Publications
Publications
- January 2018
- HBS Case Collection
In the Eye of a Geopolitical Storm: South Korea's Lotte Group, China and the U.S. THAAD Missile Defense System (B)
By: Andy Zelleke and Brian Tilley
Abstract
This case explores Lotte Group’s challenge of how to respond to Chinese government pressure in 2017, following the Group’s February decision to transfer land to the South Korean government, on which Seoul intended to deploy the U.S.-built THAAD missile defense system. Within a week of the deal’s announcement, the Chinese government had effectively caused 23 Lotte supermarket stores in China to shut down. Concurrently, however, South Korea’s political crisis climaxed with President Park’s replacement by the less hawkish Moon Jae-in. This “B” case chronicles the mounting losses in Lotte’s China business between March and September 2017, also a period in which bilateral relations between China and South Korea began to warm under President Moon, leaving South Korea’s commitment to a full THAAD deployment in some doubt. Against this uncertain backdrop, Lotte’s senior-most executives and board members had to reevaluate Lotte’s previously strong commitment to the China market.
Keywords
Multinational Corporation; Corporate Governance; Leadership; International Relations; Decision Making; South Korea; China; Japan; United States
Citation
Zelleke, Andy, and Brian Tilley. "In the Eye of a Geopolitical Storm: South Korea's Lotte Group, China and the U.S. THAAD Missile Defense System (B)." Harvard Business School Supplement 318-023, January 2018.