Dong-A Business Review

HQ in Korea? Korea as a test market? Think outside the box in a time of uncertainty

著者：Wooseok Shin

First published on 3月 30, 2017
min read


In the late 1990’s when Korea was recovering from the Asian financial crisis, “overcoming the crisis” and “emergency mode management” were the phrases commonly used when a head of a large Korean company addressed the employees for the new year. Since then, we seem to have grown accustomed to the words “crisis” and “emergency”. These days, many large corporate employees complain the management always says the company is facing the biggest crisis ever, which makes them doubt if the company is really in trouble. However, the company may be truly in trouble this time. Uncertainties are dominant and deepening across the overall political and economic arenas both at home and abroad now. No matter how big the risk is, if one can understand its scale and nature, it can be controlled at a certain level. Yet, nothing is certain about uncertainties, which is why it is called the king of risks. This is the harsh reality we are facing today. The rule No. 1 to improve the chances of survival under these extreme conditions is “making sure to take a prudential and proven step”. In the same vein, refraining from a major investment project with a relatively low chance of success such as M&A, global market expansion is a step in the right direction. It is a way to save time and effort from a potential failure. Still, can it be a fundamental solution to just stay within Korea which has entered a phase of prolonged slow growth with extremely limited growth potential? We do not believe it can. Then, what should Korean companies do in this global management dilemma where expanding overseas is very risky but staying put is not a solution, either? This article introduces you with strategic contrarian plays for global management that can be adopted to ride the current uncertainties. (Full article only available in Korean) Subscription required

In the late 1990’s when Korea was recovering from the Asian financial crisis, “overcoming the crisis” and “emergency mode management” were the phrases commonly used when a head of a large Korean company addressed the employees for the new year. Since then, we seem to have grown accustomed to the words “crisis” and “emergency”. These days, many large corporate employees complain the management always says the company is facing the biggest crisis ever, which makes them doubt if the company is really in trouble.

However, the company may be truly in trouble this time. Uncertainties are dominant and deepening across the overall political and economic arenas both at home and abroad now. No matter how big the risk is, if one can understand its scale and nature, it can be controlled at a certain level. Yet, nothing is certain about uncertainties, which is why it is called the king of risks. This is the harsh reality we are facing today.

The rule No. 1 to improve the chances of survival under these extreme conditions is “making sure to take a prudential and proven step”. In the same vein, refraining from a major investment project with a relatively low chance of success such as M&A, global market expansion is a step in the right direction. It is a way to save time and effort from a potential failure.

Still, can it be a fundamental solution to just stay within Korea which has entered a phase of prolonged slow growth with extremely limited growth potential? We do not believe it can. Then, what should Korean companies do in this global management dilemma where expanding overseas is very risky but staying put is not a solution, either? This article introduces you with strategic contrarian plays for global management that can be adopted to ride the current uncertainties.

(Full article only available in Korean)

Subscription required