Decision-making and Approvals: Korean Business Culture Insights

This week, I am sharing two of my Korea-facing business perspectives—decision-making and approvals.

In most Korean companies leadership decides on direction and major issues. In turn, the working and local team’s role is to gather and prepare needed information.

Then, if approved they will report back to HQ on implementation and progress.

?In cases where overseas leadership and teams hope to offer an idea, new service, or program, local Korean management's role is often to gather information and then share it with the appropriate senior team members, who are often in Korea. The local opinion is valued, but review and final approval may come from Korea.

My suggestion...

When you are conducting a meeting where a decision must be made, please know that your local Korean team(s) will have a great say in the outcome. This may include both the operations and finance teams.

First, since the topic and subject matter may be new to your Korean team, I recommend you share before the meeting any needed background documents (best provided in PPT format).

In addition, have an informal pre-meeting Q&A with the Korean team leader to brief and update them on any specifics. Note: they may need a day to review proposals and agreements, so timing is critical.?

Even in the best cases, expect that the Korean team may want to postpone any decision until they can carefully review and perhaps confer with Korea. I suggest all documents and meeting PPTs be immediately forwarded to the Korean team. I'd create a sense of urgency with a timeline for execution and implementation.

Regardless, expect some delays and be patient. Over the years, I've found that Korean teams appreciate when their overseas co-workers recognize that the internal approval process takes time and be ready to offer as-needed supportive data or documents.

The Approval

Within hierarchical business structures approvals usually require several people to "sign off" on a program before commencing the project. For those who are used to leaner organizations, the process can be seen as time-consuming and lead to frustration and delays.

First, once the go-ahead agreement to move forward on a project is reached within the local organization's team, the Korean team, too, often has its internal procedures that usually include both Operations and Finance approvals.?

Depending on the size of the local organization and whether the project needs review by the Korea HQ, I've experienced projects requiring several "approvals" leading to a "final" approval.?

?For example, once the Korean team agrees to a project, it may mean their team has signed off, but the project must still go to senior management for their okay.

Once senior management has approved, it may then go to a COO or CEO for a "final" review.

Korean teams can be rather vague in sharing the number of approvals in part because the approval chain may change with each project.

In other words, the Korean teams are aware there are several approvals, but depending on the nature of the project and the costs involved higher levels of approval might be required.

I recall a Korean team leader on one project rather humorously reporting approvals several times over a week and then upon receiving a final approval at the end of the week remarking that it was really the “final” approval.?

In some cases, I've seen companies with several C-levels sign off, but the project still waits several more days for a senior CEO or their Board to approve.

In the best instance, these senior approvals go smoothly when senior leadership trusts the judgment and needs of the local organization's team.

However, in other situations, leadership may request additional specifics on the project. More concerning, I’ve witnessed senior leadership ask for modification, dramatically affecting the agreement's previously negotiated terms and conditions.?

One example of CEO intervention that is not uncommon comes to mind. Several years ago, I was organizing and facilitating a 10-day Global Manager Leadership workshop in Korea for one of the Hyundai Motor Group's top divisions.

Participants from the U.S., Europe, the Middle East, India, and Asia-Pacific would be attending. Plans were set, dates confirmed, and approvals were obtained up to, but not including, the CEO, an approval thought to be just a formality.?

To the surprise of some, the CEO asked the Korean team several pointed questions. Uncomfortable with the level of response and sensing the team was rather inexperienced at organizing a global event, he asked the workshop to be postponed with the team re-grouping and coming back in a few days with some data/metrics centered on outcomes from past events and specifically their impact on long term employee loyalty.?

Take away

Be aware that projects might be ‘approved,’ and you will be expected to move forward but there may be the ‘Final Approval’?before a true engagement. In the best cases, I have witnessed a quick sign-off?by a CEO.? In the worst case, they will either want things restructured or postponed.?

Are you developing a high-priority project or business proposal?

I can provide perspective to ensure success. Let’s talk.

Call or Text 310-866-3777? EM [email protected]