The Changing Role of Te Chaebol
Charlotte Marguerite Powers
The Changing Role of Chaebol
Multi-Conglomerates in South Korea’s National Economy
The chaebol (財閥, 재벌) multi-conglomerates were instrumental in the development of the South Korean economy and will continue to be a source of great economic strength in the future. However, a weak system of corporate governance has exacerbated past financial failures in South Korea and leaves the Korean economy at future risk. To ensure Korea’s success in an increasingly globalized world the South Korean government should continue to streamline past reform and introduce new legislation to encourage a culture of better corporate governance among the chaebol conglomerates.
E
stimations about the future value of South
Korea’s massive multi-conglomerate corporations, commonly called the chaebol (財閥,
재벌), tend to be a function of the past roles they’ve played and failures they’ve caused in Korea’s economy. In similar ways, South Korea’s economic system under the chaebol has often been criticized as too corrupt or antiquated for the welfare of Korea’s modern economy. Some chaebol executives have abused the influence of their positions, and financial and structural features unique to the chaebol have created or exacerbated repeated financial failures in Korea.
Although useful during Korea’s industrialization and economic development, many agree that now the chaebol are only a hindrance to national progress; speeches by South Korean President
Lee Myung-bak have suggested to some that Korea’s economic future relies on the prosperity of small and medium-sized firms, rather than the chaebol.1 However, the importance of the chaebol for South Korea’s future economy has been too quickly dismissed. Given trends of the international economic system, the chaebol will remain the heart of South Korea’s economic prosperity for a long time to come, so long as the government encourages the continued development of good corporate structure.
The Changing Role of Chaebol
Multi-Conglomerates in South Korea’s National Economy
The chaebol (財閥, 재벌) multi-conglomerates were instrumental in the development of the South Korean economy and will continue to be a source of great economic strength in the future. However, a weak system of corporate governance has exacerbated past financial failures in South Korea and leaves the Korean economy at future risk. To ensure Korea’s success in an increasingly globalized world the South Korean government should continue to streamline past reform and introduce new legislation to encourage a culture of better corporate governance among the chaebol conglomerates.
E
stimations about the future value of South
Korea’s massive multi-conglomerate corporations, commonly called the chaebol (財閥,
재벌), tend to be a function of the past roles they’ve played and failures they’ve caused in Korea’s economy. In similar ways, South Korea’s economic system under the chaebol has often been criticized as too corrupt or antiquated for the welfare of Korea’s modern economy. Some chaebol executives have abused the influence of their positions, and financial and structural features unique to the chaebol have created or exacerbated repeated financial failures in Korea.
Although useful during Korea’s industrialization and economic development, many agree that now the chaebol are only a hindrance to national progress; speeches by South Korean President
Lee Myung-bak have suggested to some that Korea’s economic future relies on the prosperity of small and medium-sized firms, rather than the chaebol.1 However, the importance of the chaebol for South Korea’s future economy has been too quickly dismissed. Given trends of the international economic system, the chaebol will remain the heart of South Korea’s economic prosperity for a long time to come, so long as the government encourages the continued development of good corporate structure.