South Korea During The Mid-Twentieth Century

During the mid-twentieth century, the economic outlook for East Asia, particularly Japan and Korea was bleak. The total Japanese death toll from the Second World War was well over three million[1] and its cities and infrastructure were ravaged by firebombing from Allied aircraft. Two of its cities were destroyed by atomic bombs and the further exacerbate the situation, the Far Eastern Commission demanded that Japan be de-industrialized to prevent it from ever becoming a threat again at the cost of dramatically reducing the standard of living the Japanese enjoyed in the early 1930s. In South Korea after facing the brutal atrocities of the Japanese regime, the civil war destroyed a quarter of its remaining infrastructure which amounted to more

State-led development in Korea let the government mandate which firms would enter certain markets and financial incentives such as tax breaks and low-interest loans attracted businesses and pushed others out of the markets. Although many of the first firms had close ties to the corrupt Syngman Rhee, the second government of Korea quickly realized that it would need the help of these entrepreneurs to modernize the economy. In its effort to quicken the pace of economic modernization, South Korea created an oligopolistic and monopolistic market in which only a handful of conglomerates operated. These conglomerates eventually came to be known as chaebols which roughly translates to “business family,” “monopoly,” or “money

All of the firm’s managers ultimately report to the Chairman (usually the founder or his successor) who makes key decisions and is a watchdog for poor performance. While many of the chaebols are adopting the professional management system preferred by their Japanese counterparts and the West, some still overly-emphasize family control. For example the Hyundai Group is ran by five of the founder’s sons who manage ten of the group members. Samsung was the first to use a competitive recruiting system and although it has the highest non-family member ratio, the family members still hold more power to dictate the