(LEAD) (Yonhap Interview) Feelux's Chinese affiliate chief opens up about localization

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By Chung Joo-won

WEIHAI, China, June 2 (Yonhap) -- For many existing and prospective South Korean companies with global operations, true localization in China has been an ambition that many crave but few have achieved. Only after management remains rocky will companies admit that "cultural difference" is to blame.

Yet this cultural gap is solvable, whether it is between Korean companies and relevant local Chinese governments or between Korean companies and their Chinese employees, according to Hong Song-lin, the general manager of the Shandong operation of electric parts and lighting maker Feelux Optoelectron IC Co., Ltd. The South Korean mother company Feelux holds a 100 percent stake of Feelux Optoelectron.

"Like many other South Korean manufacturers in China, (Feelux) landed in China for low labor costs, as a joint company with a Chinese company," said the Feelux Optoelectron's Chinese chief with an ethnic Korean background during an interview with Yonhap News Agency in his office on Wednesday.

"In many cases, South Korean companies operating in China and the Chinese local government fail to meet each other's requests in doing business," Hong said. "We try to only take the competitive parts from both cultures and apply them to the management. This is where Feelux Optoelectron has its greatest strength."

The Shandong operation of Feelux Optoelectron was launched in 1997, five years after Feelux started business in China. In the two decades since the launch, the annual sales volume of the Shandong operation jumped about a hundredfold, from US$500,000 to $50 million.

South Korean firms are faced with many cultural differences in China, such as the corporate culture, the language barrier, the social culture and even the food culture, according to Hong.

"Looking back, things went easier for South Korean companies here when the Chinese economic and social circumstances remained relatively stable. But in the past five or six years, China has undergone significant changes in its labor law, labor costs and manpower supply," Hong said.

Now China is seeking to upgrade its own manufacturing and toll processing industry, driving already thriving companies in the field to move their operations to underdeveloped areas in the inner parts of China, Hong said. In late December 2015, Feelux Optoelectron Shandong moved its facilities from downtown Weihai to its sub-city of Rongcheng.

"This new drive by China has posed new challenges to South Korean firms here, because they have still been struggling to settle in major cities like Yantai, Chengdu and Weihai. For them, continuing operations in the inner regions is even more difficult."

Bilingual in Chinese and Korean, Hong switched workplaces from the Chinese state-controlled firm Beiyang Electric to the South Korean private company Feelux Optoelectron, which earned him experience and know-how about South Korean companies' localization in China.

"South Korean culture has the unrivaled eagerness for business output and performance that Chinese corporate culture lacks. We also try to remind the workers to prioritize corporate profit, since they will benefit more from a successful company than a struggling one."

A "company profit first" policy is a difficult concept for Chinese workers, according to Hong who hails from Jilin Province, northeastern China.

"Back when I worked for a Chinese state-run company, I visited South Korea for a business training session. After I returned, my boss asked me how it went," he reminisced. "I told him that South Korean workers put corporate profit first, but he found the very concept somewhat perplexing."

As for the strength of Chinese corporate culture, he picked fairness and flexibility, particularly pointing to its human resource management system.

"Corporate rankings not only go up but also down. The payrolls also differ according to the characteristics of the work. This makes sense, because bigger contributions to corporate profit must be rewarded with bigger payrolls."

A while ago, his company's vice president of the Shandong operation and team leader were ordered to switch positions based on their performance.

"There was even a case where a truck driver of the company was appointed the head of a regional production facility. That's something you don't see in companies in South Korea," Hong said.

Creating factions within companies, which takes place in many South Korean companies, is shunned in China, according to Hong.

"Factions cannot work without an authoritarian hierarchy. But the workers here have a natural anti-sentiment for such culture."

Chinese workers also find it tough to accept South Koreans' "bbali bbali" attitude, translated in English as "hurry up," which emphasizes speedy operations, he added.

Now, with construction under way on China's first museum on lighting by his company, which is expected to be completed in late October, Hong wishes to see the company increase its cultural presence in the region.

The museum, under construction in Rongcheng, will be mostly the replica of the beautifully designed Feelux lighting museum in Yangju, north of Seoul.

"In the past two decades, we focused on bulking up in size and numbers," Hong said. "We'd like to play a cultural role in the region as well with the museum's construction."

jwc@yna.co.kr
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