After many years of government driven energetic economic growth, Korean economy faced an IMF financial crises in 1997, largely owing to structural problems in its financial and corporate sectors. This paper focuses the reform on corporate sector, the Korea specific firm organization known as `Chabeol`. The purpose of this paper is to evaluate and criticize the Chabeol reform policy in line with the stance of New Institution Economics. Based upon the argument, this paper makes a suggestion for the successful completion of the reform. Specifically this paper picks up 3 issues of Chabeol reform, the Big-Deal(swap of business), reducing the debt ration to 200%, and adopting the best practice of corporate governance structure. The assertion of this paper is that marker incentive scheme and arrangement of institutional setting should be articulated for the success of Chabeol reform.