Since the establishment of diplomatic relations between South Korea and China in 1992, South Korea has attracted a large number of Korean investors to the Chinese market through its proactive open-door policy and expansion of overseas investment. Mean...
Since the establishment of diplomatic relations between South Korea and China in 1992, South Korea has attracted a large number of Korean investors to the Chinese market through its proactive open-door policy and expansion of overseas investment. Meanwhile, China, through its reform and opening-up policies of the 1990s, offered various policy incentives and tariff reductions to attract foreign capital. Against this backdrop, a unique business model emerged: the South Sino-Korean joint venture, which has become a crucial form of economic exchange and cooperation between the two countries. Notably, these joint ventures are often established by SMEs rather than large corporations. These companies face the challenge of developing independent survival strategies amidst institutional uncertainty and cultural differences. This study aims to analyze the operations and characteristics of these SMEs through case studies.
Previous research has primarily focused on quantitative empirical analyses utilizing statistical data or case studies of large corporations, failing to fully understand the organizational dynamics and industry-specific decision-making processes of SMEs. This study employs a qualitative case study approach to conduct an in-depth comparative analysis of two representative joint ventures, Company A and Company B, which successfully completed their projects in Shandong Province. To enhance the reliability of the study, primary data such as meeting minutes, financial data, joint venture agreements, and internal reports were collected, and interviews were conducted with executives and employees in both China and Korea at the time.
This study focuses on the corporate organization itself rather than external environmental factors. The theoretical framework analyzes the relationship between the organization itself and its behavioral patterns from the perspective of organizational behavior theory, adopting the "Basic Model of Organizational Behavior" proposed by Robbins (2018). This study applies this methodology to the management practices of Sino-Korean joint ventures, case studies of Company A and Company B from three perspectives: inputs, transformation process, and outputs. This study adapts Robbins's original model to the specific characteristics of Sino-Korean joint ventures. Inputs refer to organizational structure and business model, transformation process refers to human resource management and crisis and change response, and final outputs refer to corporate performance and viability.
By comparing and analyzing the similarities and differences between Company A and Company B, this study aims to identify the factors that contributed to Company A's failure and Company B's success. The case study revealed that Company A's failure stemmed from the interplay of complex internal factors, including unclear power structures, cultural conflicts, poor contract design, informal decision-making, and lack of leadership. In contrast, Company B established a foundation for stable growth through a clear ownership structure, transparent accounting, trust-based decision-making, leveraging local networks, and a technology transfer and localization strategy. Furthermore, by emphasizing management autonomy and feedback mechanisms, it successfully transformed cultural differences into collaborative capabilities. This comparison reveals that the key factors determining the success or failure of SMEs are not simply external institutions or economic environments, but rather internal organizational structure design and cultural adaptability. In particular, Sino-Korean joint ventures in the 1990s operated in an uncertain environment characterized by legal deficiencies and institutional transitions. Therefore, building trust within the organization, maintaining a clear distribution of power, and maintaining transparent communication systems were crucial for survival. Furthermore, in seeking commonalities between socialist management culture and the Korean corporate operating model, various organizations experimented with a new collaborative model called "institutional hybridization."
In summary, this study empirically demonstrates how SMEs in Korea-China joint ventures in the 1990s achieved organizational adaptation and management innovation amidst institutional transitions and cultural differences. Furthermore, by utilizing Robbins' organizational behavior framework to analyze the survival mechanisms of these enterprises within the input-transformation-output cycle, this study offers a new theoretical perspective on joint venture research. This study offers practical and policy implications for developing future management strategies for East Asian international joint ventures, designing cross-cultural collaboration models, and building corporate networks.