Am.Not.So.Wise

The impact of external political factors on business environment of South Korea

1. Relations between the two Koreas also affect the business climate. After the North-South Korean summit was held in June 2000, the range and frequency of inter-Korean contacts increased dramatically for a time. Seven cabinet-level meetings, including a Defense Ministerial, were held. Four reunions of families separated since the Korean War has been held, briefly reuniting several thousand members of divided families. However, key economic projects and agreements have not been implemented, including re-linking the main rail line between South and North, establishing a Special Economic Zone at Kaesong in the DPRK, and opening a land route for southern tourists to the scenic tourist zone of Mt. Kumgang in the North. Presently, there is little official contact between the two governments, but private exchanges continue. Although North Korea continues to maintain and develop its massive military force, military tensions on the peninsula have been reduced since the June 2000 summit.

2. The U.S.-South Korea relationship has continued to grow in breadth and depth after the independence of South Korea in 1948; the two countries are friends, partners and allies. South Korea and the United States today are working together, both in the region and in the rest of the world, to combat international terror and to advance democratisation and human rights.

3. The United States has a strong security relationship with the South Korea and is committed to maintaining peace and stability on the Korean Peninsula. The United States is obligated under the 1954 U.S.-Korea Mutual Defense Treaty to help Korea defend itself from external aggression. The United States maintains about 37,000 uniformed personnel in the country, commanded by a U.S. four-star general who is also commander of the United Nations Command. U.S. forces include the U.S. Second Infantry Division and air force squadrons.

4. In the past, South Korea served as political pygmy in the pockets of the U.S. in Asia. However, South Korea has repositioned herself as a balancer of security in the region that poses little threat to any of the other countries in the region. A good example is the ‘sunshine’ policy of cooperation and friendship with North Korea. Also, the distancing of South Korea from the U.S. and its willingness to criticize the policies of its former mentor, has given new credibility with China and North Korea. To better describe the current situation, South Korea is able to act as a mediator between N. Korea and US, Japan & China. This political situation can help South Korea to maintain a good relationship with those countries and her internal society stability. This is very critical for South Korea to develop her economy and improve her business environment. Also, the good relationships between those country help to promote the foreign investment to South Korea.

HBR 2002 – by Nigel Nicholson

The article starts off by mentioning a very valid fact about theory, i.e. motivation strategy works with only a fraction of employees and a smaller fraction of managers. Interesting enough that the author used hero like Nelson Mandelas or Winston Churchills to illustrate that exhorting managers to become one of those will get you no where. The author answered the question in the caption by saying that the question itself was wrongly asked. The fact is that those so called problem people in an organization that is taking up disproportionate amount of manager’s time can’t be motivated. ONLY the problem people THEMSELVES can.

The article used 2 examples to demonstrate typical cases of problem staff and how managers make common mistakes. Most managers would believe that motivating problem people is like selling his own idea, value and perception. It’s like if I can see he/she should see it the same way and it’s just a matter of talking to him/her again or let’s find someone who can have friendly dialogue to do the talking for me. According to the article this approach proved to be wrong and in most cases you’ll only get “sure, boss” and the problem keeps repeating itself over time. It is an impossible goal for the managers because changing people’s character is impossible. Change comes from within.

RECIPROCITY – this is about “give what you want to receive”. The best way to make friend with others is to give before you demand. This is the same to say that open up yourself before you expect others to open up. This behavior is especially important when one attempts to build good working relationship with another department or another company in a joint venture. Being too “mean” on things and do not show your generosity before demanding assistance will be harmful to the relationship in the long run.

SOCIAL PROOF – this is about “using peer power (or pressure) whenever it’s available”. This appears to be common sense but we seldom can harness its power at work. Human being is species that live together in groups. Our basis instinct is to follow behavior of others in the group that we live in. If you browse outside a restaurant that you have not been to and see nobody inside you surely will hesitate to step in. If you see a packed restaurant you surely will give it a try. If you can spot a friend of you eating inside a restaurant you definitely will jump in without hesitation. At work a charismatic leader will first capture the “heart” of a few people before making an attempt to convince a much larger group publicly. A risky and controversial approach will win alliance much easier if a few at the meeting support your proposal or even defend on your behalf. Gaining consensus by a group this way is a lot smarter than saying “I’m the boss, let’s do it”.

In late 1997 the bubble burst, banks pulled out, demanding immediate repayment of some $60billion in short-term loans which nearly pushed Korean banking system to bankruptcy.

On reaction banks cut loans to highly indebted domestic corporations, forcing them towards brink of insolvency. Korea then turned to IMF for help to pay its foreign creditors and control of Korean economy was handed over.

IMF took advantage of the situation. Instead of restoring control over captital flows (like Malaysia) IMF used the opportunity to destroy what remained of its East Asian model and replaced it with a market-driven neoliberal system.