SUMMARY OF: System differences between Multinational and Korean
companies
In this lesson the speaker talked us about some difference between multinational and Korean company and
then he talked about the M&A process which he knows very well.
The first big difference that we have to taking into account is the concept of the relationship between the
company and banks. US multinationals lend a lot of money from banks in order to increase their ROI while
Korean company are more interested in their financial statement so try to not use banks.
The main topic of the presentation is the structure difference between Korean companies from the others.
He started talking about the Governance structure that in Korea see the BOD (and not the CEO as in others
countries) controls all the different committees (compensation committee, nomination committee, audit
committee, strategy committee and technology committee) while the CEO is responsible for the day-to-day
operations leading the functional organization, product organization and regional organization.
For how concerning the Functional organization all the profit centres in the overseas plants are leaded by
managing directory so all the performances of those rely on Managing director’s capability so the principal
issue concerning this organization are the high communication costs and the importance of monitoring
pant performances.
Also for the regional organization we can find similar issues as the importance to monitor their
performance and have exact information from them because the regional directors could keep and avoids
to tell to the CEO some important points that instead are relevant.
In the product organization, in addiction to find similar issues and similar points with the others
organizations like the managing director in the profit centre we can find a new issue that is the difficulty in
the financial system.
Then after a briefly discussion about the common service fee in Korea he talked about the project
management in the company which consist in three different phases: the first is the gate review process
where is discussed the project profitability management from quotation to mass production then we enter