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Clément & Romain
From June 11 to July 24, 2022, we discovered South Korea and Vietnam for the seventh and eighth stages of the Managerial Odyssey
The opportunity for us to meet 26 companies and 30 employees! This was a very intense moment, marked by the recruitment of the next duo of the Managerial Odyssey in addition to our professional meetings. This recruitment process us with joy, considering the number of applications and the motivation of the people we met.
Many young people are interested in the project, which perfectly illustrates the changes underway and the need for new generations to invent new ways of working. L’Odyssée Managériale is in good hands and the association will continue to meet those who are inventing the professional world of tomorrow.
Like Norway, Iceland, Brazil, Colombia, Canada and the United States, our understanding of South Korean and Vietnamese culture is not exhaustive, and the examples we will give you do not reflect the behavior of all companies.
We spent 3 weeks in Seoul. Too little to assimilate all the characteristics of this fascinating culture, but enough to understand its main features and complexities. Our western, French prism was turned upside down during this period, and we loved it.
Our first professional meetings in Korea are very special. We have the impression of going back 20, 30 years. We were talking about a culture characterized by caring in Norway, gender equality in Iceland, new forms of governance in Brazil and now … hierarchy, control and “military managers”.
Our first reaction is that of most Westerners: “These Koreans are crazy. We don’t understand the way Korean companies work.
But what were we going to say about managerial innovation? After a few days on site, we understand that we have to remove all our western biases and take a full interest, without prejudice, in this incredible and complex culture. This is the principle of otherness.
And finally, for the last 4 months we have been hearing that the human being must be at the heart of management methods, that hierarchy and control must be eliminated, etc… South Korea advocates the opposite and the country is simply impressive economically. Let’s try to understand how this system works and especially, why it works.
On the spot, we spend a lot of time trying to meet local people. This is not an easy task because Koreans do not necessarily make connections and do not necessarily want to speak English (although some of them speak very well).
At first, we met mainly French, French-Koreans, or Korean-Americans. Then, we finally managed to talk with some locals.
South Korea is the country visited where the impact of the societal culture on the managerial culture is the greatest. Therefore, a historical point is in order.
To understand the managerial culture, it is essential to understand the country’s recent history.
The Japanese domination:
Between 1910 and 1945, Korea (still unified at that time) was under Japanese domination from a military point of view (presence of Japanese troops on the territory), an economic one (use of raw materials, exploitation of wealth for Japan…) as well as from a cultural perspective (prohibition to speak Korean, mandatory learning of Japanese…). The relations between the two countries are forever marked, which we feel during our cultural visits in Seoul. The surrender of Japan at the end of the Second World War finally allowed Korea to regain its freedom.
The separation of Korea into two states: A short-lived freedom since, in the context of the Cold War, the United States and the USSR decided to draw a demarcation line cutting the Korean peninsula in two: the northern zone would be under Russian influence and the southern zone under American influence. The North and the South were thus each constituted as an independent state. Entire families find themselves separated by an impassable border overnight.
The Korean War: On June 25, 1950, North Korean troops invaded Seoul. The Americans retaliated by attacking their fleet at Incheon. An ideological spiral was set in motion, leading to a three-year war known as the Korean War.
The Rise of Dictatorship: From the end of the Korean War, South Korea was under a dictatorial regime. After several hard struggles by the population, a lasting democracy was established in South Korea in 1987.
South Korea has undergone drastic transformations in recent history.
For the past 50 years, the country has enjoyed exceptional growth and integration into the global economy.
In 1960, its nominal GDP per capita was comparable to that of the least developed countries in Africa and Asia, such as Cameroon and Indonesia, at US$260 per capita.
In 2017, its nominal GDP per capita is almost US$30,000, the same level as Spain. South Korea is in 2021, the 10th largest economy in the world and the 6th largest exporter.
This economy has developed economically through the “chaebols”, the large Korean groups (Samsung, LG, Hyundai…) often directed by large families and with a sprawling development.
Previously cut off from the international scene, the country is now very visible and has built its soft power through K-pop, tech and TV series.
In our opinion, the impact of this recent history has had major repercussions on the functioning of Korean enterprises:
As you may have read, South Korea has experienced a rapid economic development. This “Korean miracle” is partly explained by a very precise organization within companies, which strongly depends on the societal culture. Here are some explanations.
During our business visits and in our everyday interactions, the importance of hierarchy was striking.
Often criticized in France and other western countries, we quickly understood that it is essential to the smooth running of Korean society and companies.
Audrey, Country Manager of Ipsen, explained to us that South Koreans are very quick to try to place themselves in relation to each other, according to age, social status, profession…
As long as two people do not position themselves in relation to each other, they continue to dig. Once the positioning is done, the level of language used will not be the same. The one “below” will use greater marks of respect and a particular level of language.
There are different degrees of language in South Korea depending on who you are talking to. The language structure is an illustration of the hierarchical organization of the country.
This need to position oneself in relation to the other is also found in the professional world. Isabelle from Rainmaiking used the example of the business card. Koreans give their business card in the direction of the reading in order to immediately situate themselves hierarchically in relation to their interlocutor.
Olivier, CEO of Asiance, explained the importance of titles in Korean companies. In the professional context, Koreans do not call each other by their name but by their professional title (manager, assistant, director…).
We have talked with several French managers who have tried to abolish titles in companies in order to return to a more human way of working, where the person is not defined by their position. This initiative has often been in vain for two reasons:
Thus, removing titles is an excellent way to disorient teams and scare away talent by preventing them from having a clear professional status, which is essential to assume one’s role in the company.
Hierarchy, promotions and seniority: We told you that the societal culture strongly impacts the managerial culture in South Korea. The promotion system in companies is a perfect illustration.
Bryan from Adecco, explained to us that before his arrival in 2019 as Country Manager, promotions were favored by seniority. A young person, even a high performer, could not move up the ladder because he or she was not an authority in the company.
Jérôme from Decathlon shared with us the complexity of promoting a young person with South Korean teams. Indeed, even if the young person has, on paper, a superior hierarchical position, in reality, he or she will have difficulty contradicting an older employee in the team or being legitimate in making decisions in relation to the latter.
This respect for hierarchy, social rules and older people is partly explained by the influence of Confucianism in South Korea. Confucianism is a major current of Chinese thought, drawn from the teachings of Confucius.
It allows the emergence of a very advanced hierarchical classification of the layers of society, the obedience to the powerful and contributes to place the man at the center, the woman having little voice in the classical texts.
Even if the importance of Confucian moral principles declined somewhat in China following the Cultural Revolution, the latent influence that Confucianism exerts, for example, on the social model of South Korea, but also of Japan or Vietnam (respect for ancestors, filial piety, obedience to elders, patriarchy, etc.), is central.
Consequently, the authority figure in South Korea is often embodied by an elderly man. This complicates the relationships in the company. The promotion of a young woman to the rank of manager, for example, is delicate in view of the above. As a result, gender inequalities in South Korea are significant.
The respect of seniority gives rise to surprising situations. Olivier from UBAF told us the example of an employee of a Korean team who had white hair and looked older than his manager. Since the older employees were the authority figures, the situation posed a problem. The latter ended up dyeing his hair black to look younger than his manager.
Hierarchy is also illustrated in the structure of offices and meetings. Valentin from the company Bluebell explained to us that they had redone the offices in 2018, breaking down the walls, opening up the space and putting glass bays for the managers’ offices and no longer closed spaces. Hierarchy is embodied in the organization of the offices with well-separated spaces between managers and employees.
Another example made a huge impression on us: the organization of the offices at UBAF. Olivier, the director, described to us the logic of control in which the offices were built. The director’s office is in the opposite direction from the offices of all the employees. Thus, as soon as the director leaves his office, he sees the computers of all the employees and can control their work. This is an office organization that he can’t necessarily change today.
Concerning meetings, Audrey from Ipsen told us that when she arrived in the South Korean offices in 2021, speaking in meetings was monopolized by the most senior managers, mostly men. The rest of the team spoke very little and did not give their opinion.
The impact of hierarchy on decision-making and initiative-taking:
At the beginning of this article, we mentioned the figure of the “military manager”. In some South Korean companies, the functioning of the teams is comparable to that of an army: an experienced leader who gives orders, and disciplined teams who apply them.
Several elements explain this functioning:
– An education that restricts initiative, questioning and debate.
Isabelle from Rainmaking emphasized the difference between French and Korean education. For example, in France, we are used to answering open-ended questions, dissertations and text analysis. Formats that push us to think, to question.
In South Korea, assessments are based on multiple choice questions. Students are not asked to think, question or construct a statement but to apply it. In the end, the student who is able to learn the most content and apply it concretely, without questioning his or her learning, is the one who will do the best.
We can also find this approach in the company: the performance of an employee is not measured by his or her ability to question, to take initiative, but rather by his or her ability to apply the instructions given as quickly as possible. In other words, in Korea we act first, in France we analyze.
– The importance of the collective. Paul, a French-Korean director at PwC, noted the importance of the collective in South Korea, the necessary homogeneity of groups.
A person who goes off the rails, who is different or who takes too much initiative would be badly perceived by the group, by the collective. The “us” culture is very strong.
There is an important paradox here: Koreans compare themselves a lot and are regularly in competition (on education, on sports, on work, on money…). A paradox thus arises between the importance of the collective, which governs the life of Koreans (they all belong to groups) and the individuality within these groups.
– The respect of hierarchy and decisions coming from above in connection with Confucianism and the organization of society.
– Fear of losing face: leaving one’s comfort zone, taking initiative or questioning orders also means taking the risk of making mistakes and losing face. The relationship to mistakes is not the same as in the West. Making a mistake also means making a fool of yourself in relation to the group. Audrey from Ipsen told us that before she arrived, the teams set perfectly achievable objectives in order to exceed them.
The most striking example we heard about the execution of orders was at Korean Air. A pilot made a maneuver error and made the wrong decision. The co-pilot did not dare to tell him and question the maneuver, which led to an accident.
Efficient yes, but at what cost?
Professional and personal life are clearly distinguished from one another in South Korea. It is impossible to talk about one’s emotions and problems in the company. Relationships during the day are very cordial and professional. Bryan from Adecco told us that before he arrived, the teams hardly spoke to each other. There is a lot of pressure to perform and the work days are quite long. Psychological issues are not much discussed in companies.
The chaebols still play an essential role in the economy despite the advent of large startups. They remain the royal road to follow to be socially valued by one’s profession.
The pressure to join these groups is immense and the recruitment process is very demanding. Only certain universities provide access to them. Children are under a lot of pressure from a very young age to be selected in these universities. Thus, we have seen “post-schools”. These are private schools in which South Korean students are enrolled after school. We saw students of about ten years old coming out of these places at 10 pm.
The weight of society is quite overwhelming, and comparisons are present everywhere and at all times. People are beginning to talk about this issue, notably through widely publicized suicides such as that of Kim Jong Hyun, a K-pop star.
According to the Organization for Economic Cooperation and Development (OECD), the suicide rate in South Korea stood at 24.7 per 100,000 people in 2018, the highest among OECD member countries. This figure recorded in 2018 by the OECD is double the average of the international organization gathering rich countries (11.0 per 100,000).
The culture of Hoesik, the Korean-style after-work party, is still very present. It is a kind of business meeting, organized in a restaurant or bar after working hours. Officially, it is not part of work; unofficially, it is recommended to participate in it because it helps to strengthen the collective spirit and professional relationships. Paul from PwC explained that these moments are essential for South Korean workers, to decompress and build personal relationships.
Bryan from Adecco told us that important business decisions were made during these moments before his arrival. It’s a time to mix business and personal life. Often drunk, these evenings can be an opportunity for some employees to express their problems and to open up.
The advantages of this management model:
Economically, Korean companies are quite impressive. Decisions are made quickly and implemented immediately. They are based on hierarchy which limits debate and conflicts.
South Korean companies have a very strong capacity to adapt. Olivier from UBAF explained to us that they are not the most innovative. On the other hand, they observe the market, the needs, the technological innovations and adapt very quickly thanks to decisions based on hierarchy.
Audrey from Ipsen described the adaptability of Koreans through “nunchi”, or the ability to listen and understand what people are thinking and feeling in a very short period of time and to adapt one’s behavior accordingly. A rare quality, which she believes is the “secret” of Korea and part of the Korean educational process.
Valentin from the company Bluebell evokes the culture of “Ppalli, Ppalli” which literally means ” quick, quick ” in French. South Korean companies are pragmatic and make decisions quickly. Everything has to go fast. Paul from PwC, underlined the go-ahead side of the Koreans. They go in one direction, then adapt the trajectory very quickly if necessary.
In South Korean companies, there is a form of “protective paternalism” on the part of managers. Olivier from Asiance told us that the manager must be present at the most important moments in the life of his employees (wedding, death of a relative, etc.). Cedric, the French-Korean director of FKCCI told us that the Korean director is legally responsible in case of an accident at work. Thus, he takes care of his employees.
Quick decisions, a clearly identified decision-maker, a strong adaptability, impressive economic performances: on paper, the South Korean model seems really efficient. In reality, it is effective, but the consequences on the quality of life at work are significant.
Nevertheless, these parties are also very criticized by a share of South Koreans:
Thus, the Hoesik contributes to this collective culture that does not always respect the personal needs of the individual.
Changes in the labor market?
We talked earlier in the article about the paradox between modernity and tradition in South Korea. The covid crisis has had a real impact on working life and the young generations are starting to take ownership of social issues.
Will we see a professional revolution in the South Korean market driven by the newer generations?
One thing is certain: mentalities are changing, slowly but they are changing.
Cédric from FKCCI explained that the former progressive South Korean president Moon Jae-in had started certain projects: reduction of legal working hours (40 hours per week), laws on work/life balance. Moon was brought to power by the youth, who were eager for societal and professional changes.
The covid crisis has had a significant impact on the way people work. Remote working has allowed for a better life balance. During covid, restaurants were closed early, so it was impossible to continue the Hoesik culture. Also, commuting times are long in Seoul. Thus, the number of hours spent in the professional context was reduced.
Olivier from Asiance believes that Korean companies that do not adopt remote work will soon have difficulty attracting talent. Some companies are adapting even if the face-to-face culture remains dominant. The need for flexibility does exist in South Korea, but it is still difficult to implement. Many commercial agreements are made face-to-face and trust is still difficult to establish at a distance.
The younger generations refuse not to exist for themselves, having witnessed the example of their parents who are the sacrificed generation (a lot of work and sacrifice to bring the country out of poverty). They sometimes refuse to have children to avoid the pressure of education.
Entrepreneurship is spreading and new startups are disrupting the South Korean management culture. Minkee Kim, from the Protopie company, talked about the transformation of the entrepreneurial ecosystem under the impulse of unicorns like Naver or Kakao.
These startups have new ideas and attract young talents, which pushes the chaebols to react. Romain, from LG, has seen these evolutions since he works in the company. He tells us about the flexibility of the working hours (40 hours a week, minimum 4 hours a day), the work clothes (he can work in shorts), the more peaceful relations (strong hierarchy but possibility to discuss) or the existence of a junior board to improve the company life.
With the opening of South Korea to the world, many students have had the opportunity to travel to Canada, Europe or the United States. Some of them have lived and worked for several years in these countries. They come back to South Korea with a different mentality and influence the way they work. This is the case of Jason Minkee Kim of the Protopie company or David Taehyung Kim of the Soma company, two Korean-Americans, who are behind the launch of WeWork (a coworking space that is very different from the traditional office organization in South Korea) in Seoul.
Psychological issues are starting to spread in society, especially in movies. Isabelle, Innovation Manager at Rainmaking, explains that the figure of the psychiatrist has gone from being almost crazy to being the hero in movies today.
In spite of the evolutions mentioned, resistance to change remains strong and some points are still too socially structured to change.
We were very surprised by a discussion with Eunjoo Lee, a young employee of the FKCCI company. Contrary to what we thought, she does not want to abolish titles in companies because they are still too socially important.
In the same way, the absence of Hoesik in certain companies poses a problem: there is no longer a moment of sharing between the teams. Moreover, there is strong resistance from managers who wish to perpetuate this practice. Hierarchy remains, as does control. Inequalities between men and women are still very important.
We like this answer from Eunjoo when we ask her about happiness at work.
She explains to us that work in itself gives a social existence which is essential to social and therefore personal balance. Thus, the professional status takes over the daily problems that accompany it (pressure, control culture, work-life balance…).
With a professional status below her expectations, she would be unhappy. Therefore, the question of happiness at work is not the same as in our country, nor are the struggles.
South Korea captivated us! A fascinating country that aroused our curiosity about the relationship to performance, professional status, decision-making and hierarchy. A country that takes the opposite of what we had seen before (horizontality, flexibility …) and that inspired us just as much.
We ended our Odyssey by staying in Hanoi for more than 3 weeks! The first steps in the city are unforgettable, the smells of food, the noise of scooters’ horns, the heat, the humidity contrast with the quietness of our neighborhood in South Korea. The country is growing and you can both see and hear it.
The difference between the North and South of the country:
The first point that came out of our various exchanges, especially with French expatriates, is the marked difference between the North and the South.
According to Sophie – director of the CCI France Vietnam – the French and American imprint left by the wars is felt in the South. More capitalist, more Western, less political, the region is led by the economic capital Ho Chi Minh which represents 30% of the country’s GDP.
We will not visit this region, but it seems to differ from the political capital of Hanoi, where the propaganda signs and the palaces of the single communist party set the tone.
Our interlocutors are quick to mention “the communities”, social groups to which each individual can be attached such as family, alumni groups, sports teams etc… and the difference in importance of these communities in the two regions. Interacting with these communities in the North is essential to finding work or creating value. This is less the case in the south of the country.
More than communities, Rémi, MLR Factory’s general manager, talks about “protectors”: people who will help you to face the Vietnamese administration (concentrated in Hanoi) which is still quite corrupt (94 out of 180 according to the corruption perception index). These protectors – which can be local companies with whom to associate – can be essential if there is a misjudgment of the law (tax, rent, administration, contract, etc…).
As Rémi says: “when you do your PESTLE ana in Vietnam, you have to focus on the P, but it is pleasing”.
The influence of Confucianism:
Just like South Korea, Vietnamese culture is strongly influenced by the values advocated by Confucianism.
The most important social group in Vietnam, we observe it in the evening during the dinners where all the families meet in the numerous restaurants of the streets of Hanoi, during the night markets, where most of the businesses are family. It is common to see several generations living under the same roof (up to the grandparents).
Placed above the individual; Sophie explains that much of the country’s cultural characteristics are partly shaped by its rice culture. Historically, this type of production was expensive, labor-intensive and could not be done individually. Cooperation was therefore essential. We saw this for ourselves when we visited northern Vietnam (Ha-Giang Loop) after the Odyssey, including children helping their parent grow corn.
Respect for authority: Vietnamese society is heavily hierarchical with a strong emphasis on age, social status and profession. This system is marked by obedience and respect for parents and elders, the fact that teachers are considered as “masters”, and in companies, respect for promotions linked to seniority. There is often only one person who speaks in meetings: the CEO.
Emphasis on education:
It is common for parents to make huge sacrifices for their children’s education. We were very surprised by the level of English of the young Vietnamese who approached us in the street.
Family Business & survival entrepreneurship:
Another contrast with South Korea, Vietnamese entrepreneurship and family business!
By meeting Quentin, Country Manager of Schoolab Vietnam and Rémi from MLR factory, we understand that many locals have a “family business” next to their main job.
Quentin takes the example of one of his employees who also sells baskets of fruit, vegetables and eggs on the internet while at the same time marketing her husband’s website. With a crazy growth in the country (6% over the last 10 years, and 8% to come in 2022), any entrepreneurial project can be an economic opportunity for the Vietnamese.
However, Rémi talks about subsistence entrepreneurship: “When salaries are low, what do you do? You must get by, by undertaking several jobs during the day. But the day Vietnam is more developed, this will to do business, to innovate and be entrepreneurial will be very positive.
Whatever happens, the Vietnamese will always be able to rely on their family, the intermediary of a State which prefers to take care of security.
This can be a problem for business leaders! Indeed, Quentin explains that it is quite frustrating to invest time on Vietnamese talents knowing that they can leave the company overnight. For example, the turnover rate in IT is between 30 and 40%. Full employment, family business, family support, rapid economic growth, all arguments that push the employee to leave, sometimes overnight, without regret.
One of the ways to avoid this situation is to invest in “people development”, team building, training and activities to increase the retention rate in the company. Investing in the person so that they feel involved. Quentin gave us the example of a company that had just invested $1000 per employee for a seminar.
Interesting observations & practices:
Similarly to South Korea, we find an extremely pronounced hierarchy in the companies. It doesn’t matter how small the contract is or how many employees there are, the CEO has the ultimate say. In addition, decision-making takes longer because it must go through the entire hierarchy. Sophie tells us “If you don’t know the top management, it can take months”.
A common practice in Hanoi offices is to take off your shoes before entering the office! For Tuong Vu Van, Vietnamese director of Eco-mobile, this allows employees to feel “more at home”.
Lastly, another fantastic practice: the nap! It is religiously followed in Vietnam and lasts almost 1 hour. Tuong Vu Van – despite being the CEO – does not hesitate to show the example to his employees so that there are no bad judgments or perceptions of other employees on the practice!