The organizational boundaries of housebuilding firms in Korea

Abstract

This paper investigates the boundary of activities undertaken by Korean housebuilding firms. First, it examines the contractual relationships between housebuilding firms and contractors, focusing on the existence of quasi‐firm type organization in the Korean housebuilding industry. Second, it looks at how far Korean housebuilding firms diversify into other activities outside the industry. Secondary data analysis and an interview survey, carried out over the period between 1980 and 1995, were used. The results show that Korean housebuilding firms depend on a traditional contractual relationship with contractors but that quasi‐firm type organization is not established. On the other hand, housebuilding firms diversify into both related and unrelated business. This diversification could be a short‐term ‘survival strategy’ under a regulated environment rather than a long‐term ‘growth strategy’.