Tip on Doing Business in Korea

I thought it might be a good idea to give you a few pointers about doing business in Korea/with Koreans....but, you know me, I'm a little lazy so I took this site's info and commented on it.

Making Contact
Most Koreans have three names: two given names and a surname. You should feel comfortable asking a person how they would like to be addressed.

Asians tend to be more formal initially. When addressing a new acquaintance use formal titles such as "Mr.","Mrs." or "Dr." High educational attainment is respected throughout Asia. Those with Ph'd degrees are usually addressed as Dr. and then their family name. First or given names are considered personal and are rarely used in business. Wait to be invited to use first names and don't be offended if your host doesn't offer to use these more personal names. Most Korean wives retain their maiden names.
Invited to use first names? Never, never, never use a first name unless the person is much younger and subordinate to you and you've known them for a while. Even then, you need to end with the correct 'ending' to the name (ya, ee...) I made this mistake by calling my wife's boss by his first names...bad idea...but many Koreans are generous and know that many of us foreigners don't know the(ir) rules, but never do it again. It's always safe to call Koreans by last name, first name(s), then si/shi as an honorific.

Speak slowly and clearly but not so slow as to be offensive, as your host may not be fluent in English. Most Koreans understand written English better than spoken English. Use written materials and graphics, whenever possible have these materials translated into Korean. This shows respect for the country and the culture and improves comprehension of the points you are trying to make. If your business is technical it is best to hire an interpreter to help you. Keep in mind in using an interpreter that using your own is usually better than one supplied to you by your host.
Yes, yes yes. Always keep the speed down unless you (i) know that they studied many years abroad and can handle it or (ii) want to confuse them and/or (iii) want to lose the deal. Just because a Korean in agreeing DOES NOT mean he agrees nor does it mean he understands any/everything you're saying.

Although Koreans appear quite westernized it is important to remember that they hold Korean values that are different in certain respects. Kibun, which relates to a person’s mood or state of mind, affects all relationships. To hurt someone’s Kibun causes a loss of dignity. Maintaining harmony is more important than absolute truth.
True. Their relatives are all Korean, they eat Korean food, speak Korean almost exclusively, interact with Koreans in the Korean way....just because you're in front of them does not change their psyche.

Koreans will smile in a variety of situations such as when they are happy, sad, nervous or embarrassed. Don't necessarily assume that a smile denotes acceptance. In certain circumstances it can have many meanings. The Korean sense of humor is often very direct.
Yes. Especially when having to speak English. It doesn't necessarily mean they like you. They may be thinking, "How can I get out of this situation without looking bad?". However, if you know some Korean/they know some English I find Koreans LOVE puns and other 'silly' things (or maybe they're just humoring me).

Public perception and image matter a great deal to Koreans. Representatives of large companies are usually better received initially than those of smaller less well-known companies.
Bigger is better, period.

Try to obtain a formal introduction to make a business contact with Koreans. Korea is a relatively small country and relationships are instrumental in many parts of Korean life. Koreans value introductions and referrals from people they know. Use acquaintances, suppliers, accountants, lawyers or consultants to gain these introductions.
Relationships are EVERYTHING. If you have ANY connection with a business you NEED to use it. No matter that it's your friend's brother-in-law's cousin who is a manager there...get the connection (or contact point, as they call it here).

When seeking an introduction to a large Korean firm, see if it has a subsidiary where your company also has an office. If your subsidiary has dealt with the other firm or managers in the two firms know each other, this can serve as the means to introduce you to your target customer.
Yes, more on the relationships...this is better as it is a business relationship.

It is always very helpful to have a local partner.
Yes. Good luck getting shelf-space in an economy where intense competition is the norm without a self-interested partner.

Agents should be approved by the Korean government.
True, in many industries all participants need government certification. It not be very rigorous and only be a piece of paper to us, but to Koreans it's gold.

Cold calls and letters usually do not work.
Forget it...get a contact point, any contact point and work it.

Schedule meetings with Korean companies before arriving in the country, do not expect to arrive in Korea and then be able to meet with them.
Yes, make your schedule first so that they can prepare their team to meet you and arrange a suitable night out (as is almost always the case here). Many employees/team members might be out of town on business as well and there are different holidays here so to come during Choo-seok week (for example) is a big waste of time because NO ONE will be working.

Before choosing a local partner, research the market extensively to make sure you choose your local partner based on full information. It is advisable to establish relations with several firms in case partnerships break down.
Do as much research as you can, but don't expect full disclosure. Go for shorter-term contracts to start and then extend from there to give yourself elbow-room.

It is best to assign one person to represent your firm on a permanent basis. This allows personal relationships to develop which are critical for business success. This person can verify that work is getting completed. Frequent visits will assure the Korean business that you are committed to them.
Yes. You need someone who will consistently be there for the Korean contingent...Koreans will even follow this person to another firm of similar size so make sure it's a higher-ranking director or shareholder.

The Korean Trade Promotion Corporation (KOTRA) publishes a guide that provides an overview of business information.
KOTRA is ok, but they are government so many of them have little real business experience. Use them as a stepping-stone.

Many South Korean professionals are accustomed to Western customs because they studied or worked overseas. Almost all the businesspeople have some familiarity with Western culture. Government officials however tend to be more traditional and conservative.
Replace 'many' with 'some'. Almost all Koreans do things the Korean way even if on the outside they act Western.

Most South Koreans choose to hold a first meeting in their office. Punctuality is very important. Shaking hands is a common greeting with both men and women; it may be accompanied with a slight nod or bow.
As a seller you cannot be late..buyers in Korea can be late (but not you, of course). Be there on time and (especially the first time) double-check all directions because Seoul is a tough place to get around unless you know Korean or have been there at least once before. ABB = Always Be Bowing.

The exchanging of business cards is very ritualized and important part of a first meeting. The business card should be presented and received with both hands, with the writing facing the receiver. Show respect by reading the card slowly and placing it on the table in front of you. If possible have your cards printed in Korean on one side.
Both hands is ok...but pure Korean way is with the RIGHT hand and the left hand on the right breast, elbow, forearm, wrist or hand (going from less polite to most polite). Both hands is Chinese way and Koreans seem to appreciate your knowing their special way. Place cards either (i) in the order of seating in front of you (good for remembering names too) or (ii) with higher-ranking persons on top in a vertical line in front of you (this is harder as titles are a little different here).

Begin a first meeting with casual conversation about your trip. Do no try to accomplish too much at this first meeting. Koreans need to feel you out and get a sense of your intentions, trustworthiness and objectives.
Take it easy. Don't expect a lot of information on the first meeting. DO NOT take out a due diligence or questionnaire to fill out/have them fill out. You may not be invited back.

Koreans will try to match you with someone of similar rank. Keep this in mind when selecting a representative as it can be very important.
If you want to speak with the CEO then have your CEO or President at the meeting. If you send a 'manager' you will have offended them. If they send their CEO you need to have your highest-ranking director/board member at the meeting as well (even if it's just ceremonious).

Gifts are not required for early meetings. If you have established a relationship through writing or on the telephone, you may want to bring a small token such as a pen or a gift with the company logo. If you meet with a group, bring a gift for the senior person as well as all the subordinates. The senior person’s gift should be different and more expensive than the others. If you receive a gift do not open it in front of the giver.
Instead of a gift, offer dinner or paying for drinks after dinner. Gifts are appreciated (who wouldn't want one?) but it's more of a Japanese thing. If you are closing a deal then a commemorative souvenir might be nice.

Business Hours:
Most businesses are open from 8:30 or 9:00 a.m. to 6:00 p.m. on weekdays and from 9:00 a.m. to 1:00 p.m. of Saturdays.
From November to February government offices close daily at 5:00 p.m.
Banks are open from 9:30 a.m. to 4:30 p.m. on weekdays and from 9:30 a.m. to 1:30 p.m. on Saturdays.
Shop hours vary but most are open from 8:00 a.m. to 9:00 p.m. everyday.
Department stores are open from 10:30 a.m. to 7:30 p.m. everyday.
This is changing. Some might markets open at 9PM til 5PM, too.

Corporate Structure
Korean companies are dominated by chaebols, which are large business conglomerates, many of which are family owned and operated.
The chaebols are being broken up (by markets, economics and the passage of time) but their lineage is still important for Koreans.

The typical corporation has a chairman of the board at the top. Below the senior level are division chiefs, section chiefs, managers and employees. The corporate structure is heavily influenced by the Japanese model.
Yes.

Negotiation
Koreans consider a person’s character to be just as important as the contract or deal. To be successful you must develop a trusting personal relationship with your business partner. As part of developing this relationship Koreans spend time on business socializing. It is important to accept social invitations and to reciprocate. It may appear at first that business is not a major part of the agenda but of course, it certainly is.
If you can't drink or eat meat (like pork) or seafood you may have a problem doing business here. (Actually, Koreans understand personal and religious preferences, but to do everything like them is best, in the end.) Always try everything they ask you to eat or drink (even twice) and sleep on the plane-ride home.

Koreans prefer group consensus as their decision-making model. The senior person makes the final decision. Koreans tend to be very conservative and risk averse.
Don't try to get a decision from a junior manager. He cannot do anything without his senior's (and his senior's) approval anyways. Just move on to work on the next level (or, better, get your senior to work on his senior).

Aggressive or adversarial negotiations do not work in Korea. Your opposite negotiators may appear on the surface to agree just to keep discussions harmonious. You must give the average Korean time to reach agreement or the deal will never happen. They can appear to be rigid, stubborn and unyielding. You need to be clear about your position. It is best for you as the foreigner never to raise your voice or become visibly frustrated, unless absolutely necessary in the final stages of the negotiation. Remember that in making a decision the Korean businessperson will consider personal relationships and character as well as business.
Yes. And even if nothing happens Koreans will remember that you were a good person and will ask you to bid again later if they have the need or hear of someone looking for your product or service. Relationships here are measured by decades, not months.

Koreans do not like to say “no” directly and want to preserve harmony under all circumstances. You may need to ask several indirect questions to get to the true response.
True. And don't ask the same question many times...work the angles. Sometimes there is a logical reason why they are saying no and it has nothing to do with their original objection...and even when you know it you may think it doesn't make any sense...that's ok.

Avoid the word “win” which implies a one-sided benefit – the goal is harmony so use words like “we would like to receive the contract ” are more appropriate
Koreans as other hard bargainers will seek to gain as many concessions as possible from you.
When I hear a foreigner say "I want to win your business" I tell my boss "He really wants to work/partner with us". He is ALWAYS positive to that kind of language.

If you are asked the same question repeatedly it is to ensure the consistency of the information so no mistakes will occur.
If it's a question of fact or details in an order...not in negotiating necessarily.

Most Koreans are concerned with price over cost efficiency or effectiveness. Usually the top three proposals are invited to a financial review. The winning bid is usually the lowest bid passing the technical review.
Yes, too true, incredibly true. Koreans even have terms where they'd like to renegotiate the lowest bid and take competing bids after the bidding! But, once trust is gained they will return to the well many times and not be as worried about price.

Historically foreign firms have fared best when they work in collaboration with a Korean company.
Never try to go it alone unless you have a cadre of Koreans on staff who have the connections needed to get the job done...you'll be spinning your wheels.

Written contracts should be used in all transactions. Koreans view of contracts is different from the Western view. Koreans see contracts more loosely, believing they allow room for flexibility. Often the rules will change as the situation changes, it is important to be specific about responsibilities. This different view of contracts can be problematic and it is therefore advisable to consider and discuss future situations.
Koreans need contracts for virtually all business dealings, but (yes) they do tend to want to modify them a bit over time depending on circumstances.

If anyone else has any other ideas please let me know (email or in the comments).