06 Sep 2016 20:09 IST

The story of Korea’s economic turnaround

An IIM-Bangalore students with Jae Choi

IIM-B students in Korea have an engaging session with a Senior VP at corporate holding company Doosan

Can attending lectures on a Sunday morning be fun? Did you ever think you would leave the classroom at 5 p.m. wishing the classes never ended? Thanks to Jae Choi, Senior Vice-President at Doosan, this was exactly what happened to us.

Jae started his session with a vivid description of South Korea’s miraculous growth story.

All in it together

The Asian Financial Crisis caused a dramatic plunge of the Korean won in the external markets during the fourth quarter of 1997. However, the country, which was teetering on the brink of a bankruptcy, resolved to find a way out. As a first step, it sought a loan of $58 billion from the IMF; this came with its share of harsh restrictions.

Koreans donated all the gold they had received as traditional gifts received on the birth of their children in order to build the much-needed foreign reserve. There were widespread campaigns that encouraged donating foreign currency and buying local products.

As nationalist citizens of a country that relies entirely on imports for oil, Koreans stopped using cars and other motor vehicles to curtail any bleeding of foreign reserve.

‘Change everything, except your wife’

In the 1980s, the Chaebols — South Korea’s ‘Big 4’ companies nurtured by the government — strategised to achieve rapid growth by replicating the products of successful forerunners in the international markets. For example, Samsung’s only goal at the time was to beat Japanese rival Sony by buying all its products, tearing them apart, and reverse-engineering them to build their own products on a massive scale but at a cheaper price.

Organisations were strongly hierarchical with decisions made at the top and thrust down through the lower levels in the pyramid. The culture of implicit obedience made the people refrain from participating in decision-making, questioning authority, or even just expressing dissent. To the people, it all made sense — they received a consistent income and a good standard of living by simply going by their leaders’ words.

Such an attitude can be attributed to Confucianism, which is deeply entrenched in the culture, and the country’s glorious history that has seen leaders who were strategic visionaries taking the right decisions for the people who, in return, perfectly executed the orders, no questions asked.

In 1995, Samsung decided to revamp its entire organisation, including its products, to correct past blunders that were, often knowingly, committed to achieve quick success. Samsung’s Chairman Lee famously stated: “Change everything except your wife and kids” that set the direction for Samsung’s future.

Managing the Millennials

Sadly, not a lot has changed for South Korea in terms of conducting business. Employees still do not express their thoughts and opinions to their superiors, as dissent is still considered offensive.

Organisational dynamics get more complicated with the influx of the millennial generation into the workforce. Millennials are a more open-minded, academically strong and tech-savvy bunch whose way of acquiring information is shaped by social media, which facilitates an exchange of ideas beyond any barriers.

When these assertive, discerning young graduates enter the workforce, they are perplexed at the unwritten credo of the power structure that keeps them from openly expressing ideas — many of which could potentially become the next big thing — to their archaic middle managers, who still hesitate to take on the CEOs.

Jae concluded the session by highlighting this issue as a critical roadblock in South Korea attaining the next level of growth.

Consulting Workshop

During the afternoon session, Jae organised a consulting workshop, in which he shed light on the principles of design thinking and McKinsey’s seven-step problem-solving loop. He gave us a simple consulting assignment of designing a wallet for the person sitting next to us. What began as a trivial task turned into an exercise that offered a lot of insight into our personalities.

Jae encouraged us to frame questions that would reveal the answers to why someone would want a wallet at all — is it just to carry bills and currency, or is it to carry memories, such as photographs or handwritten notes? Or was it just to simplify life and organise things methodically? A truly baffling range of factors in designing a wallet!


Like all the other days we have spent in the immersion programme, this one too brought a different take on the business environment in South Korea — the country we thought we were acquainted with until yesterday, only for our views to be challenged the very next day.


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