First-class companies, third-class politics?Samsung Electronics is a company that sells the most smartphones in the world, is leading the high-end appliance market in the United States and acquires high-tech foreign companies to secure new growth engines. It is also the company that the American IT industry fears the most and the Chinese electronics industry wants to surpass.
Nevertheless, Samsung Electronics is not first class. See how it is entangled in the Park Geun-hye and Choi Soon-sil scandal. When the owner is investigated by the prosecutors for giving money to political powers and the headquarters is seized and searched a number of time, the company cannot be considered first class.
In 1995, Samsung Chairman Lee Kun-hee said, “Korea’s economy is second class, bureaucrats are third class and politics is fourth class.” But the second-class economy has been caught up in fourth-class politics. It was forced to contribute money in return for holding off retaliation.
The New York Times reported that the Blue House had urged the vice chairwoman of CJ to resign and wrote, “That recording, too, raised memories of South Korea’s authoritarian past,” referring to Park’s father Park Chung Hee and Chun Doo Hwan. The economy has grown gloriously since the authoritarian era, but politics remained the same. Companies have changed so much. In the old days, companies benefitted from contributing money to the administration. They gained business interests and grew by taking advantage of government’s favoritism.
But things have changed. Large corporations cannot survive by doing domestic business only. The global market is rapidly changing with the digital revolution. “When you doze off, you die away.” The government cannot provide much backup or benefit.
On Samsung’s acquisition of connected-car supplier Harman International, the New York Times wrote, “Companies like Google are investing heavily to invent the automotive future as General Motors and others bet on risky start-ups. This deal suggests there are safer ways to play a mega-trend in the making.”
“Apple should have scooped up car tech firm Harman International before Samsung did,” says CNBC’s Jim Cramer. Samsung is acquiring tech firms in order to occupy the future IT market. Samsung Electronics knows very well that it won’t be able to maintain current dominance unless it takes a leading position in IoT, AI and future-generation automobiles. The company is trying hard to become first-class. If politics cannot help, it shouldn’t put a strain on it.
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