Essays on Kumho Asiana Group - the Family Business Tradition in South Korea Case Study

Download full paperFile format: .doc, available for editing

The paper "Kumho Asiana Group - the Family Business Tradition in South Korea" is a great example of a business case study.   The Kumho Asiana Group is a South Korean conglomerate of companies engaged in various sectors of the economy. The conglomerate has interests in tyre manufacturing, transportation including logistics and chemicals. Most of its products are manufactured from synthetic rubbers, resins and chemicals. It is also engaged in the processing of electronic chemicals and the manufacture of building materials. Its range of chemical products includes monomeric, polymeric, modified and special methylene diphenyl diisocyanate.

One of the conglomerate's companies is among the top tyre producers in the country. The conglomerate also has an engineering and construction division which offers architectural services, civil engineering services, plant engineering and construction of houses. Its other services include urban transportation, air transport and insurance services. It also engages in air refueling services. The company was established in 1946 and has grown from strength to strength since then. The group headquarters are in Seoul, South Korea. The Kumho group started off as a family business owned Park family of South Korea.

Recently, the Park Sam-Koo returned to the helm of the conglomerate after 15 months of a legal battle over its ownership. Park Sam Koo has been engaged in a struggle with his brother over control of the group with his brother Park Chan-Koo and responsibility for the groups continued poor economic performance. Big family businesses are a feature of the South Korean economy which is dominated by Conglomerate referred to as Chaebols. In these family businesses, the chairman is all-powerful controlling all the operations of the company.

However, Bloch, Kachaner and Stalk (2012) argue that the family business model is proving to be unsuccessful in today’ s competitive business environment. In this paper, we analyze how the Kumho Asian group can develop strategies to compete in a competitive global environment that is increasingly shunning the family business model. The Family Business tradition In South Korea According to Campbell and Keys (2002), family businesses in South Korea emerged from the political economy of the 1950s. Previously, South Korea has been under the power of its colonial master Japan. After the departure of the Japanese colonialist, assets of Japanese firms passed on to a few South Korean businessmen.

Michell and Palihawadana (2008) allege that these businessmen had close links to the Syngman ruling regime of 1948 to 1960 were favoured by government policy in return for a kickback. By the time, the military took power in 1961, these firms were too integrated into the South Korean economy to be done away with. Although, the military government arrested and prosecuted the owners of these businesses for corruption in the Rhee regime it realized their importance in the growth of the Korean economy.

The military regime subsequently charged fines to the corporate leaders and negotiated with them to collaborate in the modernization of the Korean economy. From then onward, Family businesses became an integral part of the South Korean economy. The astounding growth of the South Korean economy in the 19 can be credited to Government corporation with the family businesses. According to Campbell and Keys (2002), the role of the Chaebol was to implement economic footprints formulated by the government. Chang (2003) shows the success of family businesses in South Korea was aided by two factors; access to almost unlimited credit and favourable treatment by the government.

Through the 1980s the government enabled the Chaebols to access foreign loans which the government guaranteed just in case the Chaebol failed to pay (Chang, 2003).


Bloch, A., Kachaner, N., & Stalk, G. (2012). What You Can Learn From Family Business. Harvard Business Review, 90

Campbell II, T. L., & Keys, P. Y. (2002). Corporate governance in South Korea: the< i> chaebol experience. Journal of corporate Finance, 8(4), 373-391.

Chrisman, J. J., Chua, J. H., & Sharma, P. (2005). Trends and directions in the development of a strategic management theory of the family firm. Entrepreneurship theory and practice, 29(5), 555-576.

Hargittay, P., & Kleiner, B. H. (2005). Effectively Managing Korean-American Businesses. Management Research News, 28(6), 55-65.

Michell, P., & Palihawadana, D. (2008). Exploring the components of success for the Korean chaebols. Journal of Business & Industrial Marketing, 23(5), 311-322.

Morck, R., & Yeung, B. (2003). Agency problems in large family business groups. Entrepreneurship Theory and Practice, 27(4), 367-382.

Sharma, P. (2004). An overview of the field of family business studies: Current status and directions for the future. Family business review, 17(1), 1-36.

Ward, J. L. (2011). Keeping the family business healthy: How to plan for continuing growth, profitability, and family leadership. Palgrave Macmillan.

Zahra, S. A., & Sharma, P. (2004). Family business research: A strategic reflection. Family Business Review, 17(4), 331-346.

Chang, S. J. (2003). Financial crisis and transformation of Korean business groups: The rise and fall of chaebols. Cambridge: Cambridge university press.

Download full paperFile format: .doc, available for editing
Contact Us