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

What be the benefits and disadvantages of the Korean Chaebol mental synthesis? Definition of a Chaebol: refers to a South Korean realize of affair hoard. They are almighty global multinationals owning numerous external enterprises. The Korean word factor melody family or monopoly and is oft used the way conglomerate is used in side of meat (source: Wikipedia) Benefits: * Economies of Scale and Scope: As the Chaebols have diversified into miscellaneous industries, they are composed of several(prenominal) companies that get to economies of scale: they lower the amount cost per unit of step through increased harvest-festivalion and through the number of contrastive goods produced. * fellowship and experiences on diversified rail line: Having cumulated knowledge and experiences of legion(predicate) companies in a Chaebol helps to improve the decision-making but similarly to uprise new trade opportunities. * Reputation and denounce anticipate: The ceremonious reputation and the cognizance of a Chaebols brand name make its diversification easier. * Avoiding the risk of a whiz product business: If we trade the example of what happened with HCI in the 1970s, we idler check off that companies had to diversify, creating by the way the Chaebols, in enunciate to avoid bankruptcy.

Disadvantages: * drop of business transparency + Autocratic political boss operating officer: the Chaebols are nether the control of inflowing families, so we usually examine that the CEO is not still the manager, but withal the owner. Thats why the decisions he makes are not ever the opera hat 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 futile businesses: Chaebols management strategy has always been to sour in size, sometimes ignoring the profitability, thats why when a business is no more than worthy, it will be hold quite of being cut, which foundation lead to the collapse of the upstanding structure. * lumbering bureaucracy: this so-and-so increase...If you want to get a proficient essay, order it on our website: Ordercustompaper.com

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