Chaebol

A chaebol (/ˈtʃeɪbɒl, ˈdʒɛbəl/; Korean:  (listen)) is a large industrial conglomerate that is run and controlled by an owner or family in South Korea. A chaebol often consists of a large number of diversified affiliates, controlled by an owner whose power over the group often exceeds legal authority. The term is often used in a context similar to that of the English word 'conglomerate'. The term was derived from the Japanese zaibatsu, sharing a similar structure and origins. It was first used in English in 1984. There are several dozen large South Korean family-controlled corporate groups that fall under this definition. A chaebol (/ˈtʃeɪbɒl, ˈdʒɛbəl/; Korean:  (listen)) is a large industrial conglomerate that is run and controlled by an owner or family in South Korea. A chaebol often consists of a large number of diversified affiliates, controlled by an owner whose power over the group often exceeds legal authority. The term is often used in a context similar to that of the English word 'conglomerate'. The term was derived from the Japanese zaibatsu, sharing a similar structure and origins. It was first used in English in 1984. There are several dozen large South Korean family-controlled corporate groups that fall under this definition. The chaebol have also played a significant role in South Korean politics. In 1988, a member of a chaebol family, Chung Mong-joon, president of Hyundai Heavy Industries, successfully ran for the National Assembly of South Korea. Other business leaders also were chosen to be members of the National Assembly through proportional representation. Hyundai has made efforts to contribute to the thawing North Korean and South Korean relations, but not without controversy. Many South Korean family-run chaebols have been criticized for low dividend payouts and other governance practices that favor controlling shareholders at the expense of ordinary investors. The word chaebol derived from the McCune–Reischauer romanization, chaebŏl, of the Korean word jaebeol (재벌, from jae 'wealth or property' + beol 'faction or clan' – also written with the same Chinese characters 財閥 as Zaibatsu in Japan). The word entered English use in the 1980s. South Korea's economy was small and predominantly agricultural well into the mid-20th century. However, the policies of President Park Chung Hee spurred rapid industrialization by promoting large businesses, following his seizure of power in 1961. The First Five Year Economic Plan by the government set industrial policy toward new investment, and the chaebol were to be guaranteed loans from the banking sector. The chaebol played a key role in developing new industries, markets, and export production, helping make South Korea one of the Four Asian Tigers.