The Informal Organization of Korean Companies: Implications for Korean MNCs

Abstract

Many Korean multinational corporations (MNCs) try to adapt locally by introducing hybrid international human resource management (IHRM); however, in‐depth case studies indicate a gap between espoused and actual IHRM. To resolve this challenge, and taking into account country‐of‐origin effects and institutional practices, we argue that Korean MNCs must become aware of the embeddedness of informal processes in Korean organizations. These informal organization processes complement paternalistic leadership and hierarchical communication, and without them the formal management systems of Korean MNCs are left with authoritarian centralized decision‐making processes where local employees may not feel able to participate. © 2014 Wiley Periodicals, Inc.

A complementary perspective on business ethics in South Korea: Civil religion, common misconceptions, and overlooked social structures

“…Civil religion can be regarded an informal institution, and informality is very noticeable in interpersonal transactions in Korea. As recent research suggests, interpersonal transactions in business are largely informal in Korea (Horak, ; Horak & Klein, ; Yang, ). The question of fundamental ethical principles guiding decision‐making behavior in business thus becomes a fortiori of interest, as formal institutions can hardly be said to regulate informal interpersonal transactions.…”

Positive effects of laissez-faire leadership: conceptual exploration

“…However on the contrary, laissez-faire could be effective in Asian countries, resulting from the existing high power distance in which involvements become more than simple guidance and a substitute of leadership with high collectivism (Yang, 2006(Yang, , 2014b(Yang, , 2015. This meaning that non-involvement of laissez-faire leadership in such cases may be perceived as an act of respect or deference to subordinates where at the same time, members of a cohesive team could collectively act as substitutes for leadership (cf.…”

Leader humor effectiveness—The divergent dynamics of leader humor over time in East Asia and North America

“…These tendencies are somewhat different in the Anglo‐Saxon context, where the effects of leaders' humor decline over time. Contrary to situations in East Asia where formal and informal domains are more likely to intertwine (C. Li et al, 2015; Ling & Powell, 2001; I. Yang, 2006, 2014b, 2015, 2016), the work sphere (the formal domain) and the private sphere (the informal domain) are not expected to mix, and an overlap is usually avoided in Anglo‐Saxon contexts with a high IND culture. Accordingly, although leader humor contributes to affect‐based LMX, which is most helpful in building a relationship, members in a mature relationship would appreciate a more task‐based LMX in a high IND culture.…”

“…In addition, the reduction of hierarchical distance through the leader's use of humor is not desirable or practical, bearing in mind the leader's need to maintain face in a high PD culture. Those who are at the top of the hierarchy are expected to take charge, be in control, and give orders (Robert et al, 2000), and it is a virtue for members to show respect to their leaders (I. Yang, 2006, 2014b, 2016). Disclosing behavior does not always lead to being liked, particularly when the disclosure violates normative expectations (Chiu & Staples, 2013).…”

“…In the early stage of a relationship, interactions are strongly influenced by the prevailing cultural norms, as no shared norms at dyad or team level have yet been developed. Without any attributions or impressions, initial expectations and (dis)confirmations in early relationships, based on leader prototypes, offer clear distinctions that are also influenced by culture (Lord, Foti, & Phillips, 1982; I. Yang, 2014b).…”