the framework of a hierarchical social class system. The four classes of Confucian society were expressed by four Chinese characters. While Koreans pronounce these characters as "sa," "nong," "kong," and "sang," the Japanese pronounce them as "si," "no," "ko," and "sho." The top class of "sa" meant the literate class in Korea, but it also referred to the warrior class in Japan. The second highest class was the farmers; third, the manufacturers. The merchants were relegated to the bottom class because Korean people, in particular, understood that the merchant class exploited people by unjustifiable profit-taking. It should be noted, however, that the divisions among these social classes were never as rigid and exclusive as those in the caste system in India -- there was upward mobility in Korea. Unless someone belonged to the underclass, such as a serf or a man of very humble birth, he could rise to any level depending on talent, capacity, and family status. Yet the top class of "sa" enjoyed the most opportunities in Korea. This has -12- an implication to Korean management that we will call the "Principle of Open Society." In Confucian society, the importance of education cannot be overly emphasized, even today. In Korea, educated men or scholars have been highly respected. However, many Koreans could enjoy the privileges and status of the highest class of "sa" by passing the rigorous civil service examination, "kwageo," to become civil servants. In order to pass the examination, candidates prepared themselves for Confucian literature and politics. This implies that education was critically important to many Koreans since it determined success or failure in their career paths. The critical importance of education has an implication to the Korean management system that we will call the "Principle of Education Priority." Koreans place greater importance on filial piety to parents than on piety to superiors, but the Japanese give higher priority to the reverse order ( Hirschmeier and Yui 1981). Although the Korean society has emphasized loyalty to superiors and to the state, filial piety has been the most important form of social behavior. This means that the family system or family prestige has been the primary objective in Korea. In no other society do we find such a strict regulation to maintain the purity of the family system as in Korea. For example, with few exceptions, no one can marry a person who happens to have the same family name, and every household keeps its own genealogical table to identify the roots of its family. The Korean family system is also unique in that it is defined in a very narrow and strict sense. That is, the system demands a more bloodoriented family than in other societies. The practice of adopting a son has never been used extensively in Korea. Each man must have his own son(s) by any means. If a man fails to have his own son, his last resort is to adopt a son from one of his brothers. Any married woman who cannot conceive a child is considered the most profound sinner and encounters much contempt in society. On February 12, 1988, NBC's Today Show reported about an adoption of children from South Korea. Two Korean brothers were sent to an orphanage because their step-father never accepted them as his children since they were not related by blood to him. Babies of unwed mothers have never been warmly accepted in Korean society and have ended up in orphanages where they might be adopted by American parents. The strangely unique patrimonial heritage of the North Korean Communist system can be understood in this context. President Kim Il Sung is in the process of transferring his power structure to his son, Kim Jong Il. This case represents a complete departure from the typical Communist pattern as an application of the traditional Korean family system. -13- This practice still prevails in the Korean management system. Many Korean corporations are managed by members of the founder's families even after they have expanded into giant businesses. We will call this practice the "Principle of the Blood-oriented Family System." Agriculture was accepted as the basic industry in Korea, and the status of farmers was recognized accordingly, although farmers were exploited by members of the top class. On the other hand, the status of manufacturers and artisans was very low in a society where agriculture was the dominant industry, and thus the manufacturing industry remained at the stage of pre-Industrial Revolution until the early twentieth century. Merchants belonged to the lowest class in Korea. Their functions as transaction facilitators in society were not properly recognized. Instead, they were regarded as men of exploitation and profits. This bad connotation prompted an implication to the Korean management system which we will call the "Principle of Ignoring Commerce." This principle has had a negative impact on the Korean management system, but it has been modified extensively over the past thirty years. You may wonder why Koreans failed to modernize their country as Japan did in 1868 through the Meiji Restoration if Koreans shared a common cultural heritage for so many years with the Japanese. This issue is beyond the scope of this book to discuss in detail, but identification of some of the key reasons is very important in order to understand the unique features of the Korean management system. The main reasons lie in the unique lifestyle that Koreans had practiced. Their lifestyle stems from the unique personalities of Koreans, geopolitical impact, and sociocultural system. Since the Korean peninsula was surrounded by the major powers of China, Japan, and Russia, Koreans abandoned the policy of relying on military power to protect their independence. Instead, Korea was under the umbrella of Chinese protection. Militarism thus never gained any popularity in Korea, and Korean military men were never respected. There was no need to develop any huge logistic system for military operations that needed the help of the merchant class, who in other countries, flourished by providing supplies for military logistics. No serious connection between the military and merchants ever evolved in Korea; therefore, the merchant class had no opportunity to grow under such a nonmilitary and agrarian society. There is another reason: Since no priority was given to militarism in Korea, there was no incentive to develop modern weapon systems. Furthermore, there was no interaction between Koreans and Westerners until the nineteenth century. Japan followed a different course. Since militarism was important in Japan, the warriors, called the samurai class, were genuinely interested in strengthening their military positions. The two most important require- -14- ments to meet this need were to develop a well-organized logistic system and to acquire the most advanced weapons. The former need had contributed to the development of the merchant class and the interaction between these two polarized classes. The samurai class depended on merchants for the effective management of their logistic system for wars, and the merchants depended on the samurai class for their safety and profits. From the early days, there was a close relationship between samurai and merchant classes. Thus commerce expanded rapidly in Japan. The warriors' endeavor to have access to the most advanced weapons in Japan also had a great impact on the development of commerce in Japan. After Portuguese sailors became the first Europeans to reach Japan in 1543 ( Takagi and Fukuda 1971), the Japanese warriors recognized that Westerners had developed more advanced weapon systems. Since then, the Japanese were interested in interacting with Westerners, although they kept an official policy of ostracism. Their interest in Western culture was highlighted in the so-called Dutch studies ( Takagi and Fukuda 1971). Through the Dutch, who were in Japan for various reasons, the Japanese extensively studied advanced Western learning in many fields other than just weaponry. They adapted useful ideas more effectively than any other Asian nation. Japan, therefore, never closed her doors completely to foreigners except during certain periods. This access to Western culture was one of the driving forces for the restoration movement of 1868 in Japan, and it also partially explains why Japan became the first nation in Asia to undergo such a movement. On the contrary, interaction between Koreans and Westerners was quite limited. China was the only country with which Korea had extensive relations and trade, including tribute. Koreans considered anything related to China admirable. By contrast, trade with Japan was not prosperous and took place only intermittently. Koreans interacted with Westerners when shipwrecked Dutch sailors landed on the Korean coast in 1628 and 1653 ( Han 1989), but Korean officials never took advantage of these opportunities. There were also other occasions to interact with Westerners in the sixteenth and seventeenth centuries, but Koreans refused to use such opportunities for their benefit. Unfortunately, Western learning never had any significant impact on Koreauntil the arrival of Roman Catholic Church missionaries during the latter part of the eighteenth century. As a result, Korea remained one of the most secluded countries for many years until foreign powers forced the Korean government to open her doors in the latter part of the nineteenth century. A commercial treaty was signed in 1876 with Japan, and similar treaties were arranged in 1882 with the United States and -15- then China. Korea had followed China's leadership closely for so many years that her government was not flexible enough to make independent decisions for the country. You cannot understand the Korean culture and people until you comprehend the yin-yang concept. The Korean people perceive the universe in terms of dual cosmic forces. One force represents a positive aspect; the other represents a negative aspect. For example, sun, male, spring, sunny spot, day, and odd numbers belong to yang (positive); moon, female, fall, shady spot, night, and even numbers belong to yin (negative). The Koreans were so fanatic about this dualism that they expressed their sentiment on their national flag. The SouthKorean flag has a circle in the center with a dividing line, which represents the yin-yang concept. Through this yin-yang concept, the Koreans perceive differences in the universe: between sun and moon, male and female, spring and fall, sunny spot and shady spot, and odd numbers and even numbers. However, they also perceive the complementary nature of these differences, for example, between male and female. Nothing is complete unless these pairs match each other and function accordingly. Each element in a positive/negative pair needs the other to become a complete substance: A male needs a female, the sun needs the moon, and the spring needs the fall. Through this matching process, these pairs fulfill a synergistic effect. In the yin-yang concept, the coexistence between different pairs is a requirement. Understanding this difference-complement dichotomy is essential to understanding the Oriental culture and the Korean culture. It has one important distinction: A sense of hatred because one sees a difference, but no sense of conquest, destruction, or enmity can develop because a part needs the other part as complement. The other part must be cherished, not destroyed. In this world of yin-yang, there also is no value system. The moon is as important as the sun, because we need night as well as we need day. In one sense, yin-yang is a value-free and doctrinefree concept. To the Korean people, the dualism of God and the devil is an alien and unfamiliar perception. A god and a devil, of course, are different, but they are not complementary to each other. Devils as threatening evils must be conquered or destroyed. This is a holy war. A god-abiding person cannot accept, tolerate, or coexist with a devil-abiding person. Godabiding people must prevail throughout. We cannot simply accept the existence of a devil-dominated world. The evil world must be destroyed or conquered. This is really a zero-sum game. The yin-yang concept has a great implication to the Korean management system through Korean culture and behavior of the Korean people. You can see peaceful coexistence of various religions in South Korea, but there has never been extensive interaction among them. No religion -16- has ever developed a perception that other religions are evil and must, therefore, be conquered or destroyed. A concept of holy religious war has never developed against other religions in Korea. This brings some uncomfortable feelings among Korean Christians who have been indoctrinated that Christianity is the only religion that does not recognize the existence of any gods of other religions. In church, the Korean Christians behave exactly like real Christians. Outside church, they transform themselves into Korean Christians who unwillingly acknowledge the existence of other religions and the yin-yang concept of different but complementary relationships. In one sense, Korean Christians live in two different worlds: a world of no compromise, and a world of compromise and complement. The Korean Christians are really yin-yang Christians who have to reconcile their Korean cultural heritage with Christian doctrines. They believe in Buddhism, Confucianism, and Shamanism as mentioned before; therefore, they practice Christianity in a culture that inherited and cherished the values of teachings of various religions and philosophies. To Korean Christians, ecumenism has a different meaning from that to a Westerner. It is a movement among different religions in addition to a movement among different denominations of the Christian church. Some scholars defend the dialogue between Christianity and Confucianism. In the conference meeting of The Korean Society for Religious Study in North America, some Korean-American scholars presented papers on the necessity of a dialogue between the two religions. Scholars argued that some common ground can be found between Christianity and Confucianism. During the Korean presidential election campaign in 1992, three major presidential candidates attended an important Buddhist ritual because they needed to court the votes of Buddhists, which is the largest religious group in South Korea. Kim Young Sam is a Presbyterian elder; Kim Dae Jung is a Catholic; and Chung Ju Yung does not belong to any religious group. As a church elder, Kim Young Sam complied with the Buddhist ritual without violating his Christian practice. As a devout Catholic, Kim Dae Jung did not comply significantly with the ritual. As presidential candidates, they must be extremely careful not to alienate themselves from Buddhist believers in order to court their votes. Chung Ju Yung, free from any religious restrictions, participated in the ritual without reservations. The example of these presidential candidates demonstrates a typical behavioral pattern of Koreans: accommodating their culture and their religious practices. In conclusion, the Korean management system shares many features with other management systems. However, it is unique in the sense that the Korean culture has its distinctive features, and a management system is a function of its own culture. Of course, Korean people share the -17- Chinese culture with the Chinese and the Japanese. Still, Koreans have developed a unique cultural pattern different from that of both China and Japan. In this chapter, we also investigated some of the probable reasons why Korea failed to modernize its country and its economy as Japan did in the nineteenth century. The difference may be attributed to cultural nuances and geopolitical factors. The latter is the subject of the next chapter. REFERENCES Eliade M. (ed.). Encyclopedia of Religion. Vol. 14. New York: Macmillan Publishing Company, 1987. Han W. K. Hankuk Tongsa (History of Korea). Seoul: Ulyu Moonhwasa, 1989. Hirschmeier J. and Yui T. The Development of Japanese Business, 1600- 1980. 2d ed. London and Boston: George Allen & Unwin, 1981. Takagi K. and Fukuda M. (eds.). Nihonno Rekishi (History of Japan). Vols. 2-3. Tokyo: Yomiuri Shinbunsha, 1971. -18- 10

The Korean Management System and Management Systems of Japan and the United States Is the Korean management system unique and different from other management systems such as the Japanese and the American systems? The answer to this question is both "yes" and "no." All management systems have a common feature: They strive to enhance the performance of organizations in the most effective way to achieve the organizations' goals. The Korean management system shares with other management systems in this regard. From this perspective, we may state that all management systems function under universally applicable principles of planning, organization, control, leadership, and motivation. However, the Korean management system is unique in that it is also culturally bounded. It strives to enhance the performance of organizations in the most effective way within the context of the Korean culture. Likewise, both Japanese and American management systems are unique because they function in the context of their own cultures. A study of the Korean management system along with both Japanese and American management systems will highlight the unique features of the Korean management system. We have chosen the management systems of Japan and the United States just because these two management systems have had a significant impact on that of Korea. When the Japanese occupied Koreafrom 1910 until the end of World War II, the Japanese brought a modernized or Westernized management system to Korea. The current Japanese management system is really a blend of their traditional management system with elements of the Westernized management system. While this management system was -129- being practiced by the Japanese in Korea, Koreans integrated the Japanese management system into their own. Even today, the organizational hierarchical structure, for example, is mostly the same in both South Korea and Japan. All the hierarchical ranks of an organization are expressed by the same Chinese characters, although each country pronounces them differently. It is interesting to see the similarity between South Korea and Japan on official ranks in an organization: Ranks

Japan

South Korea

Chairman

kaicho

hwoichang

President

Shacho

sachang

Executive Director

senmu

jeonmu

Managing Director

jomu

sangmu

Director

riji

eesah

Department Manager

bucho

puchang

Deputy Department Manager

jicho

chachang

Section Chief

kacho

kwachang

Deputy Section Chief

dairi

daerhee

Chief Clerk

kakaricho

kaychang

Regular Staff Members

Shain

sawon

Regardless of this similarity, the Korean management system has its own unique features because of the influence of the Korean cultural background. We will demonstrate these unique features when we investigate both the management systems of Japan and South Korea. Since the end of World War II, the American management system has also had a great impact on the Korean management system. American culture has intruded into every aspect of South Korean society, and the Korean management system is no exception. More specifically, the American management system had been a symbol of effectiveness and efficiency in the past, and South Korean managers have tried to adopt many applicable concepts of the American system to their management system. Many Korean college professors have earned their masters and doctoral degrees from American universities and have taught their students what they learned from the United States. Koreans have adopted, for example, the term "marketing" because they cannot find an adequate word expressing the concept of marketing, although they have tried hard to locate a suitable Korean term. Regardless of this massive infusion of American management concepts, the Korean management system still remains different from the American management system because of cultural influences on management practice. Although the Korean management system has never -130- been analyzed as extensively as the American management system, distinctive features of the Korean management system have emerged from a comparative study with the American and the Japanese management systems.Because the purpose of this chapter is to investigate the unique features of the Korean management system vis-à-vis Japanese and American management systems, a possible approach is to identify unique features of each management system and then to investigate their causes.

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