Chaebol (alternatively Jaebol) ['ʨɛːbol] refers to a South Korean form of business conglomerate. The Korean word means "business group" or "trust" and is often used the way "Big Business" is used in English. Jamo redirects here. ... Hanja is the Korean name for Chinese characters. ... The Revised Romanization of Korean is the official Korean language romanization system in South Korea. ... McCune-Reischauer romanization is one of the two most widely used Korean language romanization systems, along with the Revised Romanization of Korean, which replaced (a modified) McCune-Reischauer as the official romanization system in South Korea in 2000. ... For Korea as a whole, see Korea. ... Conglomerate is the term used to describe a large company which consists of divisions of often seemingly unrelated businesses. ...

There are several dozen large Korean family-controlled, government-assisted corporate groups which fall under this definition, and have played a major role in the South Korean economy since the 1960s. Some have become well-known international brand names, such as Samsung, Hyundai and LG . South Koreas economic growth over the past 30 years has been spectacular. ... The 1960s decade refers to the years from 1960 to 1969. ... This article is about brands in marketing. ... Samsung Group is one of the largest South Korean business groupings. ... South Korean business tycoon Chung Ju-yung, founder and honorary chairman of Hyundai Group, 1998 Hyundai refers to a group of companies founded by Chung Ju-yung in South Korea, and related organizations. ... LG redirects here. ...

The chaebol were powerful independent entities acting in the economy and politics, but sometimes they cooperated with the government in the areas of planning and innovation. The government worked hard to encourage competition among the chaebol in certain areas to avoid total monopolies.

The role of big business extended to the political arena. In 1988 a member of a chaebol family, Chong Mong-jun, president of Hyundai Heavy Industries, successfully ran for the National Assembly. Other business leaders also were chosen to be members of the National Assembly through the proportional representation system. Hyundai even played a role in the slight thawing of relations between North and South Korea since 2000. South Korean business tycoon Chung Ju-yung, founder and honorary chairman of Hyundai Group, 1998 Hyundai refers to a group of companies founded by Chung Ju-yung in South Korea, and related organizations. ... North Korea, officially the Democratic Peoples Republic of Korea (DPRK; Korean: Chosŏn Minjujuŭi Inmin Konghwaguk; Hangul: 조선민주주의인민공화국; Hanja: 朝鮮民主主義人民共和國), is a country in eastern Asia... Year 2000 (MM) was a leap year starting on Saturday (link will display full 2000 Gregorian calendar). ...

The top 10 largest chaebol in Korea in 2004 by total revenues were Samsung ($89.1 billion), Hyundai Motor Company ($57.2 billion), LG ($50.4 billion), SK ($46.4 billion), Hanjin ($16.2 billion), Hyundai Heavy Industries ($10.5 billion), Lotte ($6.3 billion), Doosan ($4.5 billion), Hanhwa ($4.4 billion), and Kumho Asiana ($2.8 billion).[1] Samsung Group is one of the largest South Korean business groupings. ... The Hyundai Motor Company, a division of the Hyundai Kia Automotive Group, is South Koreas largest and the worlds Sixth Largest Automaker. ... LG redirects here. ... SK Corporation (KSE: 3600) is a Korean-based Chaebol or conglomerate. ... The Hanjin Group is a Korean conglomerate, or Chaebol. ... Hyundai Heavy Industries Co. ... Lotte Group is a large international chaebol (conglomerate) founded in June 1948 in Tokyo, Japan by a South Korean businessman, Shin Kyuk-Ho (, ). Shin Kyuk-Ho is also known by his Japanese name Takeo Shigemitsu ). Originally called , the company grew from selling chewing gum to children in post-war Japan... DOOSAN, the 10th-largest business group in South Korea, has been around for over 109 years and is one of the countrys longest running companies. ... Hanhwa (Korean:한화), formerly known as Hankook Hwayak (Korean:한국화약), is one of the largest conglomerates, or chaebol, in Korea. ... Kumho Asiana Group is a large South Korean chaebol (conglomerate), with subsidiaries in the automotive, industry, leisure, logistic, chemical and airline fields. ...

Management structure

Some chaebol are one large corporation, while others have broken up into loosely connected groups of separate companies sharing a common name. Even in the latter case, each is almost always owned, controlled, and/or managed by the same family group. For other uses, see Corporation (disambiguation). ...

South Korea's chaebol are often compared with Japan's keiretsu business groupings, the successors to the pre-war zaibatsu. While the "chaebol" are similar to the "zaibatsu" (the two words are Korean and Japanese pronunciations of the same Chinese characters), there are major differences between chaebol and keiretsu: A keiretsu lit. ... Zaibatsu ) is a Japanese term referring to the financial cliques, or business conglomerates, whose influence and size allowed for control over significant parts of the Japanese economy throughout the Edo and Meiji periods. ...

• Chaebol are still largely controlled by their founding families, while keiretsu are controlled by groups of professional managers.
• Chaebol are centralized in ownership, while keiretsu are more decentralized and connected by cross-shareholdings.
• Chaebol often formed subsidiaries to produce components for exports, while large Japanese corporations often employed outside contractors.
• Chaebol are prohibited from owning private banks, partly in order to increase the government's leverage over the banks in areas such as credit allocation. In 1990, government regulations made it difficult for a chaebol to develop an exclusive banking relationship. Keiretsu have historically worked with an affiliated bank, giving the affiliated companies almost unlimited access to credit, although this is no longer a universal feature of keiretsu.

History

South Korea's economy was small and predominantly agricultural well into the mid-20th century. However, the policies of President Park Chung Hee spurred rapid industrialization by promoting large businesses, following his seizing power in 1961. Government industrial policy set the direction of new investment, and the chaebol were to be guaranteed loans from the banking sector. In this way, the chaebol played a key role in developing new industries, markets, and export production, helping place South Korea as one of the East Asian Tigers. (19th century - 20th century - 21st century - more centuries) Decades: 1900s 1910s 1920s 1930s 1940s 1950s 1960s 1970s 1980s 1990s As a means of recording the passage of time, the 20th century was that century which lasted from 1901–2000 in the sense of the Gregorian calendar (1900–1999... The President is head of state of South Korea. ... Park Chung-hee (November 14, 1917 – October 26, 1979) was former ROK Army general and the president of the Republic of Korea from 1961 to 1979. ... Year 1961 (MCMLXI) was a common year starting on Sunday (link will display full calendar) of the Gregorian calendar. ... Map of East Asian Tigers  Hong Kong  Singapore South Korea  Taiwan, Republic of China Skyline of Hong Kong Island, taken from Tsim Sha Tsui, Kowloon, Hong Kong The skyline of Singapores Central Business District (CBD) seen here at dusk Taipei is Taiwans largest city and financial center. ...

Although South Korea's major industrial programs did not begin until the early 1960s, the origins of the country's entrepreneurial elite were found in the political economy of the 1950s. Very few Koreans had owned or managed larger corporations during the Japanese colonial period. After the departure of the Japanese in 1945, some Korean businessmen obtained the assets of some of the Japanese firms, a number of which grew into the chaebol of the 1990s. These companies, as well as certain other firms that were formed in the late 1940s and early 1950s, had close links with Syngman Rhee's First Republic, which lasted from 1948 to 1960. It was alleged that many of these companies received special favors from the government in return for kickbacks and other payments. This is a Korean name; the family name is Rhee Syngman Rhee or Lee Seungman or Yee Sung-man (March 26, 1875 – July 19, 1965) was the first president of South Korea. ...

When the military took over the government in 1961, military leaders announced that they would eradicate the corruption that had plagued the Rhee administration and eliminate injustice from society. Some leading industrialists were arrested and charged with corruption, but the new government realized that it would need the help of the entrepreneurs if the government's ambitious plans to modernize the economy were to be fulfilled. A compromise was reached, under which many of the accused corporate leaders paid fines to the government. Subsequently, there was increased cooperation between corporate and government leaders in modernizing the economy.

Government-chaebol cooperation was essential to the subsequent economic growth and astounding successes that began in the early 1960s. Driven by the urgent need to turn the economy away from consumer goods and light industries toward heavy, chemical, and import-substitution industries, political leaders and government planners relied on the ideas and cooperation of the chaebol leaders. The government provided the blueprints for industrial expansion; the chaebol realized the plans. However, the chaebol-led industrialization accelerated the monopolistic and oligopolistic concentration of capital and economically profitable activities in the hands of a limited number of conglomerates.

Park used the chaebol as a means towards economic growth. Exports were encouraged, reversing Rhee's policy of reliance on imports. Performance quotas were established.

The chaebol were able to grow because of two factors-- foreign loans and special favors. Access to foreign technology also was critical to the growth of the chaebol through the 1980s. Under the guise of "guided capitalism," the government selected companies to undertake projects and channeled funds from foreign loans. The government guaranteed repayment should a company be unable to repay its foreign creditors. Additional loans were made available from domestic banks. In the late 1980s, the chaebol dominated the industrial sector and were especially prevalent in manufacturing, trading, and heavy industries.Also huyndai belongs to the same group

The tremendous growth that the chaebol experienced, beginning in the early 1960s, was closely tied to the expansion of South Korean exports. Growth resulted from the production of a diversity of goods rather than just one or two products. Innovation and the willingness to develop new product lines were critical. In the 1950s and early 1960s, chaebol concentrated on wigs and textiles; by the mid-1970s and 1980s, heavy, defense, and chemical industries had become predominant. While these activities were important in the early 1990s, real growth was occurring in the electronics and high-technology industries. The chaebol also were responsible for turning the trade deficit in 1985 to a trade surplus in 1986. The current account balance, however, fell from more than US$14 billion in 1988 to US$5 billion in 1989.

The chaebol continued their explosive growth in export markets in the 1980s. By the late 1980s, the chaebol had become financially independent and secure-- thereby eliminating the need for further government-sponsored credit and assistance.

By the 1990s, South Korea was one of the largest NIEs, and boasted a standard of living comparable to industrialized countries. For the band, see 1990s (band). ... The term, originated by the Organization for Economic Cooperation and Development (OECD), describes nations of the Third World that have enjoyed rapid economic growth and can be described as middle-income countries. ...

President Kim Young-sam began to challenge the chaebol, but it was not until the Asian financial crisis in 1997 that the weaknesses of the system were widely understood. Of the 30 largest chaebol, 11 collapsed between July 1997 and June 1999. The chaebol were heavily invested in export-oriented manufacturing, neglecting the domestic market, and exposing the economy to any downturns in overseas markets. In competing with each other, they had built up unsustainable overcapacity—on the eve of the crisis South Korea, with a population only ranked at #26 in the world, had seven major automobile manufacturers. Kim Young-sam (b. ... The Asian financial crisis was a financial crisis that started in July 1997 in Thailand and affected currencies, stock markets, and other asset prices in several Asian countries, many considered East Asian Tigers. ... For the band, see 1997 (band). ... Manufacturing (from Latin manu factura, making by hand) is the use of tools and labor to make things for use or sale. ... “Car” and “Cars” redirect here. ...

Many of the chaebol had become severely indebted to finance their expansion, not only to state industrial banks, but to independent banks and their own financial services subsidiaries. In the aftermath of the crisis when they could not service their debt, banks could neither foreclose nor write off bad loans without themselves collapsing. The most spectacular example came in mid-1999 with the collapse of the Daewoo Group, which had some US$80 billion in unpaid debt. At the time, it was the largest corporate bankruptcy in history. This article is about the year. ... This article is about the chaebol Daewoo Group. ... USD redirects here. ... Notice of closure stuck on the door of a computer store the day after its parent company, Granville Technology Group Ltd, declared bankruptcy (strictly, put into administration—see text) in the United Kingdom. ...

Investigations also exposed widespread corruption in the chaebol, particularly fraudulent accounting and bribery. In the broadest sense, a fraud is a deception made for personal gain. ... It has been suggested that Accounting scholarship be merged into this article or section. ...

Reforms

Under President Kim Dae-jung, elected in the wake of the crisis, the government made several efforts to reform the economy. Kim Dae-jung (born December 3, 1925) is a South Korean politician. ...

• Instead of competing in every industry, the chaebol were pressured to focus on core businesses and spin off unrelated enterprises.
• The chaebol were to decentralize their management and encourage the hiring of professional managers.
• Accounting regulations were strengthened to limit the ability of chaebol to hide losses and debt at underperforming subsidiaries.
• A crackdown on antitrust laws and inheritance taxes would impede the ability of families to retain control over their chaebol.

Both Kim and his successor, Roh Moo-hyun, have had mixed success. The chaebol continue to dominate South Korea's economy. Hyundai and SK Group have been implicated in separate scandals involving both presidents. The examples and perspective in this article or section may not represent a worldwide view. ... This is a Korean name; the family name is Roh Roh Moo-hyun (IPA: ) (born September 1, 1946 in Gimhae, South Gyeongsang, South Korea) is the President of South Korea. ...

The Federation of Korean Industries, a consortium of chaebol, has taken a leading role in resisting changes.

Marriages within chaebols

(Korean) A diagram of marriages between chaebols

Families of large chaebols are closely connected with marriage chains interlinking each other. Image File history File links Download high-resolution version (1500x930, 728 KB)Based on Image:Hmd. ... Image File history File links Download high-resolution version (1500x930, 728 KB)Based on Image:Hmd. ... Wikipedia does not yet have an article with this exact name. ...

See also

• Economy of South Korea
• Family business
• Holding company
• List of Korea-related topics
• List of South Korean companies
• Vertical integration
• Cabal
• The Hongs
• Mega Corporation

Currency 1 South Korean Won (W) = 100 Jeon(Chŏn) (theoretical) Fiscal year Calendar year Trade organizations APEC, WTO and OECD Statistics [1] GDP ranking 10th by volume (at nominal) (2006); 11th by volume (at PPP) (2006); GDP (Nominal) $897. ... For other uses, see Family Business (disambiguation). ... A holding company is a company that owns part, all, or a majority of other companies outstanding stock. ... This is a list of Wikipedia articles on Korea-related people, places, things, and concepts. ... To meet Wikipedias quality standards, this article or section may require cleanup. ... It has been suggested that Vertical expansion be merged into this article or section. ... A cabal is a number of persons united in some close design, usually to promote their private views and interests in a church, state, or other community by intrigue. ... The Hongs (Chinese: 行) were major business houses in Hong Kong with significant influence on patterns of consumerism, trades, manufacturing and other key areas of the economy. ... Megacorporation is a term popularized by William Gibson derived from the combination of the prefix mega- with the word corporation. ...

Notes

References

This article contains material from the Library of Congress Country Studies, which are United States government publications in the public domain. The Country Studies are works published by the Federal Research Division of the Library of Congress ( USA), freely available for use by researchers. ... The U.S. Constitution, adopted in 1789 by a constitutional convention, sets down the basic framework of American government in its seven articles. ... The public domain comprises the body of all creative works and other knowledge—writing, artwork, music, science, inventions, and others—in which no person or organization has any proprietary interest. ...

• Beck, Peter M. "Are Korea's Chaebol Serious About Restructuring?" Presentation at the Korea 2000 conference, May 30, 2000. Korea Economic Institute of America

• "Unfinished Business," The Economist, April 17, 2003

• "Web site: South Korean conglomerates," The Economist, December 11, 1997

• Whitmore, Stuart and Nakarmi, Laxmi. "Guide to the Groups: The pecking order of the top 20 chaebol," Asiaweek, October 10, 1997.