Case Study 2.1 SK Telecom goes egalitarian in a hierarchical society.
Facts of the Case
Korea is one of the most homogeneous countries in the world, racially and linguistically. It has its own culture, language, dress and cuisine, separate and distinct from its neighboring countries. Hard work, filial piety and modesty are characteristics esteemed by Koreans. They are proud of their traditional culture and their modern economic success.
This paper documents a company which has a hierarchical culture and is attempting to adapt and practice a more egalitarian values.
Problem
1) SK Telecom is attempting to distance itself from which South Korean cultural value? What indicators of this value are identified in this case study? What other artifacts of this cultural value would you notice while visiting a South Korean company that upheld this national culture?
2) In your opinion, why is this hierarchical value so strong in South Korea? What are the advantages and disadvantages of this value in societies?
3) Do you think SK Telecom will be successful in integrating a more egalitarian culture, even though it contrasts with South Korea's culture? What are some of the issues that may complicate or support this transition
Discussion
In this paper, SK Telecom is attempting to distance itself from strong hierarchical culture in their company and want to support a more egalitarian values. Such culture may be identified by the extent of how low-hierarchy employees are empowered. Employee empowerment is our main indicator as it measures the discretion between each tier to another. SK Telecom’s level of employee empowerment was considered low considering the fact that their staffs cannot express their opinions and ideas. For example, it is stated that no one below Hur was allowed to question his decisions and Hur was expected to comply in the decision of the above, Furthermore all members of this chain of command were expected to comply with requests from above without question.
From the above we can state that power is concentrated in SK Company among few people in high ranking individuals thus involvement of the subordinates in decision making is not practiced. Even excellent ideas from the subordinates were shot down by their bosses, just because bosses in position have the power to do so. Subordinates are just made to do the work dispensed by the higher officials. Team leadership positions were given to only those with high seniority. South Korea's culture of deferring to people in higher positions was deeply ingrained in the telecommunications company.
Artifacts like lack of confidence, capacity to sustain peer pressure, locus of control, self efficacy and situation also indirectly becomes reason for positive or negative approach of employee towards organizational hierarchy. In majority of the Korean companies still the older people with experience are given new projects while younger generation who has enough talent are not encouraged or allowed to undertake a challenging task. Not particularly in South Korea but in any professional organization the above mentioned factors should be balanced along with egalitarianism, which is not visible in South Korea so far.
The reason for the hierarchical value being so strong in South Korea is because of their strong cultural traditions and customs during their monarchy era. A monarchy is a form of government in which sovereignty is actually or nominally embodied in a single individual or a family. The artifacts of this monarchy still exist in South Korean culture and tradition.
Advantages of Hierarchical Organizations
A) Authority and responsibility are clearly defined.
B) Clearly defined promotion path.
C) There are specialists managers and the hierarchical environment encourages the effective use of specialist managers.
D) Subordinates respect higher officials. Discipline can be maintained in an organization.
E) Employees very loyal to their department within the organization.
Disadvantages of Hierarchical Organisations
A) The organization can be bureaucratic and respond slowly to the changing customer needs and the market within which the organization operates. As decision making is centralized, the person who takes decision might not be totally aware of situation or issue.
B) Communication across various units can be poor especially horizontal communication as there is low process of information across the traditional hierarchy organizational structure.
C) Creativity, efficiency lacks as employee involvement in decision making is minimal/low.
D) There is limitation to development of knowledge and skills of employee as they are not given stimulating tasks.
E) Job positions are not allotted based on talent, skill or intellect but on seniority, which is not optimal or even detrimental to the survival or growth of the company.
F) There is more chance of fraudulence at higher level of hierarchy as there is low information processing and centralized decision making.
G) We perceive dishonor and hindrance to employee /sub ordinates self-respect. I think SK Telecom will be successful in integrating more egalitarian culture, even though it contrasts with South Korean culture because this egalitarian culture(decentralization of decision) permits prompt and more accurate decisions because decisions are made by those who are fully aware of the realities of the situation not by management only. Unlike centralize decision making, decentralize decisions can be made near the point of action without consulting higher levels and without waiting for approval of top executives thus subordinates who deal with root level issues can come up with good ideas which if implemented ultimately benefits the whole organization.
In addition, this more egalitarian culture will improve organizational communication and efficiency. The problems of red-tape and bureaucratic delays will be reduce and it makes a democratic management and flexibility of operations in the organisation.