Global Standards vs. Local Specificity in Corporate Restructuring : Lessons from the Korea

Abstract

This paper has investigated institutional changes in corpo-rate sector in Korea. The following three areas of institutional reform have been covered by the case studies of the relevant firms: 1) workforce restructuring in labor .management relations, 2) independent directors in corporate governance, and 3) business restructuring. It first confirms the importance of transparency in corporate management and institutions as one of the most fundamental requirements of the market economy and second, the importance of how to handle some tension betwen the global standards and local specificity in corporate reform. The paper has argued that emphasis on flexibility as a global standard in labor mar-kets tend to result in segmented labor markets when it faces with local specificity of strong labor unions. Emphasis on market-based corporate restructuring as global standard in restructuring might not work well, given the local specificity of opaque corporate governance which accord high premium for the controlling management. Also, introduction of independent directors as a global standard in the board might have limited impacts when there is strong and long .term owners in place to keep personal control over the firms (local specificity).