Doing Business in South Korea

Doing business in South Korea now, or planning to in the near future? Consider this…

  • South Korea is one of the top IT developed countries. They have the fastest Internet access speed in the world — seven times faster than the global average.
  • South Korea is ranked 8th in exporting and 11th in importing worldwide.
  •  Major industries include cars, chemicals, electronics, machinery, shipbuilding, steel, telecommunications, and robotics.
  •  Incheon International Airport is the largest and the primary airport in South Korea. From 2006 to 2010, the airport was selected the best airport in the world by the Airports Council International.
  •  South Korean society is based on Confucian values; age, rank, and harmony between groups are very important factors to consider. People can only be considered equals when they are the same age.

South Korea is a strong economic power with a huge global presence. Koreans in the business sector are often highly educated in Western customs and traditions, but continue to uphold their own nation’s strong conservative and traditional values, so don’t overestimate their tolerance and understanding of Western culture. Though younger generations are much more open to globalization, there are still many social and cultural differences from the United States, which should be considered when doing business in South Korea.

Important tips

  • Korean name structures are different from the Western norm. For instance, if a person’s name is Kim Hee Jin, it means Kim is the family name and Hee Jin is the first name. Middle names are not used.
  • Women do not change their names when they get married.
  • In a business setting, address people by their title along with their last name. For instance, if a person’s last name is Kim and title is manager, you should say “ Kim Manager.”
  • Koreans write the year first, and then the month and the day. For instance, January 9, 2012 is written 2012-01-09.
  • Local time is fourteen hours ahead of U.S. EST.
  • It is inappropriate to write a person’s name or sign a contract in red; only the names of the deceased are written in red.
  • Koreans believe the number 4 is bad luck because the Chinese characters for both “4” and “dead” are pronounced the same way.
  • People of opposite genders do not embrace when greeting; a handshake and slight bow are common ways to greet one another.

Appointments

  • Appointments are necessary when planning a meeting; be prompt, but be patient if your Korean counterpart is late. Punctuality is also expected for social events.
  • Koreans have a preference for one-on-one meetings over group meetings.
  • Rank and status are very important factors in Korea; in group meetings, seniors will enter the meeting room first, followed by colleagues in order of rank and job title.
  • The best time for a business meeting is between 10:00 a.m. and 11:00 a.m. or between 2:00 p.m. and 3:00 p.m. Be aware of Korea’s summer vacation days from July to August and all public holidays.

Negotiations

  • Usually tea, coffee, water, or other refreshments will be provided at a scheduled meeting at your Korean counterpart’s office.
  • Gift-giving is acceptable. Gifts with your company logo are welcome.
  • Send your English proposals or presentation materials in advance. Koreans prefer to have accurate statistical results with visible graphs or charts.
  • English is the most widely used foreign language; younger generations will conduct business meetings in English.
  • Koreans prefer to do business with individuals of equal business status or higher. If you are sending someone within your organization to meet with a Korean project manager, make sure that person is a project manager or higher; to meet a VP, send a VP or your CEO.
  • Business decisions often take longer to make than in the United States. Korean systems are based on hierarchy, so it takes time to get a final decision from executive levels.
  • Look for signs, such as silence, that your counterpart does not understand what you are saying. Do not expect them to tell you directly, but instead take the initiative to rephrase what it is you are trying to say.

Entertaining

  • Many business relationships are built during dinner and drinks at restaurants or bars. After dinner, people often go to a karaoke place.
  • Hosts or elders usually pay for meals.
  • If you are invited to a Korean’s house, you should come bearing fruits, flowers, cakes, juices, or wines.
  • Koreans never wear shoes inside houses or temples, so take off your shoes at the entryway.
  • Koreans always use chopsticks and spoons for meals and eat desserts or fruits with forks. Most Korean dishes are served with a bowl of rice.

Morrison, Terri, and Wayne A. Conaway (2006). Kiss, Bow, or Shake Hands, 2nd edition. Massachusetts: Adams.



 
 

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