Corporate competitiveness in global markets and the evolution of Korean corporations toward globalization
Korean firms have rapidly grown from domestic firms to multinational corporations through the decades of the 1970s and the 1980s. During the period from the 1970s to the early 1980s, Korean firms pursued an export oriented strategy based upon inexpensive cost of labor. Currently, large business groups are progressing toward global corporation. Through this transition they are facing new trends of business environment such as, competition based upon technological superiority, requirement of advanced marketing skill, R&D investments, increased cost of domestic labor, trade protectionism, localization, and serious global competition. Based upon these reasons, Korean firms are transforming their strategy from export to a global localization strategy. In 1990, more than ten Korean firms were ranked on the list of Fortune global 500 corporations.^ This study set alternative hypotheses that Korean firms have grown from domestic to global corporations through purposeful implementation of global strategies or that they simply become global through the accident of evolution. Surveys and descriptive statements based upon model building were used to test these hypotheses. In order to get statistical data; 1550 questionnaires were sent to corporations in the U.S., Japan, and Korea.^ The analysis of this research indicates that the strategic evolution of Korean firms was achieved through government's industrial strategy as well as corporate strategy. During the 1960s and the 1970s, the Korean government strategically directed private firms through an export driven policy, Five Year Economic Development Plans, establishment of systems of general trading corporations and Chaebols, and through strong political leadership. Since the 1980s, private firms have increased their autonomy and have developed strategies in order to increase corporate volume and to liberalize domestic markets.^ Crucial weaknesses of Korean firms are also discussed: (1) corporate growth based on volume, (2) low levels of technology and R&D, and (3) strategy of competitiveness based upon labor cost. The research analysis recommends desirable future strategies for Korean firms to improve global market competitiveness as follows: (1) specialized or related diversified business, (2) strategy of product differentiation, (3) technology transfer between developed countries and less developed countries, (4) niche strategy for high tech industries, in particular the semiconductor industry, and (5) global localization. ^
Business Administration, General|Business Administration, Marketing|Economics, Commerce-Business
Tae Yun Um,
"Corporate competitiveness in global markets and the evolution of Korean corporations toward globalization"
(January 1, 1992).
ETD Collection for Pace University.