What is a chaebol in Korea?
A chaebol in Korea is actually in reference to a conglomerate that is usually associated with affiliated companies. These companies are usually family-owned businesses and are often under a structure of management that focuses on centralization. The influence of these conglomerates in the Korean economy and stability is superb. In fact, the way that they are engaged and involved in a varied and wide range of industries becomes significant and they become too influential, thus powerful.
Below are the characteristics of these conglomerates:
- Control and ownership
- Business is diversified
- Management
- Influence
Control and Ownership
Typically, the power, management and organization of these conglomerates are owned and controlled by family members. These businesses are actually passed on from one generation to another. It is apparent that these family businesses do not engage and involve in other businesses with other people other than their family members. This is so noted to expand their businesses within their lineage and to ensure no competition would grow into the family. The founding family are those that usually fit the executive and management positions in these companies.
Business is Diversified
These businesses encompass several and diversified businesses in Korea. There would be a mother corporation and the branches of this corporation engage in different kinds of businesses. As they say, “do not put your eggs in one basket”, this is exactly what these conglomerates believe in. the mother corporation may be involved in real estate while the branches could be affiliated in a totally different thing.
The branches may be involved in retail, cosmetics, sportswear, wholesale and others. This is exactly the point of their goal, to be diversified and be active in all areas of businesses in Korea as a family.
Management
The management of these conglomerates cannot be done severally. It is essential that there is one management system where key and important decisions are made. The top leadership that is led by the founding family would have the opportunity to be the centralized management board and most of the Gos and the Nos come from them.
These businesses do not technically monopolize Korea however, the main goal is to be able to embrace and cover all kinds of businesses in the country. This way, it is more advantageous to them as they are participants in all areas and nature that they could make money in.