What efforts have governments in Korea made to reform the chaebol since the mid 1990s - Essay Example

Over the past two decades its annual growth rate in terms of gross national product (GNP) has been 9% and exports have increased 30%--the highest increase and growth rate in the world for that time span. By achieving $70 billion annually in exports, with a surplus in ordinary balance of more than $9 billion a year, Korea is now among the worlds top ten exporters. Today, Koreas per-capita income has reached $5,000--up from a meager $82 in 1961 (Chan Sup Chang, 1988). It is clear that strong leadership, sound economic planning by the government and the prodigious productivity of Koreas workers are important elements in this remarkable economic boom.

As one Japanese executive said, "The Koreans are the only people who still work hard." Skilled and diligent workers have been an especially important driving force behind economic success (Ihlwan, 1998). According to the International Labour Organization, the Korean work week averages 54.4 hours--the highest in the world. However, the real catalysts in Koreas economic success have been the efforts of the private business sector, especially those of the chaebols (Korean conglomerates or financial cliques).

The Bank of Korea reports that the total earnings of Koreas top 30 chaebols will reach $200 billion--about 95% of the nations GNP--in the 1990s. Clearly, the state of the Korean economy reflects the success of the chaebols; as a result, these groups have piqued international interest. In this article we shall examine the corporate values and strategies unique to chaebols. Korean chaebols--e.g., Hyundai, Samsung, and Lucky-Goldstar--emerged as major corporations during the late 1950s. The formation and growth of such conglomerates accelerated between the early 1960s (e.g., Hanjin, Korea Explosive, Hyosung, Ssangyong, and Dong-A) and the early 1970s (e.g., Daewoo, Sunkyong, Lotte, Kolon, and Doosan).

Korean chaebols are often compared to