Korea Business Success eZine – Spring 2006

Welcome to the Spring 2006 issue of the Korea Business Success eZine of Korean Consulting & Translation Service, Inc. We hope you find this information helpful to your business in Korea and with Koreans everywhere.

Table of Contents

1. Correction to Previous Edition of E-Zine
   
2. Korea-US Free Trade Agreement
3. Feature Article: Important Korean Manners and Courtesies
   
4. Korea-Related Terminology
   
5. Korea's Financial Regulator Gains International Recognition
   
6. Gwanju to be Designated Korea's First "Linux City"
   
7. Balanced Development Plan
   
8. South Korean President Participates in an Online Forum

1. Correction to Previous Edition of E-Zine

The article in the Winter 2006 issue profiling the Hyundai Group contained a factual error. I mentioned that Hyundai Motors has fallen out of the grasp of the family which started it. As pointed out by my colleague, Don Southeron (President of Bridging Culture, a consulting firm to companies operating in America and Korea -- http://www.bridgingculture.com), Chung Mong-Koo has never lost control of the company and is its principle stockholder. Don should know... Hyundai Motors America is one of his clients!

We apologize for the error.

2. Korea-US Free Trade Agreement

The proposed Korea-US Free Trade Agreement is big news in South Korea at the moment.

Dates for formal negotiations between the US and Korea have been agreed on. The first round will be held in Washington D.C. for five days starting June 5 and the second round will be held in Seoul in July. The first two meetings will be followed by three more rounds held monthly starting in September.

Korea has successfully negotiated FTAs with Chile and with Singapore and is currently in negotiations with ASEAN, Canada and India.

A joint study on a FTA between Korea and China will be released at the end of this year. However, in my opinion, the chances of Korea finalizing a FTA with China in the short to medium term are remote because of the particularly complicated tradeoffs that will have to be negotiated first.

Korea and Japan commenced free trade negotiations in 1998 but progress has been stalled for some time due to Japan's reluctance to open its agricultural market as much as it had initially indicated it would.

After a recent visit by an ASEAN delegation to the Gaeseong Industrial Complex (GIC) in North Korea, the chairman of GIC stated that products made in GIC will have the same status under an ASEAN-South Korea FTA as those made in South Korea.

3. Feature Article - Important Korean Manners and Courtesies

This article describes several points of business etiquette that you should do when dealing with Koreans inside and outside Korea to create a good impression and avoid doing otherwise.

1. When a person more senior in terms of rank, status or age having some relationship with you or the people in your group enters the room, you should immediately stand up and gently bow with your head. A deeper bow shows more respect but it is generally not required these days. Wait for the person whom you stood up for to sit down before you sit down. If the person is coming and going then it would only be necessary to stand up the first time they enter the room, not each and every time; but follow the lead of the Koreans in the room. Age alone does not determine whether or not one should stand up for a person; people would not stand up for an elderly cleaner or maintenance person but would stand up for an elderly relative of a colleague, for example. The best guide is to observe the other people in the group and follow their example. Don’t be the first to stand up but be watching other people and do what they do.

2. If you are in a group and want to smoke then you really should ask the most senior person whether they mind before lighting up, unless you are clearly the most senior person in the group. If your request is rejected then you should refrain from smoking until you leave. If you are a smoker and people in the group start to smoke then offer people of similar seniority one of your cigarettes. Whether they use one of your cigarettes or one of their own, offer to light it for them (with the cigarette in their mouth) using your lighter. The most senior person from your party should offer the most senior person in the other party a cigarette and light his cigarette first to avoid causing him any offense due to him being left out. Traditionally, Koreans looked down on women smoking and it is still very uncommon to see in a business environment. Women may want to keep this in mind during business meetings and social gatherings. Even if offered a cigarette in such circumstances, the most culturally expected option for women would be to decline the cigarette and not smoke.

3. In the West, we traditionally follow the principle of ladies first. But in Korea, the principle is seniors first and the practice is still widespread. Seniority is determined based on rank, age and status, and doesn’t just refer to senior citizens. People need to respect the seniority of people in your party as well as the other party. Disrespect of a junior member towards a senior person in their own or the other party reflects very badly on the senior person, not just the junior person, because it is a sign that the senior person is unable to properly control those whom he has authority over and a duty towards. Junior members of the party need to behave very humbly and respectfully to the seniors within their own party and the other party and never publicly ridicule, challenge or contradict them.

  Open doors for and allow people more senior than you to enter a room first.
  Wait for all people more senior than you to sit down at the table before taking your seat.
  Wait for all people more senior than you to start eating or drinking before starting.
  Sit near people with a similar level of seniority and try to mix with such people from the other party.
  The most senior person in your party should offer the position at the head of the table to the most senior person in the other party.

4. It is polite to "fight" over who pays for meals or drinks. By fight, I mean you should try to prevent, in a light-hearted way though verbal persuasion and gentle physical means, the other person paying and you should offer to pay. Doing nothing and just allowing the other person to pay or giving up too easily could cause offense. It is important to be seen to make at least some effort. Generally, the party who did the inviting should pay, but perhaps you could offer to pick up the tab at the second venue if the group is moving on to another location, or offer to pay next time you meet. Splitting the bill is not done in a business situation, so it is advisable not to request it or offer to do it. In the case of a group of Koreans and a group of non-Koreans, the Koreans normally expect to pay nearly all of the time when hosting a group in Korea (especially if the non-Koreans are buyers) and the same would be true if you were hosting a group of Koreans in your country.

5. Pouring another drink when a person of similar seniority’s glass is empty or near empty is good manners. Allow the other person to do the same for you. The ideal situation is that people of similar seniority sit together around the table and no-one should ever have to pour his or her own drink. Remember to use two hands. One hand should be holding the bottle and the other hand should be holding the bottle or your wrist.

6. Anything involving a person of greater or similar seniority, an object and your hands requires you to use both your hands. This includes pouring a drink, lighting a cigarette, and giving a gift or some other object. Both of your hands can be on the object or one hand can be on the object and the other gently grasping your wrist. The same applies for shaking hands - use both hands.

7. If Koreans visit you then it is important to escort them out when they leave. How far you escort them depends on what mode of transport they are taking, the degree of respect you are expected to or wish to show, and whether or not they require assistance in finding the way. In order of increasing respect, you can:

  Escort them to your front door
  Escort them to the elevator
  Escort them to the door of the building
  Escort them to the boundary of the property if they are walking from there or to their car if their car is parked nearby
  Escort them to the place where they will catch public transport if they are traveling by public transport

You can leave as soon as you have escorted them, but it is much more polite to wait with them until their form of transport, elevator, bus, taxi, etc., arrives and they have departed. If they are traveling by subway or train then it is not necessary to go into the station with them unless they are uncertain about how to catch the subway or train. You could walk with them to the entrance to the station but it would be more polite to walk with them right up to the barrier. I would recommend showing the highest level of respect by having one or more people escorting the other person or party as far as practicably possible. Be sure to match the seniority of the people doing the escorting with that of the most senior person in the party being escorted to avoid causing any offense.

4. Korea-Related Terminology

In past issues of the e-zine, I have introduced some terminology used by Koreans when using English that will generally not be understood by native speakers of English. In this article, I will continue with that theme but focus on spoken English used by Koreans that you are likely to encounter.

By the way, if you ever have a simple question or request for information related to Korea then you should use our website set up to handle such inquiries - http://www.askakorean.com

"Promise" - Koreans sometimes say that they have a promise with someone. By this they mean they have an appointment or arrangement to meet someone.

"Dutch-pay" - going Dutch or splitting the bill

"Hand phone" - cell phone or mobile phone

"Interphone" - intercom

"Name card" - business card

"Office-tel" - Type of building with many smallish rooms to rent or purchase that can be used for either a small office or accommodation. The word is a combination of the two English words - office and hotel.

"VTR" - VCR

"Y shirt" - dress shirt or business shirt

"Service" - good or service provided free of charge by a business.

"Booking" - Introduction with a member of the opposite sex to sit and talk arranged by an employee of a night club.

"Cider" - 7-Up or Sprite-like fizzy drink

"Manicure" - nail polish

"Talent" - TV entertainer

"Ball pen" - ball point pen

"Sharp" - mechanical pencil

"Sen-chee" - centimeter

"Magic" - felt tipped pen

"Night" - night club

5. Korea's Financial Regulator Gains International Recognition

Yoon Jeung-hyun, governor of the Financial Supervisory Service (FSS), South Korea's financial regulator, was presented with the The Asian Banker Achievement Award 2005 for Financial Supervision during the Asian Banker Summit in Bangkok on March 15th this year.

The Asian Banker, a Singapore-based financial magazine, honored Yoon for his deregulation drive to improve the profitability and soundness of Korean banks.

6. Gwanju to be Designated Korea's First "Linux City"

In an attempt to decrease reliance on the Microsoft operating system, the Korean government is trying to promote the use of the open-source Linux operating system in Korea.

To this end, it invited cities to bid for funding to assist a migration from the Microsoft operating system to the Linux operating system and for a university to bid to receive ongoing funding for R&D of the Linux operating system and Linux software applications.

Gwangju was the sole bidder to meet the March 10 deadline and is thus likely to be successful in its bid. Daejon expressed great interest but failed to submit a bid by the deadline.

Being designated a Linux City will require that Linux be installed as the main operating system of all municipal computer systems. In return, the city will receive funding and technical assistance from the Ministry of Information and Communication.

It is hoped that the successful migration to Linux by the designated Linux City will prompt other Korean cities and regions to follow suit in the future.

The Ministry plans to invest 1 billion won ($1 million), but that amount could change.

Several Korean universities have applied for funding as "Linux Universities" and the successful bidder will be announced in March or April this year.

7. Balanced Development Plan

A total of 15.6 trillion won (US$15.6 billion) will be injected into projects aimed at balanced national development in 2006, the second year of the first "five-year plan for balanced national development".

The phrase "balanced national development" refers to the fact that for political and historical reasons, it was the capital and south-east of the country that received most of the development spending and that the present government is attempting to correct this imbalance.

Under the plan, different regions within the nation have been allocated different roles or functions, as shown in the following table and development funding will be directed and planning conducted in accordance with these roles and functions.

8. South Korean President Participates in an Online Forum

Proving his computer literacy and Internet savvy, on March 23rd this year President Roh Moon-Hyun participated in an hour-long Internet forum on a variety of issues of concern to the nation.

The forum consisted of the president and a five-member panel chosen from Internet users.

The forum was titled "Let's Solve Social Disparity Together" and intended to allow dialogue on measures to address increasing disparity in education, employment and housing.

The forum also addressed other issues, such as the proposed free trade agreement between South Korea and the United States and its impact on the domestic film industry.

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