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International Business South Korea International Business South Essay

International Business South Korea International Business

South Korea: Introduction and Business Potential

South Korea is the 12th largest economy in the world. It has made tremendous growth in all manufacturing, industrial, and services sectors to become economically and technologically strong. Due to rapid economic growth and positive governmental behavior, South Korea has become an attractive target country for foreign corporations for their international business expansion strategies (Central Intelligence Agency, 2013). However, these foreign corporations face huge differences in the cross-cultural values, marketing practices and ethical values when they enter into South Korean market (Ball, 2010).

Cross Cultural Differences

Language Barriers:

The most significant cross-cultural difference which the U.S. businesses face in South Korea is the language barriers. In the U.S., people speak louder and more aggressively; whereas in Asian countries like Korea, they are soft in voice tone and communication styles. Moreover, differences exist in the native language and English-accent in the South Korea. This cross-cultural difference can directly impact the way U.S. businesses design their marketing and communication plans for their internal and external stakeholders. For example, they need to institute an organizational culture where employees should communicate with their local (South Korean) coworkers and customers in a voice tone and accent which is acceptable and understandable for them according to their local communication styles. The employees should also take care of fluency level and selection of technical terms while talking or writing to the South Korean stakeholders (Lee & Trim, 2008).

2. Decision Making Style:

Decision making style refers to the way managers in an organization make decisions, delegate authorities, divide job tasks and roles, evaluate alternatives, and resolve organizational problems. Managers in the local organizations in the U.S. give more preference to majority rule; whereas, South Korean managers believe transformational style. U.S. managers prefer group orientation while South Korean managers implement individual orientation at the workplace. The participation of female employees is also higher in the U.S. organizations as compared to South...

Decision making style is critical to be analyzed while expanding internationally due to its direct impact on the employee performance and organizational productivity (Wild, Han, & Wild, 2011).
3. Social Values and Cultural Norms:

There are huge differences in the social values and cultural norms between the U.S. And South Korean customers. Therefore, those U.S. companies that wish to expand to South Korea must keep in view these differences in order to operate in the most effective and efficient way. The major cross-cultural differences exist in the life styles, preferences, eating habits, earning and expending patterns, clothing, and religious beliefs of the South Korean customers (Ball, 2010). For example, the Americans prefer highly-spiced, refreshing, and strong eatables whereas South Korean customers are more health-conscious and avoid fatty products. Similarly, Americans are open-minded; love outing, fashion, and entertainment. On the other hand, South Koreans are quite conservative in nature (Central Intelligence Agency, 2013). This cross-cultural difference is critical for the success of international businesses as it directly affects the social, cultural, and demographic values of the customers. In order to operate in the most effective and competitive way, U.S. businesses will have to offer products that best match the eating habits, living styles, and cultural beliefs of the South Korean customers (Hill, 2013).

Part B: Comparison of Business Practices

1. Product:

The biggest challenge for U.S. companies in the South Korean markets would be to find the raw material suppliers, distributors, and business partners that will facilitate them in manufacturing the desired quality and quantity of products for the South Korean customers. In the U.S., there are a large number of suppliers for every type of material. On the other hand, South Korean market is concentrated with the suppliers and vendors from Japan and North Korea (Lee & Trim, 2008). However, the raw material prices, energy costs, and overhead expenditures are lower in South Korea as compared to the U.S. Moreover, the U.S. companies will have to manufacture products according to the life styles, cultural values, and preferences of South Korean customers in order to avoid criticism or boycotts from the local and…

Sources used in this document:
References

Ball, D.A. (2010). International Business: the Challenge of Global Competition, 12th Edition. Boston: McGraw Hill.

Central Intelligence Agency, (2013). East & Southeast Asia: Korea, South. Retrieved on June 8th, 2013, from <https://www.cia.gov/library/publications/the-world-factbook/geos/ks.html>

Hill, C.W. (2013). International Business: Competing in the Global Marketplace, 9th Edition. New York: McGraw-Hill.

Lee, Y. & Trim, P.R. (2008). Entering the South Korean market: a marketing-planning process model for marketers based in overseas companies, Business Strategy Series, 9 (5): 272-278.
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