AM Lecture 5

Management > Asian Management > Chaebol > Lee's management challenges > Lee explained > Corporate behaviour

Corporate behaviour

Oh and Park (2002) observed that there are many kinds of market intervention by the state. Specific to the Korean case is the "awesome magnitude" and frequency of state intervention in the market. They include financial regulation, infrastructure-building, initiating and implementing entire economic development plans and industrial targeting through preferential treatment.

The rise of Hyundai is an example of the entry of the chaebol onto the world stage with the close ties between business dynasties and the government.

Kim's (2003) study demonstrates that in the Doosan corporation (1987-1992), the entrepreneur could control the chaebol by owning only a small number of shares.

Taek and Soo (2004) argue that accounting and auditing standards were weak, financial institutions were not a source of outside discipline and there was no threat of hostile takeovers. The government's reaction was to force the chaebols to restructure, including law reforms on commercial code, auditing, monopolies and securities.

Effects of law reforms