How Not to Enter Korean Market (Part II)
By Tom Coyner
President of Soft Landing Consulting
As I promised last week, this is the second part of my column that deals with analysis and conclusion.
Though Mr. Kim had the networking and cold calling skills from being an entrepreneur, he had not worked in a corporate setting for decades. As a result, Mr. Kim could be at times a bull in a china shop when it came to corporate politics and sensitivities. On the other hand, Mr. Kim had the rare chutzpa and confidence to be able to call on executives at whatever level necessary to present the value proposition of Acme Services.
While the official title of being the Korea Business Development Manager was marginally satisfactory for a Korean male of his age, the general market expectations for someone representing Acme alone at his age would be the local president.
This is a common dilemma for many international companies doing business in Korea. Job titles in terms of corporate ranking and authorized delegation of authority may not be in sync with what Korean society expects of Korean males as they approach and pass their middle years. One way around this is to have within the employment contract or in a side agreement, a listing of dual titles with definitions of what the Korean manager may put on his business cards for marketing purposes and what his actual, internal title, rank and authority may be.
In countries where "face" is important, it can be insulting to presume a president or even a vice president of a prospective client would be willing to meet with a Korean employee of a substantially lesser title on his or her business card. Consequently, some multinational companies have recognized the need to have internal and external titles assigned to local managers in order for those persons to be effective in their jobs.
This leads us to a more subtle yet critical issue. An effective business professional anywhere is expected to have a strong personal network of people who can assist him or her in accomplishing the job's mission. This is particularly so in Korea. The old adage "it's more important who you know than what you know" is in full effect within this market. Having said that, particularly in this physically small market where almost no secrets remain for long, an employee's personal network can be the employer's double-edged sword. That is, an employees' personal network can do wonders for opening doors ― but they can also slam and bolt doors should the employee be viewed as being wronged by their employers.
While "termination at will" clauses are legal in the United States and possibly elsewhere, they are illegal in Korea. Even if they were legal, such clauses can be landmines for inept supervising managers who may view them as expediencies to remove an employee without concern for due process as perceived by the local market. In other words, if a local employee is terminated at will, or for some contrived reason, that employee's personal network ― and by extension, the local market ― can view the termination as a foreign employer mistreating a Korean employee. In such a case, the company will have shot a major hole in its own foot. After all, many Koreans may surmise that if the company is willing to ride roughshod over one's own employees, one may expect similar ethics when doing business with that company's management.
Where Acme Services goes from here in Korea is still an unwritten page. In the end, they may survive this episode and succeed since they have services that are in demand by Korean companies. On the other hand, there are cheaper domestic competitors offering the same or at least similar services. Unfortunately, bad news always travels faster and is remembered longer than good news.
Acme Services could very well temporarily write off Korea within the greater scheme of things. And, let's face it: that happens more commonly among international corporations than most Koreans like to admit. On the other hand, while writing off Korea may be inevitable in some cases, in most cases it is not necessary when wiser management is in control.