Doing Business in South Korea

• Has a good understanding of the local and national political situation
• Has the proper status and good connections with the government
• Has the ability and willingness to be your contact on the ground or help you find a good one by being a mutual connection
• Has lived and or worked and or has done business in the Western world and therefore is sensitive to an explicit task-driven way to do business
• Ideally studied abroad

Koreans might ask multiple personal questions during social interactions or business meetings as they try to build a rapport and try to place you in their hierarchy. Always respect the hierarchy and give face to older Korean counterparts or Koreans with a higher status. When doing introductions, always greet the most senior person first and then move down the line. Do the same when introducing your own team. Wait to be told where to sit and match your team with the Korean team in terms of age and seniority as building relationships with Koreans with the same age and level can be easier. Gift giving is an important part of business, make sure that you are giving the appropriate gifts for each occasion. As a high-context culture, implicit communication is key, as is understanding the concept of face and how to give face and avoid losing face or causing Korean counterparts to lose face. This can damage or end business relationships that are needed for successful business dealings.

Do not discuss business during a meal unless your Korean host brings up the subject. Social meetings will usually be held at a restaurant or coffee shop. If you are invited to someone’s home this is considered an honour. Remove your shoes when you enter someone’s house and always place your shoes with the toes pointing outwards (away from the house). Call before you visit, and when leaving express your thanks by bowing and by sending a note afterwards. When you have been invited you should reciprocate by inviting your host for a meal of equal value at a later date. Usually you will be invited for a drink after working hours, and these social meetings can involve a lot of alcohol. Social meetings are very important to help build strong relationships that will benefit business dealings. Do not refuse these social invitations as it might harm current relationships, and try to reciprocate by inviting your Korean business counterparts for drinks at a later time. The person that extended the invitation should pay for drinks or the meal and the younger should always pay for the older. When sitting on the floor of a restaurant men can cross their legs and women should sit with their legs to the side, never extending their legs under the table. Koreans mainly eat with chopsticks. When you have completed your meal, place the chopsticks on the chopstick rest and not on top of the bowl as this signifies certain religious rituals. Never eat with your hands and do not put food in your mouth from a serving bowl, first transfer it to your own bowl. Never finish all the food on your plate as this is a sign that you need more food. Karaoke is very popular in Korea after meals and refusing to sing is impolite.

Be prepared to hand out a lot of business cards. Business cards are a key aspect to determine where you sit in the hierarchy, thus include your company, title, and qualifications. Have a Korean translation on the back of your card. Use your right hand to hand over business cards. Never write on business cards or place it in your wallet or back pocket when receiving it.

Businessmen can wear conservative suits with a tie and a formal white shirt. Women can wear a conservative suit, avoiding tight fitting clothing as some business deals might be done sitting on the floor of a restaurant. Dress modestly to avoid offending locals. Usually, the rule is to cover your shoulders and to wear trousers or skirts covering your knees. Wearing revealing clothing can be seen as a mark of poor character.

Korean men greet one another with a slight bow sometimes accompanied by a handshake while making eye contact. Supporting your right forearm with your left hand during the handshake is a sign of added respect. A junior person will initiate the greeting and bow while the senior person will be the first to offer their hand for a gentle handshake. Generally Korean men will avoid shaking hands with Korean women, however, foreign women can initiate a handshake with Korean men. Elderly people should always be greeted first as a sign of respect. Avoid introducing yourself, third-party connections are recommended to initiate introductions. When meeting an older Korean counterpart for the first time you might be asked multiple questions about your age, job and education. This is mainly to help place you in their hierarchy.

Gift giving is an important part of doing business in Korea and initial gifts can be a company pen or stationary with your company logo. When visiting someone’s house, always bring a gift such as fruit, high quality coffee or tea, chocolates or crafts from your home country. You can give liquor to a man but not to a woman. Use both hands to give and receive gifts; the gift is never opened in the presence of the gift giver. It is polite to reject a gift several times before accepting it.This block takes full on XS but 9/12 on others.

Confucianism plays an important role in everyday life and it affects business and management practices. Korean people have always lived under authoritarian regimes preventing individual thinking and behaving, and influencing management styles. Korean management or ‘kwalli’ is a combination of top-down and middle management-up with less documentation required than in the US and Japan. An ideal boss in Korea is paternalistic and a strict boss. Korean management strives for perfection and offers their absolute loyalty to the company. Managers have to train their staff on the philosophy of the company and what attitude and behaviour is expected of them using meetings, speeches or lectures. The Korean version of ‘carrot and stick’ or ‘Shin sang pil bol’ is used to motivate staff through giving incentives or harsh punishment on a group basis. Larger Korean companies are known for their severe scolding and criticism to manage staff. This is a sign that the boss is a strict father who then later will likely invite that employee for drinks as a loving father will do. This technique is NOT recommended to foreigners. It is said that Koreans are loyal to a boss and not a faceless company, and thus the relationship between boss and subordinate is very important. Korean and foreign bosses are responsible for developing and maintaining good relationships with their staff. Organisation structures are centralised and formalised with authority concentrated in senior levels.

As a group culture an individual might represent the group, however, decisions are made through consensus with submission and respect given to the most senior and oldest person at the top. The traditional system of decision-making is called ‘poom-mee’ that can be directly translated as a proposal that is submitted for deliberation’. The main function of ‘poom-mee’ is to spread responsibility among stakeholders. The decision-making system will vary depending on the size of the company, and the smaller the company the less likely that they will rely on consensus to make decisions. Senior managers have the authority to make decisions on their own, however, generally there is a certain amount of consulting among middle management and upper management before major decisions are made, and thus foreigners should invest in building relationships with all levels of management.

Don’t confuse Korea’s history and culture with their Asian neighbours. Koreans are very proud of their unique culture. Koreans are sensitive about Japan and the cultural history between Korea and Japan - do not give gifts made in Japan or bought in Japan.