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  • An Investigative Study of Confucian Humanism in the

    Development and Maintenance of Korean Business Groups

    Calvin Chong Kun Lee

    Thesis submitted in partial fulfilment of the requirements for the degree of Doctor of Business Administration.

    Faculty of Business and Enterprise Swinburne University of Technology


  • i

    Foreword This thesis has been prepared for submission in December 2008 to fulfil the requirements

    of the degree of Doctor of Business Administration (DBA) at Swinburne University of

    Technology, Melbourne, Australia.

    The study is trans-temporal and cross-disciplinary, and crosses cultural and linguistic

    boundaries of the East Asian nations of Korea, Japan and Greater China, and deploys

    tri-lingual vocabulary and concepts.

    Names of figures, places and events already popularised in the English language have

    been kept as in common use. Others have followed the international conventions of

    Romanisation as below:

    For Korean, the McCune-Reischauer system1 has been used. In the quotation of other

    works the conventions used by original sources have been maintained, unless changes

    were considered imperative.

    For Japanese, the Hepburn system2 has been used together with modification made to it

    by Kenkyushas new Japanese-English Dictionary, 3rd edition. In the quotation of other

    works, the conventions used by the original sources have been honoured, unless changes

    were considered necessary to maintain integrity of the texts.

    For Chinese, the Wade-Giles system3 has been used and pinyin equivalents are shown

    where deemed necessary. In the quotation of other works, the conventions used by

    original sources have been used, unless changes were considered desirable.

    1 McCune-Reischauer system:, examined 20 August 2008. 2 Hepburn system:, examined 20 August 2008. 3 Wade-Giles system,, examined 20 August 2008.

  • ii


    This study on Confucianism and Korean business groups is designed to examine

    Confucianism as a belief system and way of life in Korea in history and today, and how

    it influenced the birth and evolution of business groups.

    This thesis contains no material which has been submitted for examination in any other


    Confucianism is seen as a contiguous culture amongst the industrialised East Asian

    nations, namely, Korea, Japan and Greater China. The study explores how common or

    similar intellectual and cultural grounding influences for societal and economic ethics.

    The study also examines Confucian humanism and its ethical implications for business

    groups in Korea. Comparative examinations are also made, where possible and

    necessary, with the conglomerates of other East Asian nations, in particular those of


    The main research question lies in two hypothesised questions:

    (I) Does the foundation a ethics of Korean business groups derive from

    Confucianism and do their operating principles still remain anchored at the

    Confucian humanism?

    (ii) Does Confucian humanism remain central to Korean business groups as the

    principal determinant of their global strategies and the underpinning of corporate


    Three elements of research strategy were deployed, namely (1) literature review, (2)

    focus group discussions and (3) documentation corroborations.

    The literature reviewed been selected mostly from the scholarly works of Korea and

    other Confucian East Asian countries, and also from those of non-Asian international


    Narrative data were obtained from the focus group discussions. Discussants were from

    the five functional groups on the level of senior managers of as many leading business

    groups. Discussants were selected from those with substantial interest in, or

    understanding of Confucianism. Those five occupational sectors represented are: 1)

  • iii

    strategic management group, 2) global network management group, 3) research and

    development, 4) labour and union relations, and 5) investor relations and


    Documentation was referenced as complementary to narrations and also as

    corroboration of what the focus groups expressed through unstructured discussions.

    Documentary sources were corporate internal documents public use, government or

    official publications, and media-based databases.

    The study explores the origin of Confucianism and proceeds to examine how the

    Confucian philosophical tradition gave naissance to Confucian humanism as a living

    tradition. From Confucian humanism, the thesis proceeds to examine Confucian

    governance (ching shih) that remained the central theme of Confucian public service

    since the adoption of orthodox Confucianism as the state ideology of China and Korea,

    and governance of senior management of business groups in modern corporate


    While the Confucian ideal of the sagely sovereigns persists as an enduring

    governance model, complementary and alternative political views of more egalitarian

    inclinations, such as that of Mencius, also take up a good part of the governance theme.

    The role of Confucian lifelong self-cultivation and education has been examined as the

    foundation of character-building and the reservoir of human capital for societal and

    corporate roles vis--vis knowledge-based industries, where business groups in Korea

    are focused.

    As regards the modern context of Confucian governance, its interactions and

    accommodation of the modern democratic institution of global governance have been

    examined beyond its fertile demo-centric Confucian social ethos and egalitarian strand

    of Confucian tradition.

    The study highlights the fact that the Confucian tradition of humanity that Confucius

    and his disciples formulated in the Classical age has endured through the ages to

    modernity. The Confucian cosmology of the human to nature nexus and the

    Confucian spirituality of cosmic immanence in the self provide clues to the multi-

    layered structure of Confucian consciousness of self, selves and the greater self,

    namely society or the Heaven itself.

  • iv

    The Neo-Confucian school of mind and heart learning reinforced the inquiry into

    selves in connection with nature and the universe. Religious tolerance and the

    adaptability of Confucianism have stood out as important qualities in the globalization

    of East Asian values and ethos, including those of Korean. The secularism and

    spirituality of Confucianism benefited from the peaceful co-existence amongst the three

    great philosophical traditions of Confucianism, Taoism and Buddhism, blessed as they

    are with very little inter-religious conflict throughout history.

    The thesis, as an inquiry into Confucian humanism as a living tradition of extraordinary

    resilience as applied to the nascence and evolution of business groups, concludes by

    answering the main research question as expressed in its two associated hypotheses.

  • v

    Doctor of Business Administration (DBA) TABLE OF CONTENTS


    Foreword (with Romanisation Conventions) i Abstract ii Table of Contents v Acknowledgements ix Declaration x List of Tables, Diagrams and Figures xi

    Chapter One: Introduction 1.1 INTRODUCTION 1

    1.1.1 Industrialised Confucian East-Asia and Korea 1 1.1.2 Aims 2 1.1.3 Rationale 2



    1.3 RESEARCH STRATEGY 6 1.3.1 Research Elements 6

    1.4 ROADMAP OF THESIS AND TIMELINE 8 1.4.1 Roadmap 8 1.4.2 Timeline 9

    1.5 SUMMARY 9

    Chapter Two: Origin and Evolution of Confucian Humanism 2.1 INTRODUCTION 10

    2.1.1 Main Strands of Confucian Ideas and Key Figures 11 2.2 CONFUCIANISM 12

    2.2.1 Collective Intentionality 13 2.2.2 The Contributions of the Korean Neo-Confucian Toegye 14

    2.2.3 Self-cultivation and Humanism 15 2.3 CONFUCIAN HUMANISM 16

    2.3.1 Confucian Humanity 16 2.3.2 Mencian Humanism and Governance Ideals 18 2.3.3 Chung-Yung (The Doctrine of the Mean): Superior Personhood,

    Community of Trust and Sincerity 20

    2.3.4 Confucianism and its Encounter with Taoism and Mahayana Buddhism 23 2.3.5 I Ching: Source of Imagination for Confucian Creativity 26

    2.4 CONFUCIAN GOVERNANCE 29 2.4.1 Governance: Sovereign as a Sage Ideal: Ching-hsi 29 2.4.2 Legalism: An Alternative to Confucian and Mencian Views 31 2.4.3 Confucian Power-Knowledge (governmentality), Hierarchy and

    Governance 33

    2.5 CONFUCIAN REFORMATION: REDISCOVERY AND PRACTICAL LEARNING 35 2.5.1 Chang Tsai and the Coming of Neo-Confucianism 35 2.5.2 Chu Hsi: Reformation and Integration into Neo-Confucianism 37 2.5.3 The Lu-Wang School: A Major Challenge to Chu Hsi Orthodoxy of Neo-

    Confucianism 42

  • vi

    2.5.4 Wang Yang-ming and the School of Yang-ming 44 2.5.5 Practical Learning: Sirhak in Yi Dynasty Korea 48

    2.6 SUMMARY 52

    Chapter Three: Confucian Business Groups 3.1 INTRODUCTION 54