My latest column for Seoul Magazine’s April 2012 issue discussed the FELO phenomenon. Here are some additional insights by Dr. Frithjof Arp of FELOResearch.info:
The acronym assigned by researchers to that specific sub-set of non-Koreans in Korea is Foreign Executives in Local Organizations (FELOs). In contrast to the large number of classic expatriate managers posted to Korea by foreign multinationals, the rare breed of FELOs work in the headquarters of Korean companies. That is, they have not been hired for overseas subsidiaries of Korean companies but for top management positions in Korea. Other classifications used by academia include SIEs (self-initiated expatriates) to describe the many foreigners who, for example, teach English in foreign countries or work as foreign professors. In addition, there are a large number of migrant laborers from elsewhere in Asia who work in Korean factories.
Some foreign executives recently hired by Korean companies come from significant cultural distance. Learning more about the FELO phenomenon is a key step in understanding the crucial roles FELOs can play in helping Korea continue its economic miracle. For cross-cultural management researchers, successful long-term FELO cases are of particular interest as they help explain how cultural distance in workplaces can be bridged.
Part of the FELO phenomenon is that these foreign executives make decisions and supervise Korean colleagues. At the same time, they have to report to Korean shareholders, chairpersons and owner-families. They have to demonstrate their loyalty to Korean interests, whereas classic expatriates represent the interests of foreign headquartered companies. Hence, FELOs are typically exposed to significant scrutiny from Korean colleagues, shareholders and the public. In contrast, foreign employees working for Korean companies in overseas branch offices or subsidiaries work within their home-country environment, do not usually manage and supervise Koreans, and are not as exposed to Korean domestic scrutiny as FELOs are. FELOs in Korea have to bridge the East-West cultural divide on a daily basis.
While Koreans with non-Korean passports who return to Korea are not perceived as outsiders for very long, FELOs have to work hard on gaining some level of insider status. Research has shown that some of them do, and that their unique ‘in/out group’-status can be leveraged to the advantage of the companies that they work for. Four different types of FELOs with distinct career-paths and socio-biographical backgrounds have been found, and three different types of local organisations appointing them. Studying the various business strategies underlying FELO appointments helps explain which combinations become successful and which others are likely to fail. Research of FELO cases across Asia identifies why these foreign executives are appointed and what they contribute to their local employers.
For further research, please refer to the following links and information:
- FELO Research (including cases in Korea)
- Korea Joongang Daily, “Foreign executives finding place in Korea” – October 20, 2009
- The Korea Times, “10% of listed firms hire foreign executives in 2011” – January 31, 2012
- Interview with Korean FELO Dr. Linda Myers at SK Group
- Interview with Korean FELO Didier Chenneveau at LG Electronics
- Interview with Korean FELO Dr. David Dolinger at Seegene, Inc.
- Korea Listed Companies Association (Report (in Korean) on the status of foreign executives in Korean listed companies)