Chaebol Challenge Family – controlled conglomerates that symbolize Korea Inc. Chaebol meaning (“Family Wealth”) Challenges Korea Faces with the Chaebol System 1. Korea’s dependence on the chaebol system - Represents wrong model for Korea’s economic transformation 2. Korea needs open, flexible companies

Chaebol Challenge Family – controlled conglomerates that symbolize Korea Inc. Chaebol meaning (“Family Wealth”) Challenges Korea Faces with the Chaebol System 1. Korea’s dependence on the chaebol system - Represents wrong model for Korea’s economic transformation 2. Korea needs open, flexible companies

Chaebol Power From government to Chaebol ‘The Power Shift’ After President Park was assassinated in 1979, the balance of power shifted towards the Chaebol. The Chaebol became less dependent on government support-Expansion overseas - Exports quadrupled from $17.5 billion in 1980 to $60.7 billion by 1988.

Reasons Why the Chaebol are the Wrong Model for Korea Inc. Korea’s economy needs to transform itself away from manufacturing, towards value-added services Korea needs companies that are more flexible. Away from family owned businesses-toward professionally run, global transparent organizations

3 Reasons Why the Chaebol Are the Wrong Model for Korea Inc. Hierarchic system in the Chaebol bureaucracy restrict innovative thinking and creativity Manufacturing businesses are shifting towards China, Korea needs to become a globally competitive by expanding towards globally competitive service businesses Korea’s Chaebols do not know how to create partnerships. They seek control and domination

Growing Up Among Giants – A New Generation of Companies? Korea needs to grow out of its dependency upon the chaebol A successful economy needs a vibrant mix of companies which provide opportunities and choice: -for entrepreneurs to develop their new technologies and business ideas - for companies to find opportunities for developing new products, services or technologies - for investors to diversify their holdings into a variety of companies - for managers and graduates to seek a variety of opportunities throughout their careers.

Media Workers Protest http://www.youtube.com/watch?v=GjiHT2R7JjA http://www.youtube.com/watch?v=7KlmSv8sRrI http://www.youtube.com/watch?v=GiY4_PnG6qQ Large conglomerates (chaebols) are also keenly interested in the passage of the bill, which is expected to give rise to sweeping shake-up of the telecommunications and media industry. The most crucial issue is about allowing or restricting the simultaneous ownership of newspapers and broadcasting companies. In particular, the bill stipulates that chaebols and newspapers will be allowed to own up to a 20.0 percent share in terrestrial broadcasters, while newspapers and other firms can possess a maximum 49 percent stake in general and news-only cable TV stations. If the proposed change intended to nurture world-class integrated service providers is realized, chaebols will be the main beneficiaries. However, critics argue that the change will ultimately pave the way for chaebols' monopoly of the media industry.

Terminology Quiz 1. Balance of power: Where one nation seeks to maintain an approximate equilibrium of power among many rivals. 2. Foreign direct investment is defined as a company from one country making a physical investment into building a factory in another country. 3. Labor unions is an organization of workers who have banded together to achieve common goals in key areas, such as working conditions.

Terminology Quiz 4. Capital refers to labor, machinery or land used to create Goods (clothing, cars etc.) or services. 5. Hierarchy a ruling body (one individual or more) organized into orders or ranks each subordinate (placed in or occupying a lower class, rank, or position to the one above it.