Daewoo

Paper Summary:

This paper shows how Daewoo's rapid policy of expansionism into every area of business has ultimately led to their crippling debts. It identifies the problems in Daewoo's economic strategy as the company awaits liquidation. Finally, the paper offers an alternative solution to the one currently adopted by Daewoo and sets down an implementation plan in four steps.

From the Paper:

"In 1967, Daewoo began business as a small textile firm and in 1975 was given "chaebol" status by the Korean government (Kenzie, 1999, 4). A "chaebol" is the Korean equivalent of the horizontally and vertically integrated Japanese trading company known as the "keiretsu" (Hornik, 1997, 40). Chaebols have strong family control, authoritarian management, and centralized decision making. Chaebol dominate the Korean economy, growing out of the takeover of the Japanese monopoly of the Korean economy following World War II. ("Chaebol Economy at Stake.."1997, Online). The rapid growth of the chaebol was due to tax breaks and financial incentives that emphasized industrial reconstruction and exports (Lee, 1996, 118)."

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