If there’s one complaint Devinder Ahuja has about South Korea’s regulatory framework, it’s that the country’s labor laws make it nearly impossible to fire employees — or even discipline them for nonperformance.
But in the Novelis senior vice president’s experience, investing in understanding Korean culture goes a long way toward ensuring you never have to.
Koreans, Mr. Ahuja said, have an unrivaled industriousness and ingenuity. They’re educated, committed and loyal. But they’re also hierarchical, and it can be a long road (especially for foreigners) to cultivate trust.
“The value of investing time in relationships has to be underscored in Korea,” he said during a luncheon discussion hosted by the World Affairs Council of Atlanta to celebrate impending opening of a Korea Trade-Investment Promotion Agency (KOTRA) office.
Novelis, the aluminum giant which sponsored the event, has its Asia regional headquarters in Seoul and two factories in Korea. Overall, 1,100 people work for Novelis in the country. Mr. Ahuja spent three years living in Seoul as an expatriate with another company and now travels back frequently.
Negotiating in Korea isn’t always easy, but respect for your hosts is paramount, he said. During one tense union negotiation, he resorted to reading a planned speech in Korean. The gesture helped break the logjam. Mr. Ahuja hails from India originally.
“They say a lot with silence in Korea. We in this part of the world tend to be explicit. We say no, but in Korean you have to listen to the silence,” he said. “Be patient, take the time, allow for the pauses, give extended periods to go back, think through and come back.”
Craig Lesser, the former commissioner of the Georgia Department of Economic Development who helped reel in the Kia Motors plant for the state, said negotiating an incentives package was sometimes stressful. In a room full of people, he said, it was key to know who was going to be the one speaking for the group. The rest were the subject-matter experts who would finesse the results of the day’s discussions during the evening.
But once a deal with Kia Motors America Chairman Byung-mo Ahn was reached on the back of a receipt, Mr. Lesser says, it was unassailable, even when Mississippi came calling with an even larger package.
Mr. Ahn stuck with Georgia, explaining it in somewhat of a parable: “‘My friend, I’m about to get married; how can I pursue another woman?” Mr. Lesser recalls him saying.
“The loyalty factor with our Korean friends is extraordinary and can be banked on for years and years and years,” Mr. Lesser said while moderating the World Affairs discussion.
Tom Croteau, Georgia Department of Economic Development’s deputy commissioner for global commerce, said there have been times when the state thought it had landed a Korean prospect, only to find they’d misunderstood a nuance of communication.
That’s why it’s so vital that the state has had an office in Seoul for going on 30 years. It’s run by Peter Underwood, a veteran consultant with strong family ties to the country, and Yoonie Kim, the project manager where in Atlanta who ensures things don’t get lost in translation. Korea has become one of the state’s key investors as a parade of auto suppliers has arrived. Having both a KOTRA office and a consulate here helps sell Atlanta, he said.
For United Parcel Service Inc., which employs about a thousand people in the country, mitigating cultural hiccups is a matter of partnerships, both with employees and vendors.
“We want Koreans running Korea for UPS,” said Jeff McCorstin, president of global customs brokerage. “The cultural differences aren’t cultural differences for them.”
With 30 years of history, UPS has 17 distribution centers in Korea and flies 67 flights a week into Seoul. Soon it will triple the size of its hub at Incheon Airport and add 10,000 square feet of warehouse space. None of that would possible with too much employee turnover or hiccups in external relationships, Mr. McCorstin said.
“Our last country manager was a day-one employee, so they stay with you,” he said.
UPS relies on “people, partnerships and problem-solving” to adapt in Korea, which is becoming a more important gateway to Asia, especially as more manufacturing moves to places like Vietnam.
But the Southeast U.S. is also fast becoming a gateway for Korean companies, said Consul General Young-jun Kim in opening remarks.
“Korean investment in this region is new, beginning just 10 years ago. But the volume and the speed of Korea investment is so fast and widespread. I have heard about new Korean investment in this region almost every month,” he said, adding that cumulative investment totals some $52 billion.
The new KOTRA office will add another dimension of partnership to a relationship that has stayed strong despite the contentious renegotiation of the KORUS free trade agreement and the imposition of quotas on Korean steel imports under the Trump administration.
Soo-deuk Sohn, president of KOTRA’s North America office in New York, said the Atlanta office would open in December in Buckhead with six staffers. It will focus on automobiles, IT and consumer products (particularly cosmetics), among other industry sectors. KOTRA can also help American firms of all sizes looking to use Korea as an Asian gateway. Joint ventures are among the organization’s priorities.
“We want United States companies to come to Korea, not just for selling, but to cooperate,” Mr. Sohn said.
Asked what he thought about the panelists’ assessment of cultural adaptation in Korea, he didn’t hesitate:
“Good — they are experts.”