After the 1997 crisis, South Korea implemented the same industrial policy as before, promoting R&D as a major means. Yet moving labor from traditional to modern service industries came to mainly comprise the structural transformation. Some chaebol firms became true global players, but chaebol system has become less relevant for structural transformation while their corporate governance remains poor. Foreign ownership has not helped to improve it because of its own problems. The government promoted venture business aggressively, which was not so successful initially; however, venture business has become ever more important over the years. The inducement of foreign direct investment followed a similar pattern, but South Korea’s direct investment overseas came to outweigh foreign direct investment. The labor productivity and financial soundness of small and medium-sized enterprises fell in relation to large enterprises while they came to account for a higher share of employment, deepening the labor market dualism.

South Korea implemented vertical as well as horizontal industrial policies in the 1960s and 1970s. Though they performed better than in other developing countries, the cost of the vertical policy outweighed its benefit. Industrial policies went side by side with the emergence of chaebol in a full-fledged form. Chaebol led the structural transformation of the economy, but they also led the production of non-performing loans, helping to deepen the 1979 crisis. In the 1980s, the government lifted vertical policy but strengthened horizontal policy while restructuring chaebol. In the 1990s, South Korea jumped into the newly-emerging information and communication technology industries with industrial policy. Meanwhile, the government began to promote small and medium-sized enterprises and introduced fair trade policies in the 1980s. By the mid-1990s, chaebol emerged as global players in higher-technology industries; however, they had many problems, the financial market problem being the most serious, ready to precipitate a crisis.

This chapter examines several aspects of work and management, including the following: a look at what constitutes the global work environment for managers; how people’s expectations about suitable managerial behavior can differ; how situational differences can influence managerial behavior; how beliefs about work and leisure can vary across cultures; what motivates people at work in different situations and environments; and multiculturalism and inclusivity in the global workplace

In Korea, chaebol means a business group consisting of multiple affiliates owned by the owners and their families, and whose control is effectively vested in the owner. It also accounts for a significant portion of the national economy. In Korea, it was widely recognized that their existence and activities negatively affect the formation of a competitive market structure, and it is difficult to effectively respond to it only by regulations of competition restraints in individual markets. Based on this perception, the Monopoly Regulation Act, a competition act in Korea, introduced regulations on chaebol in 1987. This regulation focuses on restraining the expansion of chaebols through regulation of holding companies, regulation of equity acquisition, and regulation of unfair transactions between affiliates. Positive and negative views have conflicted on this regulation. However, it can be understood that there is still a minimum agreement on the necessity of regulating chaebols. The future task is to minimize the problem of excessive regulation that limits the free activities of companies and to improve it in a direction consistent with competition policies.

This case study aims to investigate whether and in what ways the relations between the EU and its Member States and South Korea can be used to strengthen opportunities to appropriately regulate and remedy human rights violations in the Korean electronics industry. This study first determines the relevant social forces and historical factors in Korea. This is an essential key to a contextualised understanding of how so-called electronics chaebols are structured. Afterwards, the relevant legal commitments in the Framework and free trade agreements between the EU and Korea are discussed. These agreements lay a foundation for deeper transnational social network relations. A landmark dispute about the freedom of association and the right to collective bargaining in Korea under the Free Trade Agreement is analysed. Finally, this case study determines to which extent people in Korea can use justice institutions when they allege that their rights have been infringed by electronics corporations. All relevant mechanisms are evaluated. An arbitration case between the Korean NGO Sharps and Samsung is discussed. Ten Korean experts have been interviewed to write this case study.

The Korean government has been reinforcing laws and regulations to improve transparency in the investment structures of large business groups as well as their corporate management, in an effort to strengthen shareholders’ rights in individual companies. In this changing landscape of regulatory environment and capital market, the notion of maintaining effective communication and constructive relationships with domestic and foreign shareholders, including institutional and private investors in the capital market, is gaining importance. Shareholder engagement has gained traction in Korea. Institutional investors have become more active, and listed companies have started to proactively adopt shareholder-friendly policies, seeking to improve corporate governance. The Korea Stewardship Code seems to have played an important part. Institutional investors adopting the Code have demonstrated greater willingness to communicate and engage with their investee companies and to bring about changes in corporate governance. This has in turn helped to enhance shareholder value, as some empirical evidence suggests.

Chapter 3 examines business cultures in East Asia, explores their origins, and identifies characteristics that may assist in designing and implementing competition law and policy. It is argued that authoritarianism, paternalism, and collectivism engender dependence on and subservience to corporate authority. Further, business groups (SOEs in China, zaibatsu and keiretsu in Japan, and chaebol in Korea) have played an important role in industrialization. The chapter underlines the links between culture at the level of society and at the level of business communities and enterprises, the norms and practices of such enterprises, and their competitive effects. Given these links, it would be constructive to take account of elements of culture in developing and implementing a well-designed competition law and policy. The chapter discusses six dimensions that should be taken into account in competition law: competition goals, the enforcement of competition law against government-linked companies, the management of family firms, the enforcement of competition law where business groups are prevalent, the design of compliance programmes and the promotion of ‘competition culture’ in East Asia.