Samsung Electronics streamlines organizational structure

Samsung Electronics' office in Seocho-dong, southern Seoul [NEWS1]

Samsung Electronics is streamlining its structure to make it less bureaucratic and more meritocratic, doing away with minimum years needed for promotion and collapsing two senior positions into one.

The dramatic move puts the company at the vanguard of structural reform for large Korean companies seeking to become more competitive in the cutthroat global markets, though it fell somewhat short of its original plan, which would have done away with most ranks.

The move, announced Monday, is due to come into effect in January.

Under the new system, it will be possible to grant promotions more quickly to strong performers.

The company, Korea's largest, has four Career Level (CL) grades: CL1 (assistant), CL2 (professional), CL3 (senior professional) and CL4 (principal professional).

To move up the ladder, at least eight years of service are required in a rank.

This minimum stay period has been done away with and has been replaced with tests. Under the new system, a 30-something employee could become an executive, which is above CL4.

With 280,000 employees, Samsung Electronics is the biggest employer in Korea. It will trial peer-review performance evaluations in an attempt to achieve more textured, objective assessments.

It will also be merging two ranks -- executive vice president and senior vice president -- into the executive vice president position to simplify the organizational structure.

In devising a new structure, the electronics maker has been holding workshops with Change Agents (CAs) -- employees who focus on improving corporate culture -- and executives for weeks.

Referring to colleagues by job title will be discouraged, and markers of rank will be abolished. Employee ID numbers, which can be used to identify when the person started working for the company, and job ranks will no longer be shown on the company's intranet.

Employees will all use honorifics to talk with each other, a break from the practice where only junior workers would do that for those higher than them in the organizational structure.

In October, the company abolished all position titles of employees, excluding Group Leader and Section Leader. Employees now refer to each other with the suffix "pro." Job titles can't be found at all on the company's intranet, email system or internal messenger app.

BY PARK EUN-JEE [park.eunjee@joongang.co.kr]