Changes in Economic Environment, Learning, and Dynamic Capabilities in Korean Firms

By Hong Y. Park, Geon-Cheol Shin, Sunho Jung and Yong-Seung Park.

Published by Change Management: An International Journal

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Article: Electronic $US5.00

Korean firms (chaebols) faced increasing global competition as Korea became a member of the WTO and OECD, and the world economy continued to globalize. These changes in the economic environment led to a Korean economic crisis that caused Korean firms to transform. This paper investigates factors that contributed to the economic crisis and examines Korean firms’ learning and innovations based on knowledge learned from the economic crisis. Some Korean firms’ financial resource selection and deployment were ill-prepared for the changes in the economic environment (global competition); these firms were dissolved as the economic environment drastically changed. Other Korean firms learned the importance of multiple factors: managers’ awareness and adaptabilities to changes in market conditions, corporate core competency and capability, managers’ investment decisions, and principles of corporate management. Many Korean firms increased competitiveness by making changes in their competitive mindset and adopting new business practices after the economic crisis. Emphasis on competence-creation and globalization, the most prevalent changes, made Korean firms competitive.

Keywords: Business Practice Innovation, Competence Creation, Corporate Culture, Dynamic Capabilities, Knowledge, Learning, Novelty Creation, Changes in Selection Environment

Change Management: An International Journal, Volume 12, Issue 2, pp.19-39. Article: Print (Spiral Bound). Article: Electronic (PDF File; 759.828KB).

Dr. Hong Y. Park

Professor of Economics and Braun Research Fellow, Department of Economics, College of Business & Management, Saginaw Valley State University, University Center, Michigan, USA

Professor Park earned his undergraduate degree from Kyung Hee University, Korea, M.A. from Seoul National University, MBA from Fairlegh Dickinson University and Ph.D. from Utah State University. Professor Park specializes in the theory of the firm and economics of organization. His research interests include sourcing strategies, work incentives, application of the theory of the firm to business practices and strategies. He has taught courses in microeconomics, macroeconomics, economics of organization, managerial economics and money and banking. Professor Park's publication includes articles on work incentives, sourcing strategies and organizational forms. His research has been published in Human Relations, Managerial and Decision Economics, Economic Studies, Annals of Regional Science, American Journal of Business, Multinational Business Review and Journal of Purchasing and Supply Management. He has recently published two research monographs on the theory of the firm and corporate strategies. He was a Fulbright Scholar at Kyung Hee University, Seoul, Korea in the 2002–2003 academic year. He was an International Scholar at Kyung Hee University, Seoul Korea in 2009–2010. Professor Park served as the president of Korea–America Economic Association and the chair of advisory board for the same association in 2009–2010. He received the Braun Research Fellowship for three years in 2013 from Saginaw Valley State University.

Dr. Geon-Cheol Shin

Professor, College of Business Administration, Kyung Hee University, Seoul, South Korea

Geon C. Shin is currently a professor of marketing at Kyung Hee University in Seoul, Korea. He holds an undergraduate honors degree from Kyung Hee University, and an MBA and a Ph.D. from Georgia State University. He has previously held visiting appointments at Michigan State University and Zhejiang University. His teaching and research interests are in the areas of marketing strategy and global business. His research activity has resulted in publications in scholarly journals including: Korean Management Review, Korean Journal of International Business, Journal of Product Innovation Management, International Quarterly Journal of Marketing, European Journal of Purchasing and Supply Management, Journal of Travel and Tourism Marketing, Marketing Trend Review, etc. Dr. Shin is currently serving as executive director of the Center for Global Innovation and Entrepreneurship, director of the Korean Marketing Association, and senior director of the Korean Academy of International Business.

Dr. Sunho Jung

Assistant Professor of Marketing, School of Management, Kyung Hee University, South Korea

Sunho Jung (Ph.D., McGill University) is an Assistant Professor of Marketing in the School of Management at Kyung Hee University. He has published in psychology and statistics journals. His main research interest is in the development and application of statistical and psychometric methods for understanding consumer behavior and improving marketing decision-making.

Dr. Yong-Seung Park

Professor of Management, School of Management, Kyung Hee University, Seoul, South Korea

Yong-Seung Park is Director of the Institute for Peace through Commerce and professor of human resources and industrial relations at Kyung Hee University School of Management in Seoul, Korea, where he has taught since 1999. Prof. Park is a committee member of National Labor Relations Commission of Korea, vice president of the Korean Academic Society for Human Resource management, and a steering committee member of UN Global Compact Network Korea. Dr. Park received his doctorate from the Carlson School of Management at the University of Minnesota. His research focuses on strategic human resource management, work organisation, labour-management cooperation, and corporate social responsibility, including publications in the Journal of Risk and Insurance, Journal of Labor Research, Total Quality Management Journal, Economic and Industrial Democracy, Nordic Journal of Political Economy, and other social science journals, including Korean language journals.