IC_LG Electronics

Hofstede

long-term oriented societies

one of the most uncertainty avoiding countries in the world

South Korea is a slightly hierarchical society

considered a Feminine society

considered a collectivistic society

South Korean society is shown to be one of Restraint

Hofstede

World system

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- sell resources cheaply to core countries

- some ecomomic control over peripheral countires

- growing power on the world stage

World system

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Lewis

very Reactive country:

- listens and reacts to partners action

- polite, indirect

- conceals feelings, mnever confronts

- must not loose face

- doenst interrupt

- very people-oriented

- statements comes near to promises

- diplomacy over truth

Ethical judgement

- research ethics educators in Korea teach graduate students Western (or American) ethical norm

- Korea has achieved a great financial success thanks to the speedy economic development. Korean society is evaluated yet to be immature in mental aspects.

Ignoring procedural ethics to obtain quick results

Ignoring qualitative process to obtain superior quantitative outcomes

Camouflaging inner conflicts valuing more outer appearance

High possibility of ethical flaws in upstarts in general

Society often goes as far as to consider norm-followers as idiots.

Ethical

https://jopeninnovation.springeropen.com/articles/10.1186/s40852-016-0030-3

Background

1947. It was founded by Mr. In-hwoi Koo for the manufacture of cosmetic creams.

1980 starting with intensive exports to developing countries, LG soon moved to capture markets in the developed world.

Background

2006, sales revenues were roughly $23 billion, generating profits of $500 million.

LG Electronics pioneered the growth of the Korean electronics industry.

Leadership Model

- Managers expect that their instructions will be obeyed and this expectation of obedience is usually fulfilled.

Authoritative management

- The good manager spends a great deal of time and effort ensuring that his team has a good working relationship and that all members feel fully integrated.

Affiliative management

Leadership Model

- The Koreans also employ a process of consensus decision-making in certain situations

Democratic management

https://www.worldbusinessculture.com/country-profiles/south-korea/management-style/

Leadership Chart

Jeong is about caring and trying to help someone without a real focus on self need

Leadership

Chart

Hofstede

extremely centralized

feel very much threatened

pragmatic

mindset

rather collectivist

relatively feminine

Hofstede

restrained

Korea

Russia

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Multi-Active:

- Talkative

- Multi-tasking

- Plans grand outline

- Emotional

- Confronts emotionally

- People-oriented

- Feelings before facts

- Relationship-oriented

- Roams back and forth

- Spoken word important

- Unrestrained Body Language

Lewis

World system

Periphery Country

-less developed

-receive disproportionally a small share of global wealth

-weak state institutions

Can improve

-by industrialization

-by stabilization of government and political climate

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World system

Start

Start

In 1990, they managed to start a warehouse business in Moscow, imported goods manufactured at its plants elsewhere.

Brand

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Goldstar Brand

Company's focus was on the Goldstar brand, but was a very slow process as consumers weren't familiar

Festivals

Shops & Festivals

Later, opened LG brand shops and promoted the products by having LG Festivals and Cooking events

Regional Center

Regional Center

Set up a regional center and a R&D center in St. Petersburg

Narodnaya Logo

In 2005, received permission to use the Narodnaya Marka Logo

Hofstede

High uncertainty avoidance society

Brazil is a hierarchical society

Rather Indulgence

Rather Feminine

Normative society

Rather collectivist

Hofstede

World system

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- sell resources cheaply to core countries

- some ecomomic control over peripheral countires

- growing power on the world stage

World system

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Lewis

Multi Active Country:

- talks most of the time

- does several things at once

- emotional

- people-oriented

- feelings before facts

- relatioship oriented

- spoken word important

- unrestrained body language

Establishing Operations

LG stabilizes its operations in Brazil in the mid-1990s and starts manufacturing televisions and VCRs at its factory in Manaus.

Establishing Operations

The company also installed a factory in Taubaté, located between the main Brazilian cities of São Paulo and Rio de Janeiro.

Strategies

Local currency became impossible, leaving managers struggling to manage operations. Many of the global players decided to scale back their operations as a result or temporarily exit the market. This proved to be a game changer in LG's strategy in Brazil.

Strategies

LG extended its strategy to Brazil through a series of well-orchestrated moves. First, when entering, focus on maximizing the benefits the government was providing through preferential access to land and lower tax rates for locating in underdeveloped areas.

The LG brand was little known in Brazil when the company first entered, and much needed to be done to raise consumer awareness. Capitalizing on the immense popularity of soccer in the country, LG piggybacked on its branding campaign in sponsoring sporting events.

Background

• LG came to India in 1993 with a joint venture with Beta vision however this was short lived.
• The Indian gvt introduced market reforms that allowed LG to start LGE India ltd in 1997
• It set up manufacturing operations with emphasis on creating consumer products designed for the Indian market.
• Using knowledge of developing markets, LG grew their market share in the country, becoming the leading supplier of a variety of products by 2006.

LG in India

Ethics

• LG used its knowledge base gathered from countries like Brazil to grow in India

• LG concentrated on getting the trust of workers and the people. This helped grow their reputation and profit.

• Concentrated on understanding local culture to grow thier business .

• To win over the people, LG showed they cared by catering to the needs of the rural population, an often overlooked demographic when it comes to business

Managerial Approach

• India is an enormously hierarchical society. It is imperative that there is a boss and that the manager acts like a boss.

• This may explain why the Indian managers at the LG factory where happy to be given free reign over most operations which broke with normal conventions of leadership in their country.

Managerial Approach

Leadership Model

• The predominant leadership model in India is Authoritarian
• There is a one way downward flow of information.
• There is an authoritarian leader and subordinates. Subordinates are expected to follow the leader without question.

Leadership Model

https://www.worldbusinessculture.com/country-profiles/india/business-management-style/

Hofstede Country Comparison

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• Comparing S.Korea and India according to Hofstede, shows great differences between the two cultures
• For most categories, esp. Uncertanity avoidance and Long term orientation, the cultures have different views.

Hofstede Comparison

• This therefore may support LG's choice to use local workforce.
• Perhaps the differences in culture would have hampered the companies growth and would have prevented LGEI from growing to the point it did.
• LG leaders showed an understanding of the cultural differences

World System Theory

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World System Theory

India is considered a semi-periphery country as it has a diverse economy and is technologically advanced however it still a developing country with a large Rural population

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Lewis Model

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India is a hybrid society having multi-active and reactive cultural traits

Multi-active : people are likely to be emotional, talkative,impulsive

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Reactive: meaning that they are polite, indirect, conceal feelings are patient ETC

S.Korean is much more of a reactive culture

Leiwis Model