This means before any transaction, one needs to be introduced by a third party. Unlike in the US where legal documents are just that, Koreans take them to be memorandums of understanding. The culture views, contracts as consensus statements loosely constructed with agreement definitions that are broad, providing room for adjustments whenever necessary. Criticism is not to be offered in public which means that termination of contracts is to be done with discretion (De, 2012). This includes firing an employee.
The Korean culture allowed for the formation Chaebol which is directly translated into the English word conglomerate. The policies allow the Chaebol to run the economy. These export oriented firms crowd small firms out of the people and skills in the market. In the country, the scale of pay raises with increasing years of service. This has seen older workers being fired in order to squeeze the wage bill. This practice would be illegal in the United States as this is wrongful dismissal. The culture of social cohesion resulting from the teachings of Confucius stresses the obligation that people have towards each other (Kwintessential.co.uk, 2014). This has seen the government of South Korea coddle small firms through maintenance of entry barriers as a shelter. The support offered to the SMEs by the government as of 2009 reached 10 trillion (The Economist, 2011). This contrasts sharply with the US where the government is not involved in SMEs.
The two nations have been and still remain great partners with both parties benefiting from the partnership. However the cultural differences between the two nations have seen the countries have different practices in conducting of business and the intervention of the government.
Kwintessential.co.uk,. (2014). South Korea - Language, Culture, Customs and Etiquette | global-etiquette | resources. Retrieved 18 October 2014, from