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Establish a Personal Relationship with Your Korean Business Partner

By Heejeong Haas | September 25, 2007

As I mentioned in my previous post, it is crucial for you to build a personal relationship with your Korean business partner. I say it as “personal relationship” although many other experts like to define it as “human relationship” or “interpersonal relationship”. Although I understand perfectly well why they would use the terminology I listed above, I still say it is rather as a personal relationship since the relationship gets very personal, focusing mainly on satisfying each other’s emotional needs. Furthermore there is a huge difference between human relationship and personal relationship. There “must” be a human relationship even in American business culture, in fact in any business culture in the whole world. Otherwise businesses cannot go far, as businesses are run by “people”, and people have a relationship one way or the other within their cultural boundary as it is suitable. So, when I say “personal relationship” and “personal bond” in Korean business culture, I mean it to a much higher degree of any kind of personal relationship and bond you will have in American business culture.

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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Topics: Communication, Korean business culture | No Comments »

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