The recent Asia crises have changed the world's perception of the miracle of Asia Pacific countries, however the conglomerates still play and will do a very important role in the economies. Nevertheless, the recent past has provided a more critical insight in the region and proved that to hold onto their reputation in the future the Asian tigers will need to redevelop their key characteristics to build back the trust. Japan and South Korea, being the leading countries have a cascade effect on all the other countries in the region, so the change is sought in the reconstructi

"Guided capitalism" is a very appropriate term for Chaebol - few companies were specially selected and since the government controlled banking system, Chaebol was highly dependent on the state and production targets were set in order to meet the South Korean government objectives.

At the same time Korea was a colony of Japan and in 1907 Japanese abolished the Yi dynasty, which had ruled in Korea since the 1392 and forced Kojong, the last emperor of Korea, to abdicate. In 1910 Korea was formally declared to be a part of Japan. In 1920s and 1930s Japan introduced its zaibatsu model, characteristics of which were changed in favour of the Korean political circumstances. Chaebol - privately owned and run business organisation that is strictly controlled by the government was born and it was argued that Japan introduce this model to plan the economic development of Korea for its own market benefits.

South Korea after the war was still a relatively backward and economic growth was vital for the country. Due to the Japanese success, the chaebol system was recreated and its success strongly depended on the initiatives of Park Chung Hee who was the president of the country from 1961 to 1979. He had a great admiration for Japan and thought Chaebol to be crucial for the economic growth of Sough Korea. Another idea adopted from Japan was to move the economy towards exports rather than import substitution.

Due to such support by the 1980s Chaebol dominated manufacturing, trading and heavy industries. South Korea with its late development was in a situation where it could purchase rather than develop its own patents. That eliminated R&D costs and accordingly the costs of products.

Finally, Chaebol even nowadays is mostly family controlled and instead of having qualified managers within the company, the power is given to the family members which are not as competent. In Japan, after zaibatsu was destroyed, families did not regain the control over the keiretsu.

Some common words found in the essay are:
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Approximate Word count = 2203
Approximate Pages = 9 (250 words per page double spaced)