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Country starter pack<br />
Business practicalities in <strong>Korea</strong><br />
77<br />
and learn English, and the possibility to transfer to the<br />
company’s home office or another foreign branch office.<br />
Due to the significant differences between Australian and<br />
<strong>Korea</strong>n employment practices, it is best to consult <strong>Korea</strong>n<br />
employment agencies before hiring.<br />
Work permits and visas<br />
Under the <strong>Korea</strong>n Exit and Entry Control Act, a foreigner<br />
who wishes to reside in <strong>Korea</strong> must have a visa which<br />
allows an appropriate period of stay (theoretically not<br />
less than 91 days but normally six months or longer). If a<br />
visa is granted for 90 days or less, it cannot normally be<br />
extended while the foreigner is in <strong>Korea</strong>. The extension<br />
requirements are waived for a foreigner who has<br />
invested at least US$500,000 under the FIPL with the<br />
employment of five or more workers.<br />
Foreigners seeking employment in <strong>Korea</strong> must have a<br />
work visa, and may only work in places designated by the<br />
local or district Immigration Office. If they wish to change<br />
work places, prior permission must be received from the<br />
local Immigration Office. The appropriate visa status is<br />
determined on the basis of the activities to be engaged<br />
in by the foreigner. The first alternative is a Technology<br />
Inducement Contract (TIC), which has been reported<br />
to the relevant ministry under the FIPL. Under this<br />
arrangement, employees of the foreign licensor would<br />
enter <strong>Korea</strong> for work under the TIC. Second, expatriates<br />
may be sent to <strong>Korea</strong> for work at a foreign entity’s branch<br />
office. Third, expatriates may be hired by a <strong>Korea</strong>n<br />
company (foreign invested company or join ventures<br />
under the FIPL). Certain types of visa status appear to<br />
be most suitable for the expatriates who enter <strong>Korea</strong>. A<br />
foreigner holding any of these types of visa status may<br />
stay in <strong>Korea</strong> for a period of up to four years.<br />
Managing a <strong>Korea</strong>n team<br />
Australian businesses should develop and adapt their<br />
management styles to accommodate local preferences<br />
and to be as appropriate for the local context as<br />
possible. Social hierarchy and loss of face are key issues<br />
for Australian managers to be aware of. They should<br />
also encourage social interaction in the workplace.<br />
Management techniques that are confrontational and<br />
assertive – such as public reprimands or criticisms –<br />
should be avoided as they can easily lead to disrespect and<br />
uncooperative work practices, which in turn negatively<br />
impact on employee commitment.<br />
Workplace managers in <strong>Korea</strong> generally expect to be<br />
obeyed – and in almost all circumstances they are. The<br />
strong culture of subordination to superiors is consistent<br />
with Confucian tradition, which stresses qualities like<br />
obedience, loyalty, and hierarchy. Leadership also requires<br />
an appreciation of the <strong>Korea</strong>n concept of inwha, which<br />
stresses harmony between people of equal or similar rank.<br />
A successful manager will foster a working environment<br />
free, or largely free, of open conflict and confrontation.<br />
The hierarchical nature of <strong>Korea</strong>n society means lowerlevel<br />
employees will generally be reluctant to question<br />
authority or even to provide feedback. However, in some<br />
circumstances there can be a consensus-style decisionmaking<br />
process that can give employees a sense of<br />
participation in management. Australians, Americans and<br />
other foreigners in management roles may be pleased to<br />
experience variations on these customs, particularly from<br />
female and younger <strong>Korea</strong>ns who can be enthusiastic<br />
about working for foreigners because they are perceived<br />
to be more liberal in their outlook.<br />
Australians managing <strong>Korea</strong>n employees should be<br />
prepared to make some other cultural adjustments. For<br />
example, they will be expected to take a much closer<br />
interest in the personal lives and welfare of workers than<br />
would be expected back home. Don’t be surprised when<br />
your staff arrive before you and leave after you – they will<br />
do that no matter what time you come and go as a way<br />
of showing their dedication. Finally, as discussed earlier<br />
in this guide, socialising with workers is fundamental in<br />
<strong>Korea</strong>, and it is part of the manager’s role to facilitate and<br />
pick up the tab for much of this activity.<br />
5.6 BANKING IN KOREA<br />
The banking system in <strong>Korea</strong> is as advanced as most<br />
Western countries, but is also relatively simple and<br />
user-friendly. Most of the well-known banks have<br />
service representatives who speak some English, and an<br />
increasing number of banks are offering internet banking<br />
in English or accounts specifically tailored to expat needs.<br />
ATMs of major banks in <strong>Korea</strong> generally have an English<br />
option.<br />
Financial institutions<br />
Financial institutions in <strong>Korea</strong> are classified into the<br />
following broad groups: banks, non-bank financial<br />
institutions, financial investment services companies,<br />
and financial holding companies. According to the<br />
Financial Investment Services and Capital Markets Act<br />
of 2009, there are six types of securities and investment<br />
management service providers: dealers, brokers,<br />
discretionary and non-discretionary investment advisers,<br />
collective investment managers, and trust service<br />
companies. These businesses are collectively referred to<br />
as financial investment services companies.<br />
Banks are classified as either commercial (general banks<br />
handling long and short term finance) or specialised<br />
(these have a specific purpose such as the Export-Import<br />
Bank of <strong>Korea</strong> which provides support for export and<br />
import transactions and overseas investment projects).<br />
Foreign banks are allowed to establish subsidiaries or<br />
branches to engage only in commercial banking. But<br />
foreign banks cannot operate as specialised banks. There<br />
are more than 50 foreign banks operating in <strong>Korea</strong><br />
including 39 branches and 17 representative offices.