Samsung regroupsThe Samsung Group delivered its plans for overhauling the company, but the decision went further than anyone expected.
Chairman Lee Kun-hee will resign and his son, Jay Y. Lee, executive director at Samsung Electronics, will start at the bottom of the company’s overseas operation.
The group’s core brain trust, the Strategic Planning Office, will be dismantled and the chairman’s hidden assets will be used for a good cause after he has paid his taxes, the group said.
“I am disappointed because the company still has a long way to go and there is so much work to do, but I will take the blame for past mistakes,” Lee said in a press conference.
Samsung’s reforms appear to have taken on board most of the suggestions put forward for improving the company structure and management.
Samsung has experienced dramatic growth under Lee’s leadership over the past 21 years.
Under management goals set by Lee, Samsung’s sales have snowballed by 10 times, profits by 75 times and market value 140 times during Lee’s tenure.
The group has become the nation’s top-tier business group with a brand name that is firmly established in the global business world.
But the glory has been overshadowed by darker past dealings. Prosecutors have uncovered hidden assets and questionable financial accounts under the names of the company’s top executives.
The chairman has taken the blame for that and stepped down to make a clean breast of things.
But in what direction will Samsung go now? Samsung has lost its commander, a man who demonstrated great leadership.
The group also has to say goodbye to its past reputation for success, an era in which it flourished by selecting growth engines and maintaining focus.
Now the company has no choice but to form a loose solidarity among its affiliates and autonomous operations. Samsung said each affiliate can now operate its own management with more autonomy, but it does not sound so assured at this point.
The future is still uncertain.
All successful companies have their own DNA flowing through their corporate veins. When Samsung Electronics’ market value first exceeded that of Sony, Lee did not allow any room for self-congratulation.
Instead, he said: “It sends chills down my spine whenever I think how we are going to survive five or 10 years from now.”
Samsung’s future will not be entirely bleak if the company keeps a firm grip on its spirit, its hunger for challenge and its instincts for survival.
There’s an old Korean saying that says only a big wind can help us distinguish healthy trees from sick ones.
No single top-class company has reached the highest possible echelon without going through challenges and pain.
We expect Samsung to bounce back and become a truly world-class business player.