Understanding Korean Business Culture:
9 Steps to Succeed with your Korean Business Negotiations
1. Bring lots of business cards. A businessman is not comfortable with you until he knows what company and what position the person he just met is from.
Therefore, the exchange of business cards in Korea is VERY IMPORTANT (especially for Korean Business Negotiation). It is a formal affair and plays an important role in instructions.
2. Bring a brief Bio in English and Korean with you to the business meeting. This will connect you with the right people quickly by providing this information.
3. Pay attention to rank. For more than 2000 years Koreans were conditioned to pay attention to the social status of Koreans. This “programming” makes them very sensitive to the rank of all Koreans.
In companies, managers can be quickly identified by the size and quality of their desks and chairs. A high-ranking individual sets in a larger desk than others. Top ranking executives have private offices just like in America. Chairs without armrests mean ordinary staff members.
When people enter an office they can assume that the desks nearest the entrance are the lowest-ranking employees in the office.
4. Surviving Korean Hospitality. Koreans typically roll out the red carpet for friends and visitors in the form of food and drink. At the office guests and clients are served some kind of refreshment. They might offer you coffee, fruit juice, soft drinks or even beer! It seems that “Pleasure before Business” is the preferred way of doing business in Korea. They even are accustomed to paying the restaurant and bar bills even if they are not the host. Hospitality is an age-old Korean custom.
5. Management Korean Style. The traditional Korean corporation is a vertical structure with a specific chain of command from the top “general” down to the “troops.” You don’t go over a superior’s head or you are asking for trouble.
Senior executives make the decisions on disagreements or confrontations. They are NOT handled by discussions that lead to compromise and consensus.
Employees are expected to think and behave in a serious manner at all times. However, it is changing because of the influence of doing business with Westerners.
When is comes to product or service – QUALITY is most important. They encourage employees to strive for perfection.
6. Contracts in Korea
Try to personalize all business relationships.
An informal agreement with a trusted party can be considered far more secure than any written document.
Try to find out as much about your counterparts as possible their family status, hobbies, philosophies, birthdays, etc.
Try balancing your social life with regular activities with Koreans and NOT simply people of your own or similar cultures.
Korean business people are good negotiators. Be patient, gentle, and a good listener. Be FIRM, but DO NOT PUSH your position too far.
Work on relationships first, and business negotiations second. Honesty, integrity, and diligence of Koreans are most important to them.
7. Have “Korean Friendly” Contracts. Foreign companies who want to do business in Korea should get professional help in making the terminology of their contracts “Korean friendly” so that their Korean partners can sign them in good faith and will make a sincere effort to abide by them.
8. Business Drinking in Korea. In the 20th century the custom of drinking came into the business world as a vital part of establishing and maintaining interpersonal relationships. It allows Koreans to dispense with their strict etiquette and be more relaxed.
Today, the company cannot force employees to go out and drink. WINE is considered the acceptable social drink of today.
It is easier for people to bond together because normal etiquette does not allow either intimacy or openness.
9. Korean Negotiating. The typical Korean negotiating process is:
The senior executives of two corporations meet and agree that the companies will do business together.
Lower-ranking staff members are then charged with the responsibility of working out all the details and getting them approved with the outside company in advance.
The top men then re-enter the picture for a ceremonial signing of the agreement.
Koreans avoid the word, “NO.” Instead they say, “we will study it further.” Other ways of avoiding NO is to say, “We must consult with top management.” Or “we’ll see.” Or “we’ll think about it.”
They regard the details about their operation as vital company secrets. So they are cautious about revealing information to outsiders until there is some kind of relationship established.
So if you want to do business in Korea...
• Begin by building a good relationship
• Understand the reasons behind their negotiating style
• Be a good listener and make sure you understand the offer
• And… Honor and understand their business customs.
Now you know how to do business with Koreans. The more you know, the more you prepare, the more successful you will be with Korean business executives.
They will be impressed and delighted on how much you know about Korea. It is a foot in the door to business success.
Remember...You Are a Super Hero!
Jinsoo
jinsoo@jinsooterry.com
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