Social institutions and skill formation in Korean manufacturing industry: A comparison with Japan

This dissertation examines how Korean social institutions are affecting the organizational structures and training strategies of firms in a period of industrial restructuring. The impact of institutions is explored through comparison with Japan.;The institutional environment in Korea is characterized by strong influence of the family system, state intervention in vocational training, a centralized industrial organization, high labor mobility, and high prestige associated with formal education. In this institutional context, Korean firms have adopted a centralized work organization and a mass production strategy producing large volumes of standardized price-competitive products. The institutional context in Korea has favored the proliferation of semi-skilled work, a polarized distribution of skills, and narrowly defined work roles. The social institutions are closely related to work organization and training strategies at firm level, in a relationship of mutual conditioning.;International comparison demonstrates that different institutional arrangements provide different opportunities for skill formation to firms. While the institutional arrangements in Japan provide firms with an opportunity to adopt a flexible work organization and to train workers, the lack of coordination in the system of skill formation in Korea constrains, rather than supports, firms in upgrading their work organization and worker training. Also, the incompatibility of the employment system with advanced training practices results in a failure to provide workers with incentives to develop their skills. The study identifies the barriers to skill improvement and suggests some institutional reforms.;At the theoretical level, the study examines the applicability of the societal effect approach to East Asian societies. It is argued that the East Asian case reinforces the approach, but in a different way than for Western Europe. The institutional environment in East Asian societies is closely related to organizational structures and training strategies. However, organizational structures and skill formation in East Asia are influenced significantly by pre-industrial institutions such as the state, the family system, and education, in addition to institutional factors mentioned in the West European studies.