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Featured Language: Korean
Doing Business in South Korea
Though Koreans have transitioned greatly into Western society, the traditional ways of thinking in many areas are still practiced. What follows is an overview of some of the business and cultural tips offered by the U.S. Export Assistance Center for companies interested in doing business in South Korea.
- "Cold calls" don't work and introductions are crucial. Koreans want to do business with people with whom they have formed a personal connection or when a mutual intermediary has made an introduction.
- Koreans observe a very strict hierarchical code. They will generally meet to discuss business with persons of the same rank.
- Whereas as many Western cultures emphasize the importance of individual goals (i.e., what is best for me?), a Korean frequently thinks in group terms, (i.e., what is in the best interests of the group?)
- Be ready to mix business with social life, as the Koreans base their business relationships on personal ones…drinking of alcohol is commonplace in establishing a business relationship.
- Koreans have a great respect for anyone senior in age, and intuitively establish their hierarchical position relative to others based on age. One of the fundamental principles of the Korean language is based on the numerous verb endings, which indicate the level of respect accorded to another person.
- The exchange of business cards is very important. It is a sign of respect to receive and present items with both hands, followed in business etiquette by passing and receiving a card with the right hand. *One should never give a card, or anything else for that matter, with the left hand as it shows disrespect.
- Businesspersons should always have their (preferably bilingual) business cards ready. For historical reasons, Chinese characters, which Koreans can generally understand, are regarded as more sophisticated. As such, a business card written in Chinese characters can serve for a business trip to Korea, China, and Japan.
- Negotiating style is particularly important. Koreans can prove subtle and effective negotiators, and a commitment to a rigid negotiating stance early on may work to the American's disadvantage. Your offer may include the best price, technology, and profit potential but still be turned down because the Korean customer does not like your style.
- Koreans value a contract as a loosely structured consensus statement that broadly defines what has been negotiated, but leaves sufficient room to permit flexibility and adjustment. Both parties must be assured that the obligations spelled out in a negotiated contract are fully understood.
- A businessperson should show respect towards Korean society. Any comparative mention of Japan versus Korea, where Japan has the upper edge may harm a business deal.
- Most Koreans have three names. These names usually follow the Chinese pattern of a surname followed by two given names. In addressing Koreans, foreigners should observe the use of surnames (e.g., Mr. Kim; Ms. Lee), using formal titles if possible (e.g. Dr. Yoo; Director Song). In the use of formal titles as appropriate, one should always be familiar with the complete name, including the two given names, for identification purposes, as there may be several Mr. Park's or Dr. Lee's in the same company and even the same work space.
For more information about conducting business in South Korea, refer to the sources used to develop this article (listed below), or, access this issue's Useful Links.
Sources:
U.S. Department of Commerce
Export Assistance Center
Korea-U.S. Economic Council (KUSEC)
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