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Article
Publication date: 18 August 2021

Hyoung Joo Lim and Dafydd Mali

Human capital is considered by many to be a firm's most important asset. However, because no international human capital reporting framework exists, firms can decide to…

Abstract

Purpose

Human capital is considered by many to be a firm's most important asset. However, because no international human capital reporting framework exists, firms can decide to include/exclude human capital details on annual reports. Based on legitimacy theory, firms that disclose high levels of human capital information can be considered congruent with the expectations of society. However, firms can also choose to include human capital information on annual reports for symbolic purposes as an image management strategy.

Design/methodology/approach

Using 2018 as a sample period, content analysis is used to evaluate the annual reports of the 25 largest British and 25 largest Korean firms to demonstrate the propensity of British/Korean firms to disclose human capital information as numerical and textual data.

Findings

The authors report that South Korean firms provide high levels of human capital information using narrative and numerical data, including value added human capital elements included on integrated reports. British firms on the other hand tend to use primarily positive narrative and limited numerical human capital data to present human capital information.

Originality/value

The results imply South Korean firms provide robust human capital information on annual reports as a legitimacy strategy. On the other hand, the UK's human capital reporting requirement can be considered as a form of image management. The results therefore have important policy implications for legislators, labour unions and firm stakeholders with incentives to enhance human capital information transparency.

Details

Journal of Intellectual Capital, vol. 23 no. 6
Type: Research Article
ISSN: 1469-1930

Keywords

Article
Publication date: 1 January 1999

Ernest H. Hall and Jooh Lee

The relationship between diversification and organizational performance has been the subject of numerous studies over the years (Palepu, 1985; Rumelt, 1974). However…

Abstract

The relationship between diversification and organizational performance has been the subject of numerous studies over the years (Palepu, 1985; Rumelt, 1974). However, strategy scholars have universally defined diversification using a narrow definition, namely that corporate diversification is a function or reflection of the number of products/businesses in a firm's portfolio. The present study argues that such a definition has become outdated given the impact of international market diversification (Kim, Hwang, & Burgers, 1989; Rugman, 1979). Integrating these two views of corporate diversification, we investigate diversification‐performance differences using market‐ and product‐based measures of diversification and an international sample. Results suggest that the traditional model of diversification may not be applicable to all countries and that international differences exist.

Details

The International Journal of Organizational Analysis, vol. 7 no. 1
Type: Research Article
ISSN: 1055-3185

Article
Publication date: 26 September 2020

Taeyeon Kim, Hongbok Lee, Kwangwoo Park and Doug Waggle

The authors present the results of a survey on how Korean firms evaluate new projects and estimate their capital costs. The authors report how Korean firms’ capital…

Abstract

Purpose

The authors present the results of a survey on how Korean firms evaluate new projects and estimate their capital costs. The authors report how Korean firms’ capital budgeting practices compare to other developed countries and to best practices in the field of finance.

Design/methodology/approach

The authors survey CFOs of major Korean firms on their capital budgeting practices. The authors then compare the results against the US and European firms and best practices of leading firms and financial advisors.

Findings

The authors find that the capital budgeting practices of Korean firms are as strong as or stronger than firms in developed markets. A majority of Korean firms use best practices techniques such as NPV, IRR and the CAPM for project evaluation and cost of equity estimation. Chaebol affiliation results in somewhat stronger capital budgeting practices. The authors also find that other factors, such as company size, leverage, CEO age and CEO education, impact capital budgeting practices.

Originality/value

This paper is the first article that comprehensively examines Korean firms' capital budgeting practices.

Details

Managerial Finance, vol. 47 no. 2
Type: Research Article
ISSN: 0307-4358

Keywords

Article
Publication date: 6 February 2017

B. Brian Lee, Haeyoung Shin, William Vetter and Dong Wuk Kim

Charting the earnings numbers reported by Korean firms produces a bell curve, but for a sharp discontinuity in the area surrounding zero. The purpose of this paper is to…

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Abstract

Purpose

Charting the earnings numbers reported by Korean firms produces a bell curve, but for a sharp discontinuity in the area surrounding zero. The purpose of this paper is to investigate if and how a large segment of Korean managers might manage accounting numbers to produce the observed result.

Design/methodology/approach

This study adopts an empirical research method using Korean listed firms as a sample. The primary focus of investigation is on major income statement variables that might produce the observed results in earnings from operations and net income.

Findings

Managers of Korean firms opportunistically use almost all income statement variables to influence earnings numbers. They manage revenues and selling, general & administrative expenses to report small positive earnings from operations, but manage non-operating gains (losses) to report small positive net income.

Research limitations/implications

This paper does not answer several questions related to loss avoidance. First, the paper did not examine which actions, such as discretionary accruals, opportunistic business decisions, or bogus transactions, were employed to affect line items on the income statement. Second, the paper did not investigate what specific incentives trigger Korean managers to report small positive earnings. Korean firms have traditionally raised capital by borrowing funds from creditors and governmental agencies. Thus, they may be concerned that reporting losses would reduce their borrowing capacity. Finally, corporate governance, such as CEO tenure and option grants may influence the extent of earnings management to avoid losses, but most corporate governance data for Korean companies must be manually collected. Accordingly, these subjects are left for future studies as well.

Originality/value

This study contributes to accounting literature by reporting how managers of Korean firms artificially coordinate major income statement variables and report small positive earnings figures, noting the differences between earnings management investigating methodology and ones used in previous studies.

Details

Asian Review of Accounting, vol. 25 no. 1
Type: Research Article
ISSN: 1321-7348

Keywords

Article
Publication date: 1 February 2002

Choong Y. Lee

The purpose of this study is to compare and contrast manufacturing strategies and practices, and its impact on business performance between Korean and Japanese firms in…

Abstract

The purpose of this study is to compare and contrast manufacturing strategies and practices, and its impact on business performance between Korean and Japanese firms in the electronics industry. It is based on the premise that: (1) manufacturing strategies and practices differ significantly between these two countries; and (2) these differences significantly impact firm's manufacturing operations and business performance. The focus of the study is to explore the differences that may exist between Japanese and Korean firms in manufacturing strategies and business practices by analyzing survey results of electronics firms from both countries. Differences between Japanese and Korean firms are investigated in several respects.

Details

International Journal of Commerce and Management, vol. 12 no. 2
Type: Research Article
ISSN: 1056-9219

Article
Publication date: 4 March 2019

Yoonsung Nam, Tae-Joong Kim and Wonyong Choi

The purpose of this paper is to investigate the moderating effect of international trade on outside director system in Korean firms. The authors expected that Korean firms

Abstract

Purpose

The purpose of this paper is to investigate the moderating effect of international trade on outside director system in Korean firms. The authors expected that Korean firms highly depending on international trade would mitigate the resource provision function of outside director system in order to reduce information asymmetry among global business partners. In addition, the authors tried to find out the functions of outside director system: the control function based on agency theory and resource provision function based on resource dependence theory.

Design/methodology/approach

The authors tested the hypotheses by Poisson regression with 2011 and 2002 Korean-listed manufacturing firms. The dependent variable is the number of excessively appointed outside directors and independent variable is CEO type: family CEO or professional CEO. The moderating variable is the dependency on international trade measured by export proportion out of total sales.

Findings

The authors found that not control but resource provision function was a main role of outside director system in Korean firms. The authors also found negative moderating effect of dependency on international trade, which means that firms highly depending on global market tended to consider outside director system as control function, namely “global standard.”

Originality/value

This paper is the leading study that tries to analyze empirically the relationship between international trade and the function of governance mechanism; outside director system in Korean firms. It also confirms that Korean firms adopted outside director system on the basis of the resource dependence theory.

Article
Publication date: 8 January 2018

Hongbok Lee and Kwangwoo Park

The purpose of this paper is to provide a survey of recent studies on Korean firms’ financial policies and their interactions with financial markets, and suggest…

1554

Abstract

Purpose

The purpose of this paper is to provide a survey of recent studies on Korean firms’ financial policies and their interactions with financial markets, and suggest directions for future research.

Design/methodology/approach

The authors review the finance research on Korean firms and markets, focusing on the articles published in the last 20 years.

Findings

This survey of the recent Korean finance literature covers the research on the capital structure and the distinct financing behaviors of chaebol-affiliated firms and independent firms; the factors affecting the costs of capital and firms’ preferences for capital budgeting methods; raising capital through public and private equity issuance; corporate governance and the market for corporate control; payout policies; and bank-firm relationship. The authors suggest a number of future research directions that may lead to significant contributions to the literature.

Originality/value

This paper provides the first comprehensive review of the post-crisis corporate finance literature in Korea.

Details

Managerial Finance, vol. 44 no. 1
Type: Research Article
ISSN: 0307-4358

Keywords

Article
Publication date: 1 January 1992

Choong Y. Lee

After four consecutive years′ trade surplus, Korea′s climbingforeign trade deficit in 1990 is a clear signal that the nation shouldattempt to improve the performance of…

Abstract

After four consecutive years′ trade surplus, Korea′s climbing foreign trade deficit in 1990 is a clear signal that the nation should attempt to improve the performance of its manufacturing industry. However, there has not been much study on how manufacturing management is conducted in Korea and how it might be improved. Too much emphasis has been placed on macro policy variables such as tax, exchange rates and interest rates, which have only short‐term effects on competitiveness. The task for Korean manufacturing industry is to meet the challenges before it and be in a position to compete with other countries by providing high‐quality products at the right price. The most affordable and practical alternative is to make innovations in the current manufacturing process in order to enhance productivity and competitiveness. Studies the adoption and application of Japanese manufacturing management techniques under Korean conditions. Also provides a number of cases of their implementation in Korea and outlines considerations and recommendations necessary for their successful implementation based on the study findings.

Details

International Journal of Operations & Production Management, vol. 12 no. 1
Type: Research Article
ISSN: 0144-3577

Keywords

Article
Publication date: 1 January 2003

Jooh Lee, Ernest H. Hall and Matthew W. Rutherford

This paper examines the relationship between international diversification and performance by matching a sample of 400 U.S. and 400 Korean firms on industry type and…

Abstract

This paper examines the relationship between international diversification and performance by matching a sample of 400 U.S. and 400 Korean firms on industry type and testing the relationship over five years (1992–1996). Results indicate that U.S. firms show a positive association with regard to international diversification and performance, but a negative relationship between product diversification and performance. Korean firms, however, show a positive association with both types of diversification. In addition, Korean firms' strategies were associated more with sales‐based measures, while U.S. firms were associated more closely with profit‐based measures. These results suggest that the two countries do not approach diversification in the same way.

Details

International Journal of Commerce and Management, vol. 13 no. 1
Type: Research Article
ISSN: 1056-9219

Article
Publication date: 1 December 2006

Pairin Katerattanakul, Soongoo Hong and Jinyoul Lee

To report a recently completed study on enterprise resource planning (ERP) implementation in Korean manufacturing firms.Design/methodology/approach – An online survey was…

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Abstract

Purpose

To report a recently completed study on enterprise resource planning (ERP) implementation in Korean manufacturing firms.Design/methodology/approach – An online survey was conducted (with e‐mail invitation and telephone call reminder) to collect data from 306 Korean manufacturing firms.Findings – This study presents the issues related to ERP implementation in Korean manufacturing firms, including pre‐implementation activities, implementation experiences, ERP system configuration, benefits, and future direction. Additionally, the results are compared to those results from previous studies on US and Swedish manufacturing firms.Research limitations/implications – The study focused on one industry in one Asian country which perhaps limits the application of its generalized results to other industries or other Asian countries.Practical implications – The results of this study present and discuss both similarities and differences in ERP implementation issues among Korean, US, and Swedish manufacturing firms.Originality/value – This research is the first empirical study on the issues related to ERP implementation in manufacturing firms in the Asia/Pacific region. It is also the first study providing comparison results regarding ERP implementation in manufacturing firms in Asian, North American, and European countries.

Details

Management Research News, vol. 29 no. 12
Type: Research Article
ISSN: 0140-9174

Keywords

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