chaebols

Chaebol is a Korean term referring to large, family-controlled business groups that own many diversified affiliates. These conglomerates typically span multiple sectors—electronics, automobiles, chemicals, finance—and are characterized by centralized management and cross-shareholdings that help a founding family maintain control over the group’s vast assets.

Chaebols arose in the 1950s and 1960s during South Korea’s state-led push for rapid industrialization. Governments and banks provided preferential credit and policy support, enabling these groups to grow through coordinated investments. Today, firms such as Samsung, Hyundai Motor Group, LG, SK, and Lotte are emblematic examples, with complex networks of subsidiaries and associated companies linked to a core family.

Governance in chaebols is often described as family-centric, with voting power and management concentrated in a founding or family-backed leadership. Their structure has included cross-ownership arrangements that complicate oversight and create potential conflicts of interest. They have faced scrutiny over transparency, succession, and political influence, and reform efforts intensified after the Asian Financial Crisis of 1997 and in later decades, including corporate governance codes and legal changes.

Despite criticism, chaebols remain central to the South Korean economy, accounting for a large share of GDP, exports, and employment. They drive innovation and global competitiveness but also raise concerns about market concentration, systemic risk, and the extent of political or financial ties with the state.