There is a wealth of reasons to recommend doing business in South Korea. Start with this: South Korea is the world’s 11th largest economy by GDP. It invests heavily in research and development, with the result that it is a global leader in patent activity and information and technology. Its broadband penetration is 98.5%, the highest in the world, while the average connection speed of its Internet outpaces all other nations. The country takes its education seriously: 99.9% percent of its 50 million inhabitants are literate.
hen you add the fact that South Korea, also known as the Republic of Korea (RoK), ranks fourth out of 189 countries in ease of doing business according to the World Bank, the reasons become even more enticing.
But setting up shop in the RoK or partnering with an existing company there is not a simple matter of obtaining a business license and bridging the language gap. There are major cultural caveats for Westerners to be aware of that make South Korea distinct—even among its Asian neighbors.
Although South Korea is heavily Westernized in many ways, its society has deep-rooted principles based in Confucianism that heavily influence business culture. Protocol, rank, status and respect all play critical roles in the RoK work-world. Building trust and relationships over time—sometimes significant amounts of time—is required for any chance of success.
Grasping the nuances of South Korean business etiquette and adapting is key to avoiding misunderstandings and social faux pas. Below is a primer of the six main aspects of RoK business practices that all Westerners should know.
In the middle: South Koreans place a high value on personal relationships. Because of this, introductions are executed by a third party, preferably inside the target company you’re interested in doing business with. This also conveys that you are trustworthy and signals mutual respect between the parties.
Two-step process: Following a bow, both parties shake hands, each with the left hand placed beneath the right forearm as a demonstration of respect. (Bows are sometimes omitted, but Westerners should still be ready to do so.) Both bows and handshakes occur at every meeting, regardless of the formality of the situation or environment.
Business Card Presentation
Handle with care: The importance of an individual’s business card is great given the culture’s emphasis on rank and status. When presenting your card, it’s customary to offer it with both hands, though one is occasionally used. If so, be sure to place the opposite hand under the elbow similar to the handshake gesture above. Receiving the card is a two-handed affair. The recipient must also take time to read and appreciate the card, without spending so long as to telegraph false interest. Writing on the card or immediately stuffing it into your pocket is a sign of disrespect.
All in the timing: Westerners might be inclined to try to keep meetings short and sweet, but South Koreans see initial get-togethers as an opportunity to build relationships and establish respect. That means that meetings can last for hours at a time. Showing signs of impatience or irritation is out. Punctuality is also a sign of respect, so if you’re running late, it’s imperative to call ahead.
With all due respect: As part of the Confucian system, the concept of “Inhwa,” or harmony between those of different ranks, filters into the behavior of management. Through actions such as avoiding eye contact between junior and senior level workers, one acknowledges the respect and high emphasis on rank and hierarchy that infuses society in general. The same etiquette goes for any contact outside the company setting.
Thanks for everything: Saying goodbye includes a formal presentation of a gift as a signal of appreciation following the business deal. The gift should be meaningful to the most senior level manager on the South Korean team. Gifts are opened in private. Caveat: Given the increasing attention paid to the perception of graft with multi-national business deals, the value of the gift should not be excessive. Westerners should check with their legal and/or compliance teams to ensure that gifts are appropriate and within their organization’s guidelines.