Updated July.30,2007 06:42 KST

It Takes All Nationalities to Run a Global Business
"Almost every local Chinese employee we hire in China leaves the company a year or two after they start working - just at the moment we finally decide we can trust in their ability. What should we do to solve this problem?"

So asked one of a couple dozen overseas branch presidents of a chaebol group after a lecture from an executive with General Electric.

Instead of answering the question directly, the GE executive asked in return, "Do you guarantee that these Chinese employees can become CEOs themselves? Are they given equal working conditions in which they can compete with their Korean colleagues and be evaluated on equal terms?"

Kim Yeon-hee, a partner at the Seoul branch of Bain & Company, an American consulting firm, recounted her surprising experiences at executive workshops for Samsung Electronics and LG Electronics. These companies have almost no foreign executives, she said, despite the fact that more than two-thirds of their sales come from overseas. For this reason, she said, "we can call Samsung Electronics and LG Electronics exporters, but not global enterprises."

Upon hearing this story, I was curious about just how many foreign executives are working for the conglomerates in Korea. The results of my informal survey were shocking.

There are no foreigners among the 186 executives at Hyundai Motor. POSCO has only one foreign executive, and LG Electronics three. Among Samsung Electronics' 827 executives, only 18 are foreigners, 13 of whom are advisors and others who are unregistered, according to its quarterly report from the end of March.

I was pretty sure there would be more foreign executives at the conglomerates' overseas units, but I was wrong. Not one of LG Electronics' 81 overseas branches is headed by a foreign president. POSCO has only two overseas branches headed by foreigners, and Hyundai Motor four. Although Samsung Electronics disclosed no official figures on the matter, it's known that almost none of its 80 overseas units are run by foreigners.

Of course, some of the Korean conglomerates, including Doosan, have recently employed foreign CEOs, even though they haven't been sold to foreign investors. Some others have promoted foreign employees to executive status. But such cases are still rare and make the news when they happen.

This no-foreigners practice runs in stark contrast to the way many global enterprises hire the most talented executives they can find, regardless of nationality. For example, GE has 20 branches throughout Korea, all of which are headed by Koreans. Almost all of their employees are also Korean. From the standpoint of GE headquarters in the U.S., it has entrusted foreigners with the management of its entire Korean operations. Dow Corning Corporation, a world-renowned silicon manufacturer, counts 40 percent of its executives as non-Americans.

Why have Korean enterprises lagged behind in the globalization of personnel? Presumably they are less open-minded and weaker when it comes to multiculturalism. Many of the executives at Korean enterprises have little experience working with foreigners and have difficulty making themselves understood in English.

In addition, Korean society is run by people who tend to make off-the-cuff decisions in many cases, rather than going through more objective systems. Under these circumstances, people learn how to see which way the wind blows, rather than cultivate their own abilities. Foreign employees often find it hard to mix well with Korean colleagues in this context.

No matter the reason, not hiring talented foreigners in this increasingly borderless, globalized era of competition is like binding our own hands and feet. During a recent visit to Korea, the president of Dow Corning's Asian regional headquarters said, "Korea needs to accept foreigners to build its own global brand."

Let's look back at how Rome prospered. The Romans were less intelligent than the Greeks, weaker than the Germanic people, and poorer than the Carthiginians. Nonetheless, the Roman Empire prospered for a thousand years because they were open-minded and flexible when it came to other peoples, says Nanami Shiono, the Japanese writer of the best-selling series "Stories of the Romans." Rome accepted members of other races if they shared Rome's values, regardless of their skin color and native places. Doing so, Rome was able to secure talented people with whom it could manage its territories.

I expect Korea's enterprises to succeed in globalizing their personnel following their globalization of their products and markets, and stand proudly as genuine global enterprises.

This column was contributed by Lee Jee-hoon from the Chosun Ilbo's Business News Division.