• Asia-Pacific Journal of Business Venturing and Entrepreneurship
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• v.8 no.4
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• pp.95-109
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• 2013

The practices and processes of HRM (Human Resource Management) for university faculty in Korea depend heavily on assessment of research and teaching rather than the UIC (University-Industry Cooperation) performance. In this regard, HRM of Korean universities is said to be far distant from UIC. Although policy initiatives by the Korean government, notably the MoE (Ministry of Education) have implemented in most universities, the desirable level of UIC could not be achieved yet. Moreover, the very notion of 'university' in Korea is much more to do with 'pure' education and research institution than with 'applied' and 'vocational' purpose. Considering upon HRM practices and organizational culture, for enhancing UIC in Korea, the government's policy should be linked to alter deep-rooted university culture. So the aims of the research are to describe the current state of HRM in Korean and foreign universities; to find out the critical factors of UIC in Korean universities; to analyze the gaps between university research and industrial commercialization based on a conceptual framework, the 'valley of the death'; and to recommend HRM policies fostering UIC for the MoE. For achieving these objectives, we deploy multiple methodologies, namely, in-depth interview, literature survey, and statistical data analysis with regard to UIC. Analyzing the data we have collected, the present research sheds light on all aspects of HRM processes and UICs. And the main policy implication is restricted to the Korean universities, even if we have collected and analyzed foreign universities, notably universities in the USA. The research findings are mainly two folds. Firstly, the HRM practices among Korean universities are very similar due to the legally institutionalized framework and the government's regulations. Secondly, the difficulties of UIC can be explained by notion of the 'valley of death' ways in which both parties of university and industry are looking for different purposes and directions. In order to overcome the gap in the valley of death, the HRM policy is better to be considered as leverage. Finally, the policy recommendations are as follows. Firstly, various kinds of UIC programs are able to enhance the performances of not only UIC, but also education and research outcome. Secondly, fostering organizational climate and culture for UIC, employing various UIC programs, and hiring industry-experienced faculty are all very important for enhancing the high performance of university. We recommend the HRM policies fostering UIC by means of indirect way rather than funding directly for university. The HRM policy of indirect support is more likely to have long-term effectiveness while the government's direct intervention to UIC will have likely short-term effectiveness as the previous policy initiatives have shown. The MEST's policy means of indirect support might vary from financial incentives to the universities practicing HRM for UIC voluntarily, to information disclosure for UIC. The benefits of the present research can be found in suggesting HRM policy for UIC, highlighting the significance of industry-experienced faculty for UIC, and providing statistical analysis and evidences of UIC in Korean universities.

• Management & Information Systems Review
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• v.36 no.4
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• pp.21-32
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• 2017

Motivated by the recent cases of negligent social responsibility as manifested by foreign luxury fashion brands in Korea, this study investigates whether agency costs depend on the sustainability of different types of corporate governance. Agency costs refer either to vertical costs arising from the relationship between stockholders and managers, or to horizontal costs associated with the potential conflicts between majority and minority stockholders. The firms with luxury fashion brand could spend large sums of money on maintenance of magnificent brand image, thereby increasing the agency cost. On the contrary, the firms may hold down wasteful spending to report a gaudily financial achievement. This results in mitigation of the agency cost. Agency costs are measured by the value of the principal component. First, three ratios are constructed: asset turnover, operating expense to sales, and earnings before interest, tax, and depreciation. Then, the scores of each of these ratios for individual firms in the sample are differenced from the ratios for the benchmark firm of S-OIL. S-OIL was designated as the best superior governance model firm for 2013 by CGS. We perform regression analysis of each agency cost index, luxury fashion brand dummy and a set of control variables. The regression results indicate that the agency costs of the firms with luxury fashion brand exceed those of control group in the fashion industry in the part of operating expenses, but the agency cost falls short of those of control group in the part of EBITD, thus the aggregate agency costs are not differential of those of the control group. In sensitivity test, the results are same that the agency cost of the firms are higher than those of the matching control group with PSM(propensity matching method). These results are corroborated by an additional analysis comparing the group of the companies with the best brands with the control group. The results raise doubts about the effectiveness of management of the firms with luxury fashion brand. This study has a limitation that the research has performed only for 2013 and this paper suggests that there is room for improvement in the current research methodology.

• Management & Information Systems Review
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• v.33 no.3
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• pp.167-187
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• 2014

While Korean GAAP had detailed regulations for the measurement and disclosure of operating income in the past, K-IFRS did not provide specific rules for operating income until 2011. Some firms that adopted K-IFRS before 2011 did not disclose or calculated operating income in an inconsistent manner although operating income is usually considered as one of the core information items to assess firm valuation. Inconsistency in firms' treatment of operating income invoked much criticism from diverse users of financial statement. The Korean Accounting Institute (KAI hereafter) revised the K-IFRS rules relevant to operating income in September 2010 in response to the voices raised by the business community, whereby the operating income number is allowed to be calculated in conformity with the previous K-GAAP. This study was motivated by the revision of K-IFRS and aims to provide a clue on the validity of such policy decision. To achieve the research objective, we test the relative value relevance of the alternative operating income numbers under K-IFRS versus K-GAAP. Our main findings are as follows. The value relevance of operating income reported before K-IFRS is proved to be higher than after K-IFRS. K-IFRS operating income adjusted to the previous K-GAAP has greater explanatory power for market values relative to one calculated under the K-IFRS regime. In an additional analysis, the sample was decomposed according to whether the operating income under K-IFRS is greater than under K-GAAP. The difference in the value relevance of K-IFRS versus K-GAAP operating income is significant only in the subsample consisting of firms which reports higher operating income under K-IFRS compared to K-GAAP. Also, the firms which would have reported negative operating income on a consecutive basis are more likely to have chosen K-IFRS, resulting in higher numbers than otherwise. It is likely that firms facing the threat of delisting due to consecutive operating loss reporting are more likely to have adopted K-IFRS disclosure rules by which they could report higher operating income numbers. To sum up, these results corroborate the limitation inherent in the K-IFRS regarding operating income disclosures. This paper suggests that the recent revision of K-IFRS implemented by KAI is likely to mitigate some of afore-mentioned limitations effectively.

• Journal of the Korea Academia-Industrial cooperation Society
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• v.12 no.7
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• pp.3062-3071
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• 2011

This study proposed to compare the performance differences between a manufacturing company and a construction company in accordance with the mutual relations and ownership structures with the management performance based on the increase or decrease of the large shareholders' share-holding ratio (insider ownership, foreign share-holding, institutional investors' share-holding) of a KOSPI listed company in Korea during 10 years(1998-2007). To sum up the research work, first, the increase of foreign share-holding supported the results of previous studies which foreign share-holding has a positive effect on the long term performance by having a positive(+) effect on MTB, and the increase of an insider ownership supported the management entrenchment hypothesis of previous studies by having a negative(-) effect on MTB. However, relations between institutional investors's share-holding and MTB could not find out linkages in spite of the results of previous studies where dealt with the active monitoring hypothesis. Also, to examine the linkages of ROA and the ownership structure, though the increases of foreign share-holding and insider ownership had a positive(+) effect on ROA, the increases of institutional investors' share-holding had a negative(-) effect on it. It showed different analysis results from the active monitoring hypothesis of institutional investors. As a result of verifying whether there is "any difference in the management performances between the construction industry and the manufacturing industry according to the equity structure" which is the second hypothesis, nothing of the insider ownership and whether or not there is the construction industry, foreign share-holding and whether or not there is the construction, and the institutional ownership and whether or not there is the construction industry gave a statistical difference to MTB and ROA. Accordingly, it was possible to find out there is no difference in the management performance between the construction industry and the manufacturing industry based on the ownership structure in spite of different characteristics from the manufacturing industry such as the revenue recognition in ordering, production and accounting.

• International Area Studies Review
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• v.22 no.4
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• pp.55-75
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• 2018

In China, different from the private enterprises or the locally-administered state enterprises, central state-owned enterprises generally spread over cornerstone industry which is greatly influenced by the public policy, which results in the objective existence of government influence in their productive activities. As the strategic resource, listed companies controlled by central state-owned enterprises, mostly distributed in the lifeblood and security of key industries. Therefore, listed companies controlled by central state-owned enterprises' governance efficiency play an important role in optimal allocation of state-owned assets, improve capital operation, improve the return on capital, and maintain state-owned assets safety. As the immune systems of national governance, the government audit strengthen the supervision of listed companies controlled by central state-owned enterprises in case of the loss of state-owned assets and significant risk events occur, to ensure that the value of state-owned assets. As an important component of national governance, government audit produced in entrusted with the economic responsibility of public relationship. Government audit can play an important role in maintaining financial security and corruption, and also improve listed company's accounting stability and transparency. While government audit can improve governance efficiency and maintain state-owned assets safety, present literature is scarce. Under the corporate governance theory and the economical responsibility theory, the thesis select data from 2010-2017 to verify the relationship between government audit and listed companies controlled by central state-owned enterprises' corporate performance. Results show that listed companies controlled by central state-owned enterprises are more likely to be audited by government of poor performance. Results also show that the government audit will have a promoting effect on listed companies controlled by central state-owned enterprises, and through to the improvement of the governance efficiency will enhance its companies' value. The results show that China's government audit has appealing role in accomplishing central state-owned enterprises to realize the business objectives and in promoting the governance efficiency.

• Korean small business review
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• v.42 no.2
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• pp.69-92
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• 2020

This study is aimed at the growth and development of family businesses that greatly contribute to Korea's economic development, but the specific research purpose is to firstly examine the research trends and current status of Korean family businesses and compare them with those of developed countries such as the United States. Second, I would like to look at the future research for revitalizing Korean family business research. In addition, we intend to contribute to increasing the interest in this field and the number of researchers involved. The research target of this paper is 212 papers published in professional academic journals for 13 years from 2006 to 2018 when family businesses began to be fully researched in Korea, 112 master's and doctoral dissertations (graduate schools), and 324 totals. As a result of empirical analysis, the number of published papers is increasing more than the initial ones, but it has been on the decline recently. In addition, 57.5% of the journals are papers that do not have specific definitions or simply list the claims of several scholars by analyzing content. Thesis was 33.9%. As for the type of research, qualitative research, which is a conceptual research, is a small number, and empirical research occupies most of the research topics. Research topics and academic dissertations also have a large proportion of management, management strategy, succession, financial accounting, and business performance. In other words, it can be said that the research on family business in Korea corresponds to the early childhood of the United States. First of all, in the future, we need to put more effort into increasing the qualitative research, starting with the definition of a family business, which is an essential problem, in addition to the theory building of family business. Second, as an analysis level of research, we should make family an important level of analysis for existing individuals, groups, and organizations. Third, the research subject and research area should be expanded. It is desperately necessary to study large companies including chaebols, mainly from small and medium-sized companies, which are the existing research areas of family business. In addition, it is considered that it is necessary to appropriately introduce various theories suitable for the interdisciplinary study, which is the characteristic of the family business, for example, theories of family science, psychology, and sociology. Fourth, it should build the research infrastructure.

• Korean small business review
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• v.31 no.2
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• pp.85-102
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• 2009

With the continued globalization of world markets, transfer pricing has become one of the dominant sources of controversy in international taxation. Transfer pricing is the process by which a multinational corporation calculates a price for goods and services that are transferred to affiliated entities. Consider a Korean electronic enterprise that buys supplies from its own subsidiary located in China. How much the Korean parent company pays its subsidiary will determine how much profit the Chinese unit reports in local taxes. If the parent company pays above normal market prices, it may appear to have a poor profit, even if the group as a whole shows a respectable profit margin. In this way, transfer prices impact the taxable income reported in each country in which the multinational enterprise operates. It's importance lies in that around 60% of international trade involves transactions between two related parts of multinationals, according to the OECD. Multinational enterprises (hereafter MEs) exert much effort into utilizing organizational advantages to make global investments. MEs wish to minimize their tax burden. So MEs spend a fortune on economists and accountants to justify transfer prices that suit their tax needs. On the contrary, local governments are not prepared to cope with MEs' powerful financial instruments. Tax authorities in each country wish to ensure that the tax base of any ME is divided fairly. Thus, both tax authorities and MEs have a vested interest in the way in which a transfer price is determined, and this is why MEs' international transfer prices are at the center of disputes concerned with taxation. Transfer pricing issues and practices are sometimes difficult to control for regulators because the tax administration does not have enough staffs with the knowledge and resources necessary to understand them. The authors examine transfer pricing practices to provide relevant resources useful in designing tax incentives and regulation schemes for policy makers. This study focuses on identifying the relevant business and environmental factors that could influence the international transfer pricing of MEs. In this perspective, we empirically investigate how the management perception of related variables influences their choice of international transfer pricing methods. We believe that this research is particularly useful in the design of tax policy. Because it can concentrate on a few selected factors in consideration of the limited budget of the tax administration with assistance of this research. Data is composed of questionnaire responses from foreign firms in Korea with investment balances exceeding one million dollars in the end of 2004. We mailed questionnaires to 861 managers in charge of the accounting departments of each company, resulting in 121 valid responses. Seventy six percent of the sample firms are classified as small and medium sized enterprises with assets below 100 billion Korean won. Reviewing transfer pricing methods, cost-based transfer pricing is most popular showing that 60 firms have adopted it. The market-based method is used by 31 firms, and 13 firms have reported the resale-pricing method. Regarding the nationalities of foreign investors, the Japanese and the Americans constitute most of the sample. Logistic regressions have been performed for statistical analysis. The dependent variable is binary in that whether the method of international transfer pricing is a market-based method or a cost-based method. This type of binary classification is founded on the belief that the market-based method is evaluated as the relatively objective way of pricing compared with the cost-based methods. Cost-based pricing is assumed to give mangers flexibility in transfer pricing decisions. Therefore, local regulatory agencies are thought to prefer market-based pricing over cost-based pricing. Independent variables are composed of eight factors such as corporate tax rate, tariffs, relations with local tax authorities, tax audit, equity ratios of local investors, volume of internal trade, sales volume, and product life cycle. The first four variables are included in the model because taxation lies in the center of transfer pricing disputes. So identifying the impact of these variables in Korean business environments is much needed. Equity ratio is included to represent the interest of local partners. Volume of internal trade was sometimes employed in previous research to check the pricing behavior of managers, so we have followed these footsteps in this paper. Product life cycle is used as a surrogate of competition in local markets. Control variables are firm size and nationality of foreign investors. Firm size is controlled using dummy variables in that whether or not the specific firm is small and medium sized. This is because some researchers report that big firms show different behaviors compared with small and medium sized firms in transfer pricing. The other control variable is also expressed in dummy variable showing if the entrepreneur is the American or not. That's because some prior studies conclude that the American management style is different in that they limit branch manger's freedom of decision. Reviewing the statistical results, we have found that managers prefer the cost-based method over the market-based method as the importance of corporate taxes and tariffs increase. This result means that managers need flexibility to lessen the tax burden when they feel taxes are important. They also prefer the cost-based method as the product life cycle matures, which means that they support subsidiaries in local market competition using cost-based transfer pricing. On the contrary, as the relationship with local tax authorities becomes more important, managers prefer the market-based method. That is because market-based pricing is a better way to maintain good relations with the tax officials. Other variables like tax audit, volume of internal transactions, sales volume, and local equity ratio have shown only insignificant influence. Additionally, we have replaced two tax variables(corporate taxes and tariffs) with the data showing top marginal tax rate and mean tariff rates of each country, and have performed another regression to find if we could get different results compared with the former one. As a consequence, we have found something different on the part of mean tariffs, that shows only an insignificant influence on the dependent variable. We guess that each company in the sample pays tariffs with a specific rate applied only for one's own company, which could be located far from mean tariff rates. Therefore we have concluded we need a more detailed data that shows the tariffs of each company if we want to check the role of this variable. Considering that the present paper has heavily relied on questionnaires, an effort to build a reliable data base is needed for enhancing the research reliability.