What Are the Benefits and Disadvantages of the Korean Chaebol Structure?

What be the benefits and disadvantages of the Korean Chaebol structure? Definition of a Chaebol: refers to a South Korean form of affair tangled. They are almighty global multinationals owning numerous international enterprises. The Korean word operator stage vocation family or monopoly and is often used the way conglomerate is used in English (source: Wikipedia) Benefits: * Economies of Scale and Scope: As the Chaebols have diversified into various industries, they are composed of several(prenominal) companies that make economies of scale: they lower the average cost per unit of step through increased harvest-festivalion and through the number of contrastive goods produced. * fellowship and experiences on diversified business: Having cumulated knowledge and experiences of legion(predicate) companies in a Chaebol helps to improve the decision-making but in any case to uprise new business opportunities. * Reputation and brand holler: The ceremonio us reputation and the cite of a Chaebols brand name make its diversification easier. * Avoiding the risk of a single product business: If we scoop out the example of what happened with HCI in the 1970s, we can check off that companies had to diversify, creating by the way the Chaebols, in order to avoid bankruptcy.

Disadvantages: * drop of business transparency + Autocratic chief operating officer: the Chaebols are nether the control of influent families, so we usually abide by that the CEO is not only the manager, but also the owner. Thats why the decisions he makes are not constantly the best(p) for the company, and the overlook of control by the Board of directors or Auditors is also preeminent to the opacity! of the decision-making process. * Prolonging lives of unprofitable businesses: Chaebols management strategy has always been to sour in size, sometimes ignoring the profitability, thats why when a business is no more worthy, it will be maintained quite of being cut, which can lead to the collapse of the entirely structure. * lumbering bureaucracy: this can increase...If you want to get a proficient essay, order it on our website: OrderEssay.net

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