Chaebols, government policies and their impact on the spatial dynamics of industry and labour : the case of Samsung Group

Abstract

This thesis identifies the mechanisms governing the spatial changes in Korea's industry and labour markets by focusing upon the emergence of the country's large conglomerate business organisations (chaebols). As the country has distinctive industrial organisations, production systems, labour processes and governmentbusiness relations, this study discusses the relevance of existing models to the Korean situation. It perceives the Korean economy as a system within which 'spaceorganising', large business organisations interact over time with government, smaller firms and multinational corporations at different geographical scales. The usefulness of this approach is assessed using a case study of Korea's most representative chaebol, the Samsung Group. This study identifies chaebols as the dominant institutions in Korean society. Their growth and business strategies have been controlled by the Korean Government through its power to allocate capital resources. Regional dynamics of industry and labour, therefore, have been strongly influenced by changes in the location, industrial structure, production system and labour process of chaebols. With economic power concentrated within a few giant business groups and their major areas of operation restricted, unbalanced regional development has resulted. Dissatisfaction from residents in less-developed areas has pressured the Government to advise chaebols to disperse their production facilities. Most small and medium-sized firms are closely linked to large corporations through subcontracting. By forming hierarchical subcontracting systems, chaebols have indirectly exploited scattered, part-time, home-based, female and lower-paid labourers organised by subcontractors. Further, chaebols have expanded their business arena to encompass overseas locations in a bid to overcome the problem of a small domestic market, trade regulations and increased labour costs. Through their international business networks Korea's local and regional economies are integrated into the world economy. Indeed, the identification of the changing relationships of chaebols with both the Korean Government and smaller firms is the key to explaining the nation's spatial dynamics of industry and labour. Show more