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By Kim Jong-nam and Lee Joong-hak
1. Diversity and Korean organizational culture
Since diversity is a problem in Korean corporations, some companies in Korea have endeavored to innovate their organizational culture in varied ways. They have adopted flexible working hours, a looser dress code, and new forms of address between employees (instead of using position titles, they now use "Nim," which is similar to "Sir" or "Madam").
According to Alfonsus Trompenaars' types of organizational culture, Korean corporate culture is in the "Eiffel tower" category. Cultures in this category are top-down, centralized, formal, and task-oriented. Tasks are more valued than employees, and decision-making and communication are vertical. This is analogous to an army, which moves unilaterally towards one goal. "Eiffel tower" organizations do not need various opinions. In fact, free and different opinions are detrimental to effectiveness in an army, where people wear uniforms and follow strict rules. Thus, Korean corporations have typically preferred male employees who, due to the requirement that all able South Korean men complete military service, have developed these skills of unity and following what you are told to do. This may be one reason why Korean corporate culture is so male-centric.
In fact, Korean corporate culture is famously homogenous in general. According to research done by the Korean Chamber of Commerce and McKinsey in 2016, in which 40,000 employees of 100 Korean companies were surveyed, only 23 Korean companies are at the top level of global corporate culture. 91% of medium-sized companies were "weak" in this category. Clearly, Korean corporate culture is not measuring up to global standards.
If this matters for organizations' effectiveness, which has been shown again and again, what can we do? In the first place, the corporate practice that should be changed as soon as possible is the culture of "do as you are told to." In order for this to be eliminated successfully, hirings and promotions based on homogeneity should be ceased and people from diverse backgrounds should be selected and nurtured. If people from diverse backgrounds are introduced to organizations and successfully made full contributors to the company culture, the diversity of opinions will increase, as well as the frequency with which employees challenge norms and conventions. Then, organizational performance will improve.
In 2012, it was generally reported that the problems that had caused Toyota's recalls over the previous few years had not been spotted due to their "pure blood system." At that point, all 29 people on the board of directors were ethnically Japanese who had been internally promoted. Because of this homogeneity, they had not been able to identify the serious problems that were occurring globally. The lesson to be learned here is that organizations that are homogeneous tend to not respond to business issues appropriately.
However, according to Edgar Schein, a well-known expert in organizational culture, organizational culture cannot be changed by just adjusting tangible or visible artifacts. The deepest foundation of organizational culture is the assumptions that we take for granted unconsciously. These assumptions cannot be set quickly and deliberately but rather are formed by various experiences that employees in organizations have over long periods of time, especially critical incidents that happen in the organization. Thus, if Korean companies adopt a diversity strategy within a short period of time, it cannot be part of the culture until it becomes habitualized. If they are not habitualized, the diversity strategies that Korean companies pursue cannot work as effectively as they would like since they are so temporary. It is not enough, then, to simply hire a few employees for the sake of "diversity"; rather, hiring practices should be permanently changed so that it can become part of the culture.
2. The necessity of a female-centered diversity strategy
As mentioned above, Korean corporations rank poorly in diversity management. Based on Forbes' 2012 "Global Diversity Rankings," Korea is fifth-lowest in terms of the ratio of female to male talent in boards of directors. Specifically, it is 1%. Japan, which showed the closest characteristics to Korea, lagged behind with 0.9%. Thus, the diversity strategy that Korean companies should adopt first is the active hiring and promotion of female employees.
Korean companies can get additional benefits from hiring and promoting female employees besides an increase in diversity. In the first place, as the Korean population ages, the working age population decreases, and the average age in corporations will increase. Naturally, organizations' energy is expected to shrink. The most immediate and effective method for resolving this is using female talent. Additionally, if more females work in corporations and earn salaries, their consumption level will increase, and markets such as retail and manufacturing will expand. Thus, an active interest in utilizing female talent will help us resolve other issues currently facing Korea.
It is clear that Korean corporations' lack of diversity is increasingly becoming a problem in creating an effective corporate culture, and female-centered diversity strategies are a great way to combat this stifling homogeneity.
Kim Jong-nam is the founding CEO of META (www.imeta.co.kr) and the author of two books, Organizations without Meetings and Breaking the Silent Rules.Lee Joong-hak (edujoonghak@lotte.net) is a manager in the People Innovation Lab at Lotte Academy, where he is in charge of competency assessment.
