Traditionally, Korean leadership has been perceived as hierarchically authoritative, paternalistic,
nationalistic and as having group consciousness. Unlike western societies which promotes freedom
and human rights, Korean society has been dominated by values of obligation, duty and group
harmony. By focusing on the role of national leadership and Korean entrepreneurship, this paper
examines how the collectivist values have been incorporated into the national ideology, governance
principles as well as Korean management system. Park Chung Hee’s leadership and Korean chaebol
founders are the main subjects of discussion in this paper, since they have laid the foundations
of Korean industries as well as are well known for their collectivist characteristics. This study
shows that the collectivist values worked very well in the early industrialization process of Korea,
Korean industrial players were able to produce goods and services through relatively lower costs,
Korean economy entered into the stage of innovation-driven, the rigidity of the collectivist culture
began to undermine economic performance. In sum, collectivism worked well in the initial stages
of industrialization; however it has not guaranteed better innovation as what had been enjoyed in
western individualist cultures.
This paper examines the transformation of the Korean development model since the 1960s. The statedirected
capitalism that characterized the close liaison between government and business successfully
transformed Korea into an industrial powerhouse in the 1970s. Under the strong leadership of Park
Chung Hee, the Korean government picked industrial winners and promoted them with cheap capital
and protection to boost industrial productions and exports. This guided capitalism was very successful,
but the Korean government began to abandon the ideology and moved toward liberalism gradually since
1980s. Under the Chun Doo Hwan’s administration, the active role of the state in the economy was
reduced, allowing more freedom in the market. Then the government began to emphasize liberalizing
the economy for foreign goods, capital, and free operation of the market by minimizing government
control. After the 1997 financial crisis, promoting foreign direct investment into the country and signing
FTAs became important growth strategies for the Korean economy. It is believed that the neoliberalism
will continue to override the nation’s economic direction for welfare of the country.