[ Society > Labor File ]

t was the best of times and the worst of times for foreign companies to invest in Korea. In the late 1980s the dream of government planners to turn Korea into an economic powerhouse was becoming a reality, and industrialists both Korean and foreign were eager to find ways to cash in on the boom.
  At the same time, worker frustrations, long suppressed by anti-union legislation and pent-up against the strictures of the military dictatorships of the time, were unleashed by the removal of the ban on strikes in 1988. The result was a spate of labor unrest from which foreign invested companies were not immune including a wholly owned subsidiary of Shinko Electronic Industries.
  The Japanese multinational established Korea Shinko Microelectronics Co., Ltd. in December of 1987 to manufacture security terminals for cellular phones and computers. While cultural differences between Japanese management and their Korean employees fueled tension in the atmosphere of the times, the signs of danger went unheeded in the belief that they would simply disappear. They didn¡¯t.

  TARGETING WOMEN WORKERS Tensions continued to mount, productivity fell, and the defect rate soared, plunging Korea Shinko into years of deficits.
  The dire straits faced by the company compelled both labor and management to find common ground by each party putting itself in the other¡¯s shoes. A solution to the years of conflict emerged when initiatives were put in place that considered the needs of the company¡¯s female workers who constituted a large percentage of the workforce.
  To begin with, the management instituted a personnel system free of gender-based discrimination. It also improved workers¡¯ existing welfare facilities and established a fund to support their children¡¯s education, a significant cost burden for many Korean households. A profitsharing scheme was also instituted to directly reward effort. The result was a sea change in morale at the workplace, with employees becoming infused with a vitality and spirit that suggested, in the words of one observer, as if they were the owners of the company.

  DEFICITS OVERCOME The new labor/management cooperation at Shinko produced amazing results. Despite the worst business conditions in the country¡¯s history occasioned by the financial crisis of 1997/98, the company managed to emerge from a decade of deficits and produced a surplus in 1999. This was made possible by employees voluntarily working extra time and pledging to improve productivity and reduce defective products.
  Thus, by making efforts to understand each other¡¯s needs and make concessions, both parties enjoyed gains from their common endeavors and in place of strife and distrust created a remarkably successful model of industrial relations.