That’s why it’s important.

You raise a valid point when you say that sometimes Chaebols have an overarching ambition to be #1 in everything. However, I wouldn’t knock that too much because in order to be great, you need to have a belief in your own Manifest Destiny. #1 in ships, TVs, chips, etc. who would of thunk it in the 60’s huh?

However, if Chung Mong-koo ever has wet dreams that he’ll surpass Toyota, he better sober up and be happy with being the Asian Volkswagen, otherwise he may run Hyundai Motors into the ground trying to reach a unattainable goal.

The Taiwanese economy is mostly made up of SMEs that manufacture components and OEM products for the larger Western/Japanese companies. Yes, they have no global brand, but so far they have done very well.

Acer comes to mind. And, in another field, Evergreen, which doesn’t come more global than that. After all, all this crap Taiwanese companies produce — in mainland China — has to be brought to the West… But true, there are not that many Taiwanese brands that get face recognition…

No need to apologize.

Yeah you’re right I should have also looked at the efficiency side of the chaebol. But my original intention was to look at the ethical side and if I made my point then well, my job is done.

It’s also interesting that you mentioned Taiwan. The Taiwanese economy is mostly made up of SMEs that manufacture components and OEM products for the larger Western/Japanese companies. Yes, they have no global brand, but so far they have done very well.

Now the thing about the chaebols is that they feel they have to no. 1 in everything to succeed. Being no.1 and having a global brand isn’t bad, but the problem with the chaebols is they, in the process, forget the basics of a successful business, such as a healthy balance sheet, value to shareholders, etc. Some end up overextending themselves and in effect lose more than they have gained.

I agree with WangKon here. Despite the many problems of chaebols, I think things are getting better. The chaebols realize that they have to improve governance or be left behind. They may be fighting it all the way, but it will happen, I believe, perhaps not as quickly as I or many would want, but it things will change. As far as Taiwan is concerned, they may not have any global brands, but that’s not to say there isn’t a serious amount of money being made there. The Taiwanese are investing heavily in China and are making pots of money, despite the unstable political situation. Some of Taiwan’s company’s are also huge in their respective industries, but are not well-known (I read about a couple in the semiconductor and electronics biz, but forget their names already!). I’m not sure how nationalistic Taiwan is, but it seems that chaebols benefit from while being limited by the Korean trend towards myopic nationalism and protectionism.

Sorry for the late response. I value my weekends and generally stay away from computers during that time. I took an extended weekend and just got back in the saddle today.

Anyways, I think you make some good points, however, you argue from a primarily ethical perspective (are Chaebols good/bad) rather then an economic perspective (are Chaebols efficient/inefficient), which in my opinion, makes your analysis incomplete.

I’d say that we should look at Chaebols from the larger context of economic development. American corporations were also rather protectionistic and plutocratic in their formative decades too. The big American companies of the past used what we can euphamistically say as “contract labor” to quell unions. Witness Also, the Japanese Chaebols, the Zaibatsu, also used organized crime to do their “head bashing” bidding. The military/industrial complex of the Zaibatsu also played a huge role is starting WWII, which necessitated their dismantle after the war.

Anyways, most industrializing nations have conglomerates that need to mature for the economy to reach the next level. Hopefully Korea’s brand of conglomerates can mature also.

Besides, what’s the alternative. Korean chaebols have created a lot of benefits as well. Taiwan doesn’t have any chaebol style conglomerates, but it doesn’t have any global brands either…

May I ask where did you hear that from?

Now if it was something that hot, I believe Robert would have told me to take it down.