Doing business in Korea and Taiwan: cultural and marketing hints

Business America, August 24, 1992 by Paul Carroll, Balbina Y. Hwang

If you are an American company or business person considering doing business in Korea or Taiwan, start with the most obvious and basic fact: that you will be dealing with cultures vastly different from your own and that the Western brand of logic will not be applicable to your normal business practices. Some general rules of business etiquette apply to both Korea and Taiwan, but don't make the common assumption that all Asian cultures are alike! Doing your homework on not just the etiquette but also on the cultures of these international markets is an important first step towards ensuring a successful venture. Following is specific background information unique to Korea and Taiwan, as well as some common rules.

Korea

During the 5,000 years of history that have shaped Korean culture, no other system of belief has so profoundly affected the Korean psyche as Confucianism. Westerners are easily mystified by the influence of a secular code of conduct like Confucianism, but should attempt to understand at least the important role that it plays in the modem country of Korea.

The main Confucian virtues--love of humanity, consideration of other's feelings and emotions, treatment of each person according to his social role, respect for others' rights, and sincerity and truthfulness of purpose are all viewed as necessary to interact properly with others and are considered of utmost importance in Korean interpersonal relationships. Thus, an unwritten code of behavior exists in both informal and formal settings. Koreans are excessively hospitable people and will treat visitors with the utmost deference and kindness. As they are hosts by nature, their politeness does not necessarily mean that you have won their trust and loyalty, or that you are a particularly important individual. It only means that you in return are required to be polite in the given manner.

Paradoxically, the Koreans one meets on the streets of Seoul may be rude and abrupt, and far from friendly. Nevertheless, this behavior is actually consistent with Confucian ethics if one keeps in mind that there has never been any code of behavior for outsiders in that system. If one is not tied by some relationship to a Korean, no loyalty or respect is due. Note that Korea has been known for most of its history as the "Hermit Kingdom," successfully repelling "barbarian" attacks and influences until this century. Thus, foreigners and outsiders have traditionally been "non-persons," and socially indefinable; after centuries of Confucian tradition, foreigners do not exactly fall into any specific category of interpersonal relations. However, once a foreigner becomes a business associate, a fellow club member, or a colleague, he or she will be treated in the manner appropriate to one's position. Even among Koreans, a person who is not a part of the family, the club, the group, the company, or the class does not merit special consideration in many daily activities.

It is of utmost importance in Korea to maintain a high kibun (loosely translated as a mood or feeling of a comfortable and peaceful state of mind). It is very difficult for Koreans to admit failure, and devastating for them to lose face. The directness of Westerners in dealing with incompetence, error, or dishonesty is thoroughly unpalatable to Koreans, whose self-esteem is always on the line. As a foreign business person, if you can keep everyone's kibun high, then you will be able to achieve a very satisfactory working relationship.

Taiwan

In Taiwan, if there is one Chinese word an American business person will come to know, it is kuan-hsi. Its most basic English translation is "connections." However, kuan-hsi (pronounced "gwon-she"), like most Chinese words, has a much deeper meaning. As in Korea, in Taiwan traditional Chinese culture stresses the importance of human interaction. The essence of this interaction is kuan-hsi. It goes far beyond the American concept of networking. Kuan-hsi is developed over a long time period. It reaches down into every aspect of Chinese society, influencing social, political, and commercial relations.

Thus, a business person's kuan-hsi building begins with the initial contact. Since the Chinese also place heavy emphasis on personal relationships, it is important for the American business person to realize that the Chinese counterpart will first want to be on a closer personal basis before actually doing business. Therefore, it is mandatory that American firms take the long-term approach. Before actually looking for business deals, Americans should look for a business counterpart in Taiwan.

Marketing in Korea and Taiwan

Importers, agents, distributors. Local representation in the Korean as well as Taiwan markets is crucial for successful penetration, especially if your firm is vying for a contract which is open to international competitive bidding. In marketing your products to Korea, you will have a number of alternatives. These include the establishment of a branch sales office; appointing one of the U.S., Korean, or Japanese trading firms in Korea as your representative; selecting a registered trading firm to act as your agent; or selecting a registered offer agent to represent your product in Korea. In Taiwan, you may also want to consider establishing a relationship with a local agent or distributor. Frequently, foreign suppliers in both countries will appoint several agents to represent the company's different product lines or will pursue a mix of the above alternatives. Distribution methods vary with the product and individual situation and must be tailored to fit particular conditions.