Transformation of Korean HRM based on Confucian Values

Abstract

This study aims to find out the role of the Confucian family value in

the process of the transformation of Korean HRM and IR in a hypercompetition

period. I analyzed the characteristics and the

transformation of Korean companies HRM as well as the core value

system of Confucian familism. I suggest that a successful

transformation of HRM in Korean companies requires an interplay

between two factors. First is the genetic factor based on traditional

Confucian culture of Korea (i.e., the DNA of Korean HRM), of which its

advantages must be respected and preserved. Second factor is an

adaptation ability, which modifies its own core competency and routine

through an interaction with the environment.

Korean HRM stands at a turning point now. The Korean economy is

facing a hyper-competition in the global market. To survive, Korean

companies have to improve their competitiveness. Also they must solve

the problem of seniority-based HRM of Confucian values that hinders

their competitiveness.

To confront an inevitable transformation of the management system,

Korean companies tried to solve the problem by bringing in a rapid

growth process of North American HRM practices. But, unanticipated

side effect has occurred in this process. As American HRM was

uniformly adopted, traditional teamwork, organizational loyalty, and the

advantages of traditional Korean companies were damaged. So many

companies have shown a problem of decreased organizational

effectiveness. In the case of employment relations, the rapid layoff and

an increase of temporary workers via organizational restructuring have

caused an increase of transaction cost of labor because of union

resistance. These kinds of mistakes were caused by a culture clash

between Korean corporate reality based on a Confucian tradition and

American management policies.

But some companies, which have maintained traditional HRM

characteristics, maximized the advantages of Confucian ideology and at

the same time have adopted HRM policies based on performance in

their own way. These companies succeeded in the transformation of

HRM with less conflict with their labor union.

Therefore, we need to pay an attention to the genetic factors of Korean

HRM practices in order to understand and achieve successful

transformation of Korean HRM practices.