Corruption in Jaebeols

South Korea has been known for being highly corrupted in countries among the developed economy (Shanmukha 2018: 13). It was after the Korea War where corruption in South Korea became a Jaebeol-led one. Whereas, previously corruption was more state-led, which involved monopoly of threats and corruptions (Oh 2017: 243). Corruption in South Korea after democratization became the biggest obstacle for actual democratic development. Professor Chang, defines Jaebeol groups as “large business enterprises that are composed of many corporations” (1988: 52). A majority of Jaebeol key positions are occupied by those close in family relationships, and many top managers are non-family professional career managers with alumni relationships (Chang: 1988: 52).

In Chief Kim, TQ Group could be seen as a Jaebeol that was passed down from Madam Jang’s father to his son-in law Park Hyun-Do who is currently the Chairman of the company. The main story line revolves around the accounting fraud and corruption that is happening within TQ Group.

In episode 9, we see Seo Yul discover evidence of money laundering in the financial documents he received, which he traces back to the accounting depart of TQ. However, the director of accounting denied all accusations, and even attempted to shred the evidence of such account. Several acts of dirty work are occurring among the higher-level executives and directors of the company. This portrays corruption occurring in TQ group as the accounts were under Executive Director Jo and Director Go’s names. “As long as leaders and employees of these organizations consider fraudulent acts as acceptable, frauds will continue” (Albrect 2010: 265).

Furthermore, just in one episode we can see several accounts of blackmailing occurring in TQ. As we have seen several instances of Seo Yul utilizing his henchman without hesitation to physically kidnap and threaten any office employee to confess. Shanmukha and colleagues explains that “it is in fact the norm and the part of culture where business have the right over the people and people are chasing the money from business” (2018:13). Yul does not hesitate to blackmail Executive Director Jo, with the documents he uncovered, into complying with his terms.

Albrecht and colleagues interpret that opportunities for fraud to occur in Jaebeol organizations include close family relationships, a lack of checks and balance, a weak financial structure, weak corporate governance, and lack of transparency to list a few (2010: 262). It’s evident that cases of corruption are prominent among the Jaebeols, however Korea is slowly working on curbing on these dishonorable practices.

Word Count: 413

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Discussion:

1. Do you think these corrupt acts and blackmailing in Chief Kim are realistic? Is it just for the purpose of dramatic effect?

2. What measures should be taken to stop corruption among Jaebeols?

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Bibliography

Albrecht, Chad, Chad Turnbull, Yingying Zhang, and Christopher J. Skousen. “The Relationship Between South Korean Chaebols and Fraud.” Management Research Review. Vol. 33, no. 3 (2010): 257-268.

Chang, Chan Sup. “Chaebol: The South Korean Conglomerates.” Business Horizons (1988): 51-57.

Oh, Ingyu. “From Credible Threats to Credible Commitments? The Changing Face of South Korean Corruption.” The Changing Face of Corruption in the Asia Pacific. (2017): 243-250.

Shanmukha, Nath Malepati and Kaewmanee Kasidid. “South Korea Corruptions in the Context of Chaebols and Crony Capitalism.” International Journal of Advance Research and Development. Vol 3. Issue 1 (2018): 12-18.

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