ABSTRACT
This chapter explains Korea's industrial miracle since the 1960s by focusing on the dynamic inter-linkages in its economic system. It concerns the origins of chaebols and the history of these conglomerates. The chapter highlights the evolutionary dynamics of organizations such as chaebols and the impact of the 1997-98 crisis. It describes the main features of chaebols related to strategy, organizational structure, management, culture and value. The chapter reviews corporate governance issues specific to chaebols. It discusses structural changes and the evolution of corporate governance concerns in the aftermath of the Asian financial crisis. Korean companies' debt-to-equity ratios are persistently higher than in other advanced economies. Korea's bankruptcy regime was established as early as the 1960s. In Korea, the restructuring process was known as "composition" and "company reorganization". Until 1996, two systems were used by insolvent companies to continue their business: the Composition Act, which was rarely used, and the Company Reorganization Act, which was frequently used by insolvent companies.
