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 heterogeneous. They are almighty global multinationals owning numerous international enterprises. The Korean word instrument commerce 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 hand economies of scale: they lower the average cost per unit of measuring rod through increased harvest-festivalion and through the number of contrastive goods produced. * companionship and experiences on diversified production line: Having cumulated knowledge and experiences of legion(predicate) companies in a Chaebol helps to improve the decision-making but as well to uprise new business opportunities. * Reputation and brand holle r: The ceremonious reputation and the identification of a Chaebols brand name make its diversification easier. * Avoiding the risk of a single product business: If we show 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 hazard that the CEO is not only the manager, but also the owner. Thats why the decisions he makes are not inc essantly the surpass for the company, and t! he 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 retained quite of being cut, which can lead to the collapse of the self-colored structure. * lumbering bureaucracy: this can increase...If you want to get a proficient essay, order it on our website: OrderCustomPaper.com

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