• Korean small business review
• /
• v.31 no.1
• /
• pp.73-88
• /
• 2009

This study examines the characteristics of 24 Korean hidden champions such as key success factors, core competences, strategic problems, and desirable future directions. The study categorized them into 8 types with Danny Miller's four trajectories and top manager's decision making style(rationality and passion). Danny Miller argued in his book, Icarus paradox, that outstanding firms will extend their orientations until they reach dangerous extremes and their momentum will result in common trajectories of decline. He suggested four very common success types: Craftsmen, Builders, Pioneers, Salesmen. He also suggested common trajectories of decline:Focusing(from Craftsmen to Tinkers), Venturing(from Builders to Imperialists), Inventing(from Pioneers to Escapists), Decoupling(from Salesmen to Drifts). In Korea, successful startups appear to possess three kinds of drive: Technology-drive, Vision-drive, Market-drive. Successful technology-driven firms tend to grow as craftsmen or pioneers. Successful vision-driven and market-driven ones tend to grow as builders and salesmen respectively. Korean top managers or founders seem to have two kinds of decision making style: Passion-based and Rationality-bases. Passion-based(passionate) entrepreneurs are biased towards action or proactiveness in competing and getting things done. Rationality- based ones tend to emphasis the effort devoted to scanning and analysing information to better understand a company's threats, opportunities and options. Consequently this study suggested 4*2 types of Korean hidden champions: (1) passionate craftsmen, (2) rational craftsmen, (3) passionate builders, (4) rational builders, (5) passionate pioneers, (6) rational pioneers, (7) passionate salesmen, (8) rational salesmen. These 8 type firms showed different success stories and appeared to possess different trajectories of decline. These hidden champions have acquired competitive advantage within domestic or globally niche markets in spite of the weak market power and lack of internal resources. They have maintained their sustainable competitiveness by utilizing three types of growth strategy; (1) penetrating into the global market, (2) exploring new service market, (3) occupying the domestic market. According to the types of growth strategy, these firms showed different financial outcomes and possessed different issues for maintaining their competitiveness. This study found that Korean hidden champions were facing serious challenges from the transforming economic structure these days and possessed the decline potential from their success momentum or self-complacence. It argues that they need to take a new growth engine not to decline in the turbulent environment. It also discusses how firms overcome the economic crisis and find a new business area in promising industries for the future. It summarized the recent policy of Korean government called as "Green Growth" and discussed how small firms utilize such benefits and supports from the government. Other implications for firm strategies and governmental policies were discussed.