I talked about assigning the right type of personnel in a Korean operation.  That’s right, the right type of person.  We all know that to implement and carry out a certain effort, there must be a qualified person who is a perfect fit for such a task.  When it comes to Korean operation, the the same theory applies.  Only that who you think is perfect may later prove you that the person was not only the wrong choice, but also the whole operation became a complete failure because you just assigned a wrong person.

A few years ago, I had an opportunity to represent an American company to locate a Korean manufacturer and pave the way to enter a successful negotiation.  I spent a great deal of time to build up that personal relationship with them and promote the image of this American company and worked hard to have a successful negotiation for every single aspect of their Korean operation.  So, everything was set up and two companies were good to go to run the full operation.  When I learned who the company chose to run the day-to-day Korean operation in Korea, I secretly had concern about this person.  I thought that he probably couldn’t handle the personal aspect of Korean business culture.  Nonetheless, he was a great asset to the company.  He had MBA in International Business, incredibly intelligent, ran his own business for a while before he came on board, and was almost a wizard at numbers and figures—I often refer these types as “excel spread sheet type” as it seems like they view the whole world through a spread sheet.

When I sat down with him to go through all the necessary cultural differences that he had to be aware of, I noticed that he was quite irritated about a few things I was suggesting him to do.  What was I suggesting him to do?  “Go out with them, be careful with your email messages if you are not to have a staff who is fluent in both languages so that he or she can aid you in communication effort, try to learn some phrases in Korean so that you can get by, these are Korean holidays when you may want to send gifts to them and reinforce your personal relationship with them, and many more….”  I expressed my concern in a very passive way as I knew that it was not my place to say something about it.  But they thought that he still was the perfect fit.

When he landed in Korea and started working with them, not only that the Korean business partner felt like they were in a business deal that only seemed great when I was representing and working with them, but also they constantly felt like this American employee was quite condescending to them.  He never wanted to go out with them, he would only communicate with them for necessary business matters, the way he was treating the people around him was not pleasant.  He simply couldn’t handle that personal aspect of Korean business culture.  It was too much for him.  He was not at ease dealing with people in such a way, and he thought it was quite backward.  It simply was his personal preference how he professionally performed, however it was the wrong attitude to have in Korean business world.

And when the company finally learned that the things were not going great at all, in fact, their operation was at the brink of shutting down, they pulled him back and contacted me again.  As I learned what had been happening, it was an eye opening experience to me, and at the same time, I felt greatly responsible for not being clearly expressive about my concern.  One of the reasons I was not clearly expressive was because I didn’t want to cost somebody’s job or damage somebody’s reputation without any proof.  However, their relationship and deal were both mended with a great effort costing both companies huge expenses.

Since then, I carefully observe executive members whom I have to accompany to Korea on a business deal or assignees going to Korea to run an operation, and tell clients what I think without hesitation.  I learned that it is a lot better for them to ridicule my opinion and not trust me and for me to be proven wrong than my clients’ having to find out that their effort is about to be ruined.  Even when I am not in the position to say so, I do it anyway as I learned what it will cost my clients.

There is also one more important lesson I learned from this very experience—email and messenger communication.  But that is to the next post.

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Let’s look at one very telling factor of this. Until recently, written contracts were not widely used in Korea. Business dealings were mainly arranged on verbal agreements that stemmed from mutual trust that again was stemmed from the personal relationship they established and nurtured together. Therefore, nurturing a personal relationship and bond was such a crucial part in Korean business culture. Imagine you are entering a major business deal without a written contract; very likely, all the American businessmen will have a heart attack if this has to be done. However what would you do when there is no legal paper bounding your every single action? You have no choice but to rely on your relationship with the other party. Just like you now invest so much on marketing and sales to expand your business, this is the degree of importance you will put to nurturing the relationship.

One may argue that Korean culture now has changed. Sure, it has. Written contracts are being used widely and in fact, it is a norm in the Korean business world as it is in the American business world. But you know what the scary thing of all this is? Just because they are signing the contract with their smiley face doesn’t mean that they honor the contract. No, I am not saying that Korean businessmen are dishonest. To them, without that personal trust and bond, this piece of paper doesn’t mean anything. The degree of their taking the contract into their business practice is a lot less serious. And if you do not invest your time and effort to reshape and reinforce that personal relationship with them, the contract won’t mean a thing.

I have seen so many Korean businessmen taking the legal process lightly and going right against their contract when they feel like it. Emotional? Yes. Wrong? Maybe, maybe not. And you know what the worst thing is, when Korean business partners do such a thing, there actually is not much American companies can do about it. Because you are dealing with an overseas partner, and to do anything legally will cost you tons of money.

And this is exactly why it is very crucial for American companies send or assign a person who can be at ease with building a personal relationship and being “personally” involved in establishing an operation in Korea. However, such a businessman going to Korea often needs aid for their communication effort and understanding of all the different business aspects in Korea. Many companies may hesitate to spend money on this effort to have someone to aid the company’s Korean operations part not knowing that eventually this will be the short cut and budget saving move. A few years down the road when they repeatedly fail to even have a simple communication, then they finally realized that they should have not only hired somebody to guide them through for dealing with Korean business partner, but also they are at the point where they cannot lose any more money. So, think wise. A help from Korean business experts is not a waste of money, it will be your money savor. In my next post, I will tell you one of the lessons I learned the hard way a few years ago on this very subject.

Best,

Heejeong Haas

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