Characteristics and Key Success

Factors in Family Business: The Case

of Korean Immigrant Businesses in
Metro-Atlanta
Young-Ho Nam, James I. Herbert

Immigrant businesses in the United States are a vibrant and growing part of the economy, and
their similarities and differences to other family businesses in the U.S. are worthy of investigation.This
paper examines two elements of Korean immigrant businesses in Metro-Atlanta: characteristics
(ethnic business, general family business, ownership and succession planning, strategic planning,
and conflict and communication) and key success factors. There were 93 respondents in this explor-
atory study. This paper discusses the results and implications of the study.

Introduction The exploratory study that this paper dis-

One of the largest beneficiaries of the Immigra-
tion Act of 1965 is the Korean ethnic commu-
nity. As a result, the U.S. Korean population in
the United States has increased from 69,130 in
1970 to 797,304 in 1990 (U.S. Department of
Commerce, 1990).
Korean immigrant businesses are owned
and/or managed primarily by family members
(Min, 1984; Min & Jaret, 1984; Kim & Hurh,
1985; Hurh & Kim, 1990; Yoon, 1991). Like
other ethnic businesses, they encounter numer-
ous difficulties, including language barriers,
cultural differences, rising competition, racial
segregation, taxes, and money problems (But-
ler, 1991; Herbert, 1989; Herbert, 1990). Ad-
ditionally, they also face the complexities of
family dynamics. Among the most prevalent
of these dynamics are ownership, succession,
family harmony, and solidarity. Prior research
of Korean immigrant businesses (Min, 1984;
Min & Jaret, 1984; Kim & Hurh, 1985; Hurh
& Kim, 1990; Min, 1990; Yoon, 1991) focused
on sociology—not on management or family
business dynamics.
cusses focuses on the management of Korean
family business. This paper describes the promi-
nent characteristics of a Korean immigrant fam-
ily business sample and its owner-managers. It
also explores key success factors of Korean fam-
ily businesses based on survey and interview data
from Korean immigrant businesses in Metro-
Atlanta.
Review of the Literature
Most research on family business is less than 10
years old (Shanker & Astrachan, 1996), and stud-
ies of family business characteristics, especially
about the ethnic entrepreneur, are sparse.
Herbert (1989,1990) offers a model for person-
ality studies of ethnic entrepreneurs and their
families. As opposed to family business studies, a
fair amount of social science research focuses on
ethnic entrepreneurship (Wong, McReynolds, &
Wong, 1992). Butler (1991) addresses the rela-
tionship between ethnicity, small enterprises, and
adjustment to American society in his concep-
tion of the sociology of entrepreneurships.

FAMILY BUSINESS REVIEW, vol. XII, no. 4, December 1999 © Family Firm Institute, Inc. 341
Nam, Herbert
Butler’s research makes a significant contribution
to our understanding of the economic growth and
stability among ethnic groups.
Light and Bonacich (1988) examined the
sociology of Korean immigrant characteristics
between 1965 and 1982. According to this re-
port, the Korean influx stabilized neighborhoods,
improved public education, counteracted street
crime, and injected new capital and entrepreneur-
ial vigor into the U.S. economy. Korean immi-
grants had the motive, money, and education to
open small business enterprises and had ethnic
resources that assisted them in business.
Min and Jaret (1984) and Yoon (1991) re-
searched ethnic resources (i.e., financial re-
sources, information or business advice one can
gather from family members and friends) and
class resources (i.e., individual human capital) in
Korean immigrant businesses. According to
Yoon (1991), in African American neighborhoods
ethnic resources were important at the initial
stage of business while class resources become
more important at the advanced stage of busi-
ness development. The characteristics of Chi-
nese family business appears to have similarities
to the characteristics of Korean (Bates, 1997b)
and African American firms. Similarities include
a succession plan, kinship relationships, business
continuity, and family members hired. Dean
(1992) found that African American family busi-
ness owners have written business plans and
guidelines, report relatively little conflict and
ambiguity about family business, have no succes-
sion plan, and highlight special racial and
ethnicity concerns. Wong, McReynolds, and
Wong (1992) examined the role of ethnicity and
kinship in the economic adaptation of Chinese
family firms in the San Francisco Bay area. They
found that Chinese family businesses have strong
kinship, create a more harmonious business en-
vironment, keep ownership of family firms in the
nuclear family, extend preference in hiring to
family members and relatives, and have little or
no desire for continuity of business across gen-
erations.
Research into key success factors of Korean
immigrant businesses is quite limited. Min and
342
Jaret (1984) and Light and Bonacich (1988) found
the following key success factors of the Korean
immigrant small business: hard work, frugality,
location in a predominantly African American
area, and the cooperative efforts of family mem-
bers. Conversely, they also found that Korean
businesses thrive in spite of little support from
large American corporations or from the use of
other Korean ethnic resources and solidarity.
There are few family business studies about
Korean immigrant businesses. Min and Jaret
(1984) examined Korean small businesses in At-
lanta, but the focus of their study was sociologi-
cal. The Atlanta Business Chronicle’s research
(March, 27, 1998) indicated that Atlanta had
more than 1,200 Korean-owned businesses in
1998, up from 326 in 1982.
Korean Business Culture
Korea is a traditional country with a long history
and a complicated culture composed of four lev-
els: Shamanism, Buddhism, Confucianism, and
Christianity (Lee, 1988). Especially important is
the first level, Shamanism, which is a fundamen-
tal Korean culture dating back to primitive times.
It dictates the procedures of the ceremonial oc-
casions (coming of age, marriage, funeral, and
ancestral worship) and focuses on family.
Likewise, Confucian traditions and heritage,
in which hard work, education, and loyalty are
great virtues, control many aspects of life in Ko-
rean society. Confucianism is the dominant phi-
losophy behind the Korean culture and moral
codes. Confucian systems include ancestor wor-
ship; filial piety; loyalty to organization, family,
and friends; respect for the hierarchy of occupa-
tional ranking; desire for and respect of educa-
tion; and respect for elders and seniors (Lee and
Yoo, 1987).
Lee and Yoo (1987) identified the distin-
guishing characteristics of Korean management
as clan management, Confucian work ethic, loy-
alty, and bureaucratic conflict resolution. One
strong characteristic of Korean management is
management by family. Family consists of those
who descend from one common progenitor and
 Characteristics and Key Success Factors in Family Business
share the same surname. Koreans worship an-
cestors and prefer family to others. In general,
Koreans use the strong sense of family when they
carry out their will. The family name is very im-
portant— an unchangeable and firm symbol that
cannot be replaced.
In addition, various social connections based
on clan, hometown, or school have substantial
impact on various levels of relationships within
the company. Kinship is a key element of immi-
grant businesses. Kins is defined as relatives for
whom one would wear mourning in accordance
with rituals set out in ancient books of feudal
times (Wong, McReynolds, & Wong, 1992). The
importance of relatives or lineage cannot be over-
emphasized.
Methodology
The criterion for being a family business in this
study was ownership and management of a busi-
ness by more than one family member (Hollander
& Elman, 1988; Astrachan & Astrachan, 1993).
This definition of family business is clearly less
restrictive than other definitions because it is not
dependent on the involvement of more than one
family member (Winter, Fitzgerald, Heck,
Haynes, & Danes, 1998). Using such a broad
definition lets into our sample relatively young
and small family businesses.
The study sample focused on Korean immi-
grant businesses in Metro-Atlanta. The busi-
nesses were identified from three sources: The
Korean Business Directory of the Southeast (1995),
The Korean Directory of Atlanta (1996), and The
Korean Yellow Pages (1998). The sample covered
all industries except those that require specific
and professional qualifications (e.g., lawyers,
CPAs, physicians). It did not include professional,
scientific, technical services, and healthcare.
A questionnaire was mailed to 643 compa-
nies along with a cover letter describing the ques-
tionnaire and providing instructions for its
completion. An addressed, stamped, return en-
velope was also included. Seventeen question-
naires were returned undelivered due to incor-
rect addresses. One hundred four questionnaires
were returned completed. Eleven respondents,
including one nonfamily business, were disquali-
fied. The valid sample, then, included 93 ques-
tionnaires (a 14.5% response rate). The response
rate, though low, is consistent with other mail
surveys of family businesses (Arthur Andersen
Center for Family Business/MassMutual, 1997).
The questionnaire was written in both En-
glish and Korean and contained demographic/
basic as well as other questions. The demo-
graphic questions covered type of business, type
of ownership, age of business, number of employ-
ees, age of owners, educational level, gender, and
generation. The remaining questions were di-
vided into open-ended questions (two items) and
closed-ended questions (25 items). Open-ended
questions focused on key success factors and
causes of company stress. Closed-ended ques-
tions delved into five parts: (a) eight items fo-
cused on ethnic business, (b) four focused on
general family business, (c) three focused on
ownership and succession planning, (d) six fo-
cused on strategic planning, and (e) four focused
on conflict and communication. The data were
collected during the period between May 16 and
July 10, 1998.
The analysis used a variety of statistical tech-
niques. Characteristics of Korean immigrant
businesses were examined using frequencies, and
key success factors of Korean immigrant busi-
nesses were analyzed using frequencies, nonpara-
metric tests, analysis of variance, and correlational
analyses.
Sample Characteristics
The sample characteristics consist of profiles of
both businesses and respondents. The business
characteristics covered four basic areas: type of
business, number of employees, age of business,
and type of ownership (see Table 1). The type
of businesses represented by this sample was
overwhelmingly concentrated in wholesale and
retail trade, including grocery (50.0%). Other
services included laundry services (22.2%), con-
struction and manufacturing (12.2%), real es-
tate and support services (7.8%), and food ser-
343
Nam, Herbert

vices (7.8%). The average number of employ-
ees (including family and nonfamily members)
for these Korean immigrant businesses in
Metro-Atlanta was small, with 78.7% report-
ing only five or less. Just 2.2% reported having
more than 21 employees. Ninety-one percent
of the respondents reported the age of business
at less than 10 years. With respect to type of
ownership, 78.0% reported being a sole pro-
prietorship, and 19.8% reported being a cor-
poration. Therefore, most Korean family busi-
nesses operate as sole proprietorships.
Respondent characteristics covered four ba-
sic areas: age of owners, educational level, gen-
eration of business, and gender. Owners are very
young with 73.1% of the respondents indicating
they are younger than 50 years of age. With re-
spect to generation, 95.3% of the businesses are
in their first generation. The most prevalent level
of education attained by respondents was more
than a college degree, with 51.1% holding an
undergraduate degree and 9.1% holding a post-
graduate degree. Finally, males made up 71.3%
of the sample and females, 26.9%.

Table 1. Profiles of Sample Businesses and Respondents

Business Profile
Type of Business Frequency (%) Age of Family Business
Construction & manufacturing 11 (12.2) Years Frequency (%)
Wholesale & retail trade (includes grocery) 45 (50.0) 1-5 58 (65.2)
Real estate & support services 7 (7.8) 6-10 23 (25.8)
Food services 7 (7.8) 11-15 4 (4.4)
Other services (includes laundry) 20 (22.2) 16-20 2 (2.2)
21 and older 2 (2.2)

Number of Employees Frequency (%) Type of Ownership Frequency (%)

1-5 70 (78.7) Sole proprietor 71 (78.0)
6-10 13 (4.5) Corporation 18 (19.8)
11-20 4 (4.4) Partnership 1 (1.1)
21-40 2 (2.2) Other 1 (1.1)

Respondent Profile
Age of Owners Number (%) Educational Level Number (%)
30-39 29 (31.2) High school 19 (21.6)
40-49 39 (41.9) College (2 year) 16 (18.2)
50-59 18 (19.4) University ( 4 year) 45 (51.1)
60-69 7 (7.5) More than university 8 (9.1)

Generation of Business Number (%) Gender Frequency (%)

First generation 81 (95.3%) Male 62 (71.3%)
Second generation 4 (4.7%) Female 25 (26.9%)

344
 Characteristics and Key Success Factors in Family Business
Characteristics of Korean
Immigrant Businesses
This study is divided into five parts identified as
relevant to family business (Aronoff, Astrachan,
& Ward, 1996; Family Enterprise Center, 1998):
ethnic business, general family business, owner-
ship and succession planning, strategic planning,
and conflict (see Table 2).
Ethnic Business. This study found that Ko-
rean immigrant business ownership is rooted in
the desire to make more money (43.0%), own a
business (20.4%), and be socially responsible
(9.7%). Desire for succession into the next gen-
eration was extremely low (2.2%). These find-
ings are similar to Chinese immigrant business
findings (Wong, McReynolds, & Wong, 1992).
The financial sources for business capital
came from American bankers (34.4%), family or
relatives (31.2%), personal savings (17.2%), Ko-
rean bankers (7.5%), and Rotating Credit Asso-
ciation (RCA) (5.4%). When borrowing money
was necessary, the usual strategy included con-
sideration of all of these sources. The results of
Wong, McReynolds, and Wong’s (1992) research
on Chinese family firms in the San Francisco Bay
area were consistent with the current study. How-
ever, Yoon’s (1991) study of Korean immigrant
businesses in Chicago was not consistent with this
one. Yoon (1991) reported the following find-
ings: personal savings (31.2%), loans from rela-
tives and friends (27.6%), RCA (14.1%), and
bankers (13.8%). It is noteworthy that the cur-
rent sample relied less on RCA (5.4%) and more
on bankers (41.9%— of which American bank-
ers accounted for 34.4% and Korean bankers
7.5%). After all, RCA typifies the process
whereby supportive peer and community sub-
groups assist in the creation and operation of
firms by providing social capital in the form of
loans (Bates, 1997a).
The locations of Korean businesses are
spread evenly among Korea Town (32.3%),
multi-ethnic areas (28.0%), White areas (21.5%),
and African American areas (15.1%) (see Table
2). These results are inconsistent with Min and
Jaret’s research (1984), which claimed that it was
more advantageous and beneficial for a Korean
small business to be located in predominantly
African American areas rather than White areas.
A clear majority of respondents (60.9%)
hired Koreans as new employees, followed by
Hispanics (16.3%), Whites (9.8%), and African
Americans (7.6%). As evident in Table 2, the
criteria for hiring were: shared the same language
and culture (36.9%), good attitude and diligence
(20.4%), and strong sense of responsibility
(16.5%). The above traits are important in hir-
ing employees, because new employees interact
mainly with customers or suppliers half or most
of the time (67.8%).
Traditionally, Koreans trust only relatives or
family members. They take important informa-
tion about financing and ask for advice from re-
liable relatives or kin. Reinforcing this is that only
about half of the respondents could speak En-
glish well (good: 50.1%, not good: 49.5%).
The study researched the factors contribut-
ing to high stress in the company by using open-
ended questions. Company stressors felt most
often were: language barriers and cultural differ-
ences (25.3%), money problems (16.0%), fierce
competition (12%) and customer relations
(12.0%), employee management (10.7%), and
economic condition of home country (6.7%).
Min (1990) argued that the major problems of
some Korean immigrant entrepreneurs in the
United States are connected to their dependency
on ethnic attachment and ethnic solidarity com-
bined with the use of the Korean language and
Korean customs in their businesses. This depen-
dency hinders their cultural and social assimila-
tion.
General Family Business. Korean immi-
grant businesses rely heavily on family labor, es-
pecially from the spouse. More than 74% had
family members who work full time in their busi-
nesses. Spouses (48.9%) represented the most
important source of family labor, with son and
brother/sister reported at 4.6% each. More than
half the respondents (50.5%), reported having
unpaid family laborers. Among the unpaid fam-
ily laborers, the majority was spouses (73.9%),
followed by children (17.4%), parents (6.5%), and
brothers and sisters (2.1%). These findings are
345
Nam, Herbert

Table 2. Summary of Characteristics of Korean Immigrant Businesses

Ethnic Business
Purpose Frequency (%) Money Source Frequency (%)
To make more money 40 (43.0) American bankers 32 (34.4)
To own business 19 (20.4) Family or relatives 29 (31.2)
To be socially responsible 9 (9.7) Personal savings 16 (17.2)
To overcome disad. in U.S. markets 8 (8.6) Korean bankers 7 (7.5)
To succeed in business 2 (2.2) RCA 5 (5.4)
To contribute to Korea’s economy 2 ( 2.2) Korean friends 1 ( 1.1)
Other 13 (13.9) Other 3 ( 3.2)

Business Location Frequency (%) New Employee Frequency (%)

Korea Town 30 (32.3) Koreans 56 (60.9)
Complex area 26 (28.0) Hispanics 15 (16.3)
White area 20 (21.5) Whites 9 (9.8)
African American area 14 (15.1) African Americans 5 (7.6)
Other 3 (3.2) Other 7 (7.6)

New Employee Hiring Traits Frequency (%) Most Company Stress Frequency (%)
Same language & culture 38 (36.9) Language barrier & cultural difference 19 (25.3)
Good attitude & diligence 21 (20.4) Money 12 (16.0)
Strong responsibility 17 (16.5) Competition 9 (12.0)
Easy to deal with 15 (14.5) Customer relations 9 (12.0)
Employee relations 8 (10.7)
Long hours of hard work &others 6 (8.0)
Economic condition of Korea 5 (6.7)
Racial segregation 3 (4.0)
Crisis in work condition 2 (2.7)

General Family Business

Full-Time
Unpaid Family Laborer Frequency (%) Employee Frequency (%) Frequency (%)
None 45 (49.5) 1 person 42 (77.8) None 31 (36.0)
Spouse 34 (37.4) 2 person 5 (9.2) Spouse 42 (48.9)
Children 8 (8.8) 3 person 4 (7.4) Son 4 (4.6)
Parents 3 (3.3) 4 person 2 (3.7) Brother/sister 4 (4.6)
Brother/sister 1 (1.1) 6 person 1 ( 1.9) Cousin/aunt 1 (1.2)
Daughter 1 (1.2)
Other relative 3 (3.5)

Treat Woman Without Regard to Gender English Ability is Good

Yes 71 (77.2) Yes 46 (50.1)
No 21 (22.8) No 45 (49.5)

Ownership & Succession Planning

Board of Directors Ownership Have Succession Planning
None 74 (81.3) One family 73 (80.2) Yes: 17 (18.5)
Not at all 6 (6.6) Two families 13 (14.3) No: 75 (81.5)
1 to 2 times 4 (4.4) More than three families 2 (2.2)
More than or 3 to 4 times 7(7.7) None 3 (3.3)

346
Nam, Herbert

Table 2. Summary of Characteristics of Korean Immigrant Businesses

(continued)
Strategic Planning
Target Customer Frequency (%) Main Competitor Frequency (%)
White 47 (33.3) Korean 57 (57.6)
Korean 39 (27.7) White 29 (29.3)
African American 36 (25.5) African American 3 (3.0)
Hispanic 10 (7.1) Other 10 (10.0)
Other 9 (6.4)

Interact with Outside People Where to Get Important Information

About half of the time 34 (36.6%) Same industry 50 (49.5%)
Most of the time 29 (31.2%) Korean institute 20 (19.8%)
Some of the time 22 (23.7%) Expert or consultant 7 (6.9%)
Hardly at all 6 (6.5%) Extended family 5 (5.0%)
Never 2 (2.2 %) Friends 5 (5.0%)
Government sources 4 (3.9%)
Other 10 (9.9%)

Have Written Mission/Vision Have Goals/Objectives

Yes 40 (44.9) Yes 73 (82.0)
No 49 (55.1) No 16 (18.0)

Conflict & Communication

Clear Family Rules Yes 56 (60.8) Some Family Fighting Yes 31 (34.8)
No 36 (39.1) No 58 (65.2)

Regular Family Meetings Yes 27 (29.0) Good Harmony Yes 75 (80.6)

No 66 (71.0) No 18 (19.4)

consistent with those of Shanker and Astrachan
(1996), who observed that smaller family busi-
nesses often use both paid and nonpaid family
labor, especially when starting out. Most of the
businesses—(77.2%)— treated woman in a man-
ner similar to men. The current research is con-
sistent with prior research (Yoon, 1991) that hus-
band and wife comprise the basic unit of Korean
immigrant businesses.
Ownership and Succession Planning. Table
2 shows ownership and succession planning re-
garding Korean immigrant businesses in Metro-
Atlanta. According to the research, 80.2% of the
companies were owned by one family, and 14.3%
were owned by two families. Also, 87.9% had no
board of directors. Of particular interest was the
response to whether the owners had a formal
written succession plan. Only 17 owners (18.5%)
indicated they have a formal written succession
plan. This finding seems to correlate with age of
owners and their businesses: 73.1% of the respon-
dents indicated they were younger than 50 years
of age, and 91.0% reported the age of business
as less than 10 years. In addition, 95.3% of the
businesses were in their first generation. Hence,
the respondents were mainly sole proprietorships
(78.0%) without succession plans (see Table 1).
Strategic Planning. Strategic planning con-
tains six questions: “Who is your target cus-
tomer?” “Who is your main competitor?”
“Where do you get important information to run
your business?” “How often does your job re-

347
 Characteristics and Key Success Factors in Family Business
quire that you interact with people outside your
company?” “Does your company have a written
mission/vision?” and “Does your company have
goals/objectives?”
Target customers are White (33.3%), Ko-
rean (27.7%), and African American (25.5%).
With respect to main competition, other Kore-
ans represent 57.6%, whereas Whites account for
29.3%. Korean small business owners obtain
important information from the same industry
(49.5%) and Korean institutes (19.8%). Respon-
dents report that they have goals or objectives
(82.0%), but not written mission or vision state-
ments (55.1%). Korean immigrant businesses
seem to have only oral and vague goals or mis-
sions. For example, interviewees in the sample
stated, “I want to extend my business” or “ I want
to do another business and yield the current shop
to my wife.”
Every year, tens of thousands of small com-
panies fail (Wheelen & Hunger, 1998). The un-
derlying problem appears to be an overall lack of
strategic management, beginning with an inabil-
ity to plan a strategy to reach the customer and
ending with a failure to develop a system of con-
trols to keep track of performance (Lussier, 1995).
Ward (1988) emphasizes the importance of
strategic planning. For example, how do pros-
pering firms plan actively and add new strategies
to their businesses as their environments change?
Business and family strategic planning promotes
continuity in family businesses, yet few of the
businesses in this sample do this. The lack of stra-
tegic planning puts into question these firms’
long-term success and survival.
Conflict and Communication. Table 2 shows
that a majority of Korean immigrant businesses
have clear family rules (60.8%), and a great ma-
jority are in good harmony (80.6%) with no fam-
ily fighting (65.2%). However, few respondents
(29.0%) have regular family meetings. Possibly,
the reason why a vast majority of respondents don’t
have regular family meetings (71.0%), but never-
theless think they have good harmony, is that a
great majority of respondents were husband and
wife teams. For example, the husband takes care
of the documentation and the wife is in charge of
348
the accounting. The decision maker is the family
head (mainly the husband) and authority is ac-
corded by age and gender.
Korean family firms owned by first-genera-
tion immigrants tend to be operated in a very
traditional manner, reflecting Korean society in
general. Traditionally, Korean society is male
oriented. However, if Korean family businesses
hope to grow, they must include women in fam-
ily meetings.
Likewise, Aronoff and Ward (1992) argue for
the importance of family meetings: “Family
meetings can help build a strong family and a
stronger business. They help the family plan for
the future of the business in an orderly and con-
structive way. In fact, we believe family meetings
are one of the two most important steps a busi-
ness owner can take to ensure the continuity of
the family business” (pg. 3). To understand the
relationship between the concept of family meet-
ings and Korean family culture, further research
is necessary.
Key Success Factors of Korean
Immigrant Businesses
The study used open-ended questions to obtain
Korean immigrant businesses’ evaluations of the
factors that contributed to their own business
success. Those who felt their business was cur-
rently successful were asked which factors made
their business successful (see Table 3). One-third
of the respondents (33.3%) gave “sincerity” as
an important factor for business success, and
18.9% ranked “diligence” as a success factor.
“Effort” was 11.7%, and “honesty” or “credibil-
ity” were 9.0%. Kindness, customer satisfac-
tion, thriftiness, and responsibility were minimal
factors. Min and Jaret (1984) and Lee and Yoo
(1987) asserted that hard work is considered the
greatest ingredient for business success. One can
make a good living in the United States if they
are willing to work hard (Light & Bonacich,
1988). There seems to be a strong relationship
in a broad sense between sincerity, diligence, ef-
fort, and hard work. According to Min and Jaret
(1984), “The only way they [Korean store own-
Nam, Herbert
Table 3. Key Success Factors of Korean Immigrant Businesses
Key Success Factor Frequency (%)
Sincerity 37 (33.3)
Effort 13 (11.7)
Kindness 6 (5.4)
Service, thriftiness, faith 4 (3.6)
ers] can make more money is to keep the store
open long hours, work hard oneself, and not use
paid employees.”
Table 4 shows the characteristics of success-
ful businesses by net income (ANOVA). The
related variables of successful businesses charac-
teristics by net income were target customer, fu-
ture goal or objectives, money source, unpaid
family laborer, written mission or vision, and
treatment of woman as equals. Further examina-
tion of these variables is necessary.
Table 5 shows the correlation matrix between
variables and net income using Spearman’s rho.
The correlation between net income and vari-
ables was significant and statistically positive for
written mission/vision, goal/objectives, and num-
ber of employees and significant and statistically
negative for target customer. When the target
customer was Korean (not in Korea Town) or
African American, businesses mainly showed a
loss in net income. When the target customer
was White, the result was a profit. When the
target customer was Korean located in Korea
Town, results were also good. When the target
customer was White located in a White area,
good outcomes (correlation coefficient 0.429)
were realized. Again, this study is inconsistent
with Min & Jaret’s research (1984), which found
that businesses located in African American ar-
eas were more advantageous and profitable for
Korean small business than those in White ar-
eas.
Businesses with a written mission, vision state-
ment, and concrete future goal objectives were
largely profitable. Table 5 shows correlations be-
tween the variables of succession planning, family
rules, number of employees, board of directors,
goal/objectives, and written mission/vision.
Key Success Factor Frequency (%)
Diligence 21 (18.9)
Honesty/credit 10 (9.0)
Satisfaction 5 (4.5)
Responsibility 3 (2.7)
Conclusion and Discussion
This paper looked at the important role of fam-
ily businesses, especially ethnic businesses, in the
United States and posed two main questions:
What are the characteristics of family businesses?
and What are the key success factors of Korean
immigrant businesses in Metro-Atlanta? Al-
though the identification of significant variables
helps to answer these questions, data limitations,
as well as the restrictive geographical region of
the study, prevent arriving at thorough answers.
Further study is needed to gain a better perspec-
tive of the scope of this research, including iden-
tifying other variables for examination.
Summary. The management purposes of the
sample businesses were in keeping with the pur-
suit of the American Dream: mainly, to make more
money and to own one’s own business. These find-
ings are similar to the body of knowledge regard-
ing family businesses and closely held enterprises.
Most businesses surveyed did not have a board of
directors. Only a small number of respondents
had formal written succession plans, and even
fewer held regular family meetings. The manage-
ment of the sample firms was simple, small, and
traditional, like firms in Korea.
Financial sources for the businesses were
primarily American bankers, and family, and/or
relatives. This is a significant finding, especially
given the discrimination in credit markets that
African Americans and other racial/ethnic groups
face (Koretz, 1998). In addition, conventional
wisdom led us to believe that RCAs were pri-
mary sources of peer/community support and
business capital. This study suggests otherwise.
Korean immigrant family businesses were lo-
cated in Korea Town, complex areas, and White
areas. Target customers were White, Korean, and
349
 Characteristics and Key Success Factors in Family Business

Table 4. Characteristics of Successful Businesses by Net Income (ANOVA)

Source of Variable Sum of Squares df Mean F (p)

Target Customer Between group 18.345 4 4.586 2.88 (0.028)

Within group 130.575 82 1.592
Total 148.920 86

Goal/Objectives Between group 8.913 4 2.228 4.46 (0.003)

Within group 39.911 80 0.499
Total 48.824 84

Money Source Between group 40.196 4 10.049 2.56 (0.044)

Within group 321.735 82 3.394
Total 361.931 86

Unpaid Family Laborer Between group 28.716 4 7.179 6.05 (0.000)

Within group 96.087 81 1.186
Total 124.802 85

Written Mission/Vision Between group 8.655 4 2.164 1.34 (0.014)

Within group 50.502 78 0.647
Total 59.157 82

Treat Women Without Between group 7.056 4 1.764 2.86 (0.029)

Regard to Gender Within group 49.979 81 0.617
Total 57.035 85

African American. The main competitors were
Koreans and Whites.
Unpaid labor provides invaluable human
capital, and the spouse was the most important
source of family labor. Women in Korean immi-
grant family businesses were treated quite dif-
ferently from how they are treated in traditional
Korean society. Also, strong family ties were sig-
nificant contributors to the success of these busi-
nesses. The key success factors of this sample
were sincerity, diligence, effort, and honesty.
The main reasons why Korean immigrant en-
terprises experience difficulties launching their busi-
nesses are language barriers and cultural differences.
Finally, net income was greater when there
was a target customer in a good area, a goal, a
written mission or vision statement, unpaid fam-
ily labor, and the unbiased treatment of women.
In addition, strategic and succession planning are
positively correlated with net income, especially
target customer, written mission/vision state-
ment, and goal/objectives.
Implications
The findings of this paper should be of interest
not only to academicians, but to prospective
Korean immigrant and other ethnic entrepre-

350
Nam, Herbert

Table 5. Correlation Matrix Between Variables (Spearman’s rho)

1 2 3 4 5 6 7 8 9 10 11
1. Money Source 1.000
2. Target Customer -.094 1.000
3. Located Community .003 .429**1.000
4. Board of Directors -.209* -.011 .081 1.000
5. Written Mission/Vision -.015 .036 -.050 .113 1.000
6. Succession Planning -.092 -.164 -.027 .160 .463** 1.000
7. Goal/Objectives -.018 -.079 -.082 .326** .301** .201 1.000
8. Working Years -.349** -.009 .102 -.094 -.046 -.009 -.133 1.000
9. Family Rules -.102 .009 -.043 .081 .243* .146 .308** -.016 1.000
10. Number of Employees -.333** .064 .118 .421** .220* .118 .245* .236* .040 1.000
11. Net Income -.042 -.230* -.052 .148 .352** .164 .218* .172 .039 .303**1.000

**Correlation is significant at the .01 level, 2-tailed.

*Correlation is significant at the .05 level, 2-tailed.

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Because ethnic resources are limited (Yoon,
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This research identified characteristics and
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Young-Ho Nam is visiting associate professor of management and entrepreneurship at the Family Enterprise
Center of the Michael J. Coles College of Business at Kennesaw State University, Kennesaw, GA, and professor
of business administration at the College of Social Science at Kon-Kuk University, Chungju, Korea. James I.
Herbert is an associate professor of management and entrepreneurship and director of the urban enterprise
initiative at the Family Enterprise Center of the Michael J. Coles College of Business at Kennesaw State
University, Kennesaw, GA.

Acknowledgments: This paper and the process it describes would not have been possible without the
help of Craig E. Aronoff, Joseph H. Astrachan, Timothy S. Mescon, and Yong-Heum Park, all of
whom are faculty members/administrators at the Michael J. Coles College of Business, Kennesaw
State University. We also wish to thank the blind reviewers for their insightful comments and sugges-
tions. A very special thanks to Paula C. Skinner for her commentary and assistance.

352