This study examines the major features of Chatman`s Diagram, well known to us as a universal model of narration in literature, and the directly-opposed perspective to understand it. The characteristics of accepting Chatman`s Diagram in Korean academia and the effectiveness of it in understanding Korean literature are also studied. Agencies of Chatman`s Diagram have comprehensive semantic category like the process of practical understanding of readers. This diagram is regarded as a basic model that can be applied to special context and to all narrations flexibly. The mode of understanding this diagram can be diverse according to the position one takes. That is to say, understanding can be different depending upon whether one takes author-oriented position or reader-oriented position, or whether one trusts the narrator or not. Considering Korean modern literary history, the application category of narrative diagram including implied author seems to be wider than Western cases. If we do not consider the correspondence between the writer living in real actual life and the one who is writing the literary work, we, as reader living in current times, can understand only a fraction of the characteristics of Korean modern literature which covers the turbulent modern history of Korea. Furthermore, going through the process of considering the narrator and implied reader via narrator`s mind, or some personified objects, is helpful to understand modern poetry that have multi poetic narrators and inconsistent imageries. Consequently, it will be better for us, who live in this modern times, to adopt the comprehensive approach, rather than restricting meaning-category about any concepts or acting subjects in the narration, in understanding complex, diverse and ever-changing modern society as well as the literary works that reflect it.