AM Lecture 5

Management > Asian Management > Chaebol > Lee's management challenges > Lee explained > Corporate behaviour > Effects of law reforms > Reality

Reality

Oh and Park (2002) studied the organisational dynamics of the chaebol, observing that despite the law change and corporate failures, chaebols refused to change. This is because they are institutionally predisposed to diversification as a way of reducing technological uncertainties.

The government's "Big Deal" of 1998 was largely resisted, as chaebols were suffering from organisational isomorphism, where they were trying to preserve their centralised decision-making processes and diversification (not their technological cutting edge).

The 1990s globalisation drive and the 1997 crisis had a big impact on labour relations:

Pre 1997, globalisation required labour mobility reforms as conditions of joining he OECD. In this time labour market flexibility was needed to assist economic competitiveness and the arrival of foreign workers caused tension.
Post 1997, the IMF/World Bank intervention required business restructuring, which caused much unemployment, creating the need for a "Social Net", which was absent in Korea