The New Koreans by Michael Breen

Author:Michael Breen
Language: eng
Format: epub
Publisher: St. Martin's Press

17

THE CHAEBOL PROBLEM

“My mother always told my brothers to tip waitresses well. ‘That’s where the rumors start about your character,’ she’d say.”

The chaebol have always been a visible and convenient target for the broader complaints of Koreans about the corruption, unfairness, and powerlessness they experience. Mindful of this, the politicians, an even bigger target, routinely seek to deflect potential criticism by addressing the “chaebol problem.”

Governments have been declaring since the 1980s their intention to rein in the conglomerates, yet they haven’t, or couldn’t. (“Economic democratization,” code for chaebol-curbing, was a key issue in the 2012 presidential election.)

In essence, the chaebol problem refers in business to the inequalities and bullying that occurs everywhere else in a society that, for all its straining to be different, cannot stop viewing people hierarchically and therefore as fair game for abuse. Thus a large company in Korea means something different from a large company in an egalitarian place like, say, Australia. Status allows for different rules. That was why the business community in 2013 saw the four-year sentence given to Chey Tae-won, the chairman of the SK Group, for embezzling company money for his own investments, as harsh. Unfortunately for Chey, the court was influenced at the time by public disgust at the easy fines, suspended sentences, and presidential pardons that chaebol chiefs normally enjoy because of their jobs as vicars in the church of the national economy.179

Getting into a chaebol is not easy, and requires a rigorous application process that used to rely totally on credentials but which is now becoming more creative. But still, as the instinct is to hire and instill loyalty and to worry later about competence, a noticeable feature of the chaebol is the difficulty they have in recognizing and rewarding talent. It is not always the high performers who rise to the top.

“I was quite astonished [by what] seemed to be a policy of promoting young people … who were notable for their mediocrity,” said one American research fellow who spent several years with one of the conglomerates. “I figured it was connected to the growing authority of the chairman’s son. The people around him [in senior positions] had to be young but not too brilliant.”

This type of environment in which capability is subordinated to political skill—not of course unique to Korea—helps explain why Koreans prefer the more predictable practice of subordinating capability to age. In other words, promotion by seniority alone, which is the default preference in Korean companies and even among Korean staff in many foreign companies.

At the dizzying heights of chaebol chairmanship we find an atmosphere of power the ordinary Westerner would find peculiar. Not so much because of the power-wielding—many Western companies have an authoritarian culture and their people are nervous around bosses—but more because of the rituals that signal such power. In some companies, for example, even the top executives stand to attention when the chairman walks in.

I used to have an office on the same floor as the top executives of the Dainong Group.

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