Analysis of Leadership Styles in Korean Companies: A Report

This report analyzes leadership styles within Korean companies, focusing on the transition from traditional, hierarchical structures to more innovative approaches. It examines the impact of the chaebol system and Confucian values on leadership, contrasting these with Western leadership styles to promote creativity and faster decision-making. The report details the practices of companies like LG and SKT in adapting to changing business environments, addressing the challenges of implementing Western leadership styles, and providing insights into the potential for transformational leadership. The author discusses the need for change due to the evolving workforce, and concludes with a review of changes in Korea's business environment after the 1997 financial crisis, using a survey of foreign business people to highlight areas needing improvement.

Running head: INTERNATIONAL BUSINESS MANAGEMENT
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Name of Student
Name of the University
Author Note

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Table of Contents
Response to question 1: Leadership Style.......................................................................................2
Response to question 2: Practices adopted by LG and SKT...........................................................2
Response to question 3: Western leadership styles.........................................................................3
Response to question 4: Problems of the Western Style.................................................................4
Response to question 5:...................................................................................................................4
References........................................................................................................................................6

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Response to question 1: Leadership Style
According to a recent survey done by the wall streets journal, it said that the miracle is
over, and raised the question that what will the Korean companies do in the present world and
how will they operate? Further the journal also criticized the leadership style used by the
Koreans, the system of family succession, and other practices adopted by the Koreans. The CEO
of Samsung who had resigned the company due to various scandals, returned to the company and
still leads the same has also noticed the fact that change is needed. As this can be understood
from the fact that he said in a one of the meetings that Samsung is presently being faced by a
crisis and that even the company does know what will happen to them and they are expecting the
products to become obsolete. The CEO is also of the view that a change is needed in the way the
Korean companies are managed in order to become successful in the changing circumstances. A
leadership style is needed that supports innovation, creativity, openness and other similar
practices. According to me, a new leadership style is needed in Korean companies because of the
changing needs of the present workforce and because of diversity of the workforce and to deal
with the same, a change is required.
Response to question 2: Practices adopted by LG and SKT
In order to deal with the inefficiencies brought about by the traditional style of leadership
in the Korean firms, SK telecom introduced a system in order to reduce the problems related to
hierarchy, and therefore required the managers and workers to address their issues to one
classification that is the manager. This step was undertaken by the company in order to overcome
all the stodgy barriers faced by the companies and to encourage innovation and creativity in the
organization. This was a big step for the Korean industry because a country where there is a

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culture of taking order from seniors without asking question to them, and where people from the
lower levels of the hierarchy cannot give any ideas this step by the company was a big step.
Many other companies such as Korean telecom followed the same system and therefore dropped
the system of 5 ranks hierarchy that is mostly followed in most of the Korean companies. Similar
activities are carried out by the Company LG. The main result of these activities is that the
organizations following the non-traditional techniques are improving the innovation and
creativity of the employees of the organizations.
Response to question 3: Western leadership styles
In order to unfreeze their purported stodgy, hierarchical, family-style leadership, these
companies need to import Western leadership styles in order to improve innovation, encourage
creative ideas, faster decision making and other benefits (Estes, 2012). The Authoritarian
leadership style used in the Korean companies helps in taking decisions quickly and in a better
way. However that leadership style has negative impact on the innovation and creativity of the
employees as they are required to take all tasks given to them without asking any questions.
They are not allowed to communicate with their superiors freely. This is in fact some of the
major reason for the downfall of many Korean companies and as a result they had to face a lot of
problems and failures. Therefore a leadership style needs to be imported from the western
countries that can help in creating an environment and a culture where people can easily
communicate with each other and share their ideas and opinions. A leadership style that being in
the matrix structure is required and not the hierarchical structure of the organizations.
Transformational leaders can therefore help in changing the present scenario of the Korean
companies and help them in regaining their positions in the market (Choi, Kim & Kang, 2017).

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Response to question 4: Problems of the Western Style
The traditional leadership style which includes closed and hierarchical style is suited for
the Korean culture because they have the value of seniority, family and loyalty. This leadership
is also suited because Korea scored a high score in uncertainty avoidance that means that the
Koreans look for a society that that increases control and reduces uncertainty and therefore the
structure of chaebol follows the same. The interests of the Chaebol society are held together by
the taipan or the family autocrat. This is the person who takes all the major decisions of the
company and has power. The taipans are determined to achieve their goals and become
aggressive in doing the same. Moreover the culture of work ethics is followed by the traditional
leadership style and therefore these all are the areas because of which the western style may fail
to get the support of the employees. The KT or the Korean telecommunication faced problems
after implementing the new system for reducing the hierarchical system because according to the
survey, the majority of the employees favored a return as against the traditional system which
helped in boosting the morale of the employees. In order to overcome the barriers, proper
leadership is required such that the employee’s goals can also be understood and such that the
leader can make application of different motivational techniques to carry out the changes
appropriately.
Response to question 5:
Yul Kwon, O. (2006). Recent changes in Korea's business environment: views of foreign
business people in Korea. Asia Pacific business review, 12(1), 77-94.
This article discusses about changes in the business environment of Korea after the
financial crisis that took place in 1997. For this purpose a survey was conducted of all the foreign

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people working in Korea. Korea has taken many steps to improve its foreign business and also to
improve its business environment, however people from foreign countries have a negative
perception about the Korean companies and that there is room for improvement in the same.
Bureaucratic power has to be removed from organizations, all types of advantages being enjoyed
by small firms and labour market inflexibility has to be improved. It was also found that the
Korean people have to become more open to foreign business and people in order to become
successful.

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References
Choi, S. B., Kim, K., & Kang, S. W. (2017). Effects of transformational and shared leadership
styles on employees' perception of team effectiveness. Social Behavior and Personality:
an international journal, 45(3), 377-386.
Estes, D. (2012). Korean and American Leadership Styles in Business.
Yul Kwon, O. (2006). Recent changes in Korea's business environment: views of foreign
business people in Korea. Asia Pacific business review, 12(1), 77-94.