SAMSUNG: THE RISE OF KOREAN GIANT

SUBMITTED BY:
SHRAVANI P
IMSc IX th sem
2018DPY27
DEPARTMENT OF PSYCHOLOGY

SUBMITTED TO:
Dr. VIJYENDRA PANDEY
ASSISTANT PROFESSOR
DEPARTMENT OF PSYCHOLOGY
CENTRAL UNIVERSITY OF KARNATAKA

COURSE TITLE: ORGANIZATIONAL BEHAVIOR

Samsung is one of the world's largest electronics and advanced technology

corporations. The business focuses on creating and manufacturing goods for a wide
range of markets and businesses, including integrated systems, electronic gadgets,
memory chips, and digital media. In addition to manufacturing army equipment, the
company also engaged in construction projects. By producing almost 5% of South
Korea's total exports, the business has become one of the most recognisable names in
the technology industry.
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On March 1st, 1938, Lee Byung-Chull established Samsung as a trade store for
groceries. Chull established his company in Taegu, Korea, by importing simple things
produced nearby and selling them to customers in China. After the Korean War, Chill
expanded the company and began producing textiles, eventually becoming Korea's
largest textile manufacturer. Chull and his business received backing from the Korean
government because of their commitment to the industrialization sector and their desire
to aid the nation's development after the war.

Following the demise of Lee Byung-Chull in 1987, Lee Kun-Hee succeeded him.
Samsung was divided into five firms; the electronics division remained under the
direction of Lee Kun-Hee, and the other four businesses were led by additional sons and
daughters of Lee Byung-Chull. Later on, the business established its own research and
development center, which was responsible for numerous breakthroughs in a variety of
industries, including aerospace, genetic engineering, chemicals, semiconductors, and
electronics. Samsung's dominant position in the South Korean economy, in Lee
Kun-opinion, Hee's had led to a culture of complacency, and the company lacked the
foresight to compete globally. Under what Lee called a "new management" model,
Samsung mandated that subordinates point out mistakes to their supervisors, and he
famously told Samsung executives, "Change everything but your wife and kids." It also
emphasized product quality over quantity, promoted women to higher executive
positions, and opposed bureaucratic procedures.

Samsung's continuing entry into the international electronics markets in the

1990s was motivated by Hee's transformation of the company's culture. Those years,
despite the company's prosperity, also saw a number of business scandals, including
bribery and various patent infringement lawsuits. Nevertheless, the business kept
making strides in terms of technology and product quality, and a number of its
technology products—from semiconductors to computer monitors and LCD
screens—climbed into the top five places in terms of global market share.
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The 2000s witnessed the birth of Samsung’s Galaxy smartphone series, which
quickly not only became the company’s most-praised products but also were among the
best-selling smartphones in the world. Samsung also supplied the microprocessors for
Apple’s earliest iPhone models and was one of the largest microprocessor
manufacturers in the world in the late 20th and early 21st centuries. Since 2006 the
company has been the top-selling global manufacturer of televisions. Beginning in 2010,
the Galaxy series expanded to tablet computers with the introduction of the Galaxy Tab
and in 2013 to smartwatches with the introduction of the Galaxy Gear. Samsung
introduced a foldable smartphone, the Galaxy Fold, in 2019.
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QUESTIONS:

1. What enabled Samsung to prosper under Lee Kun- Hee's direction?

In 1993, when Samsung's electronics sector was in trouble, it announced "new

management." Lee Kun- Hee's "New Management" project, in a nutshell, aimed to raise
the caliber of Samsung's goods and improve every aspect of the company's production
process. For instance, Samsung established a system that promptly shuts down a
production line when manufacturing flaws are found following his 1993
pronouncement. With the use of this approach, according to Samsung, its defect rate in
1993 decreased from the year before by at least 30%. Lee issued the order to burn
150,000 wireless phones made at Samsung's Gumi plant in North Gyeongsang province
in order to make a statement that he would not put up with poor goods in the face of
growing criticism of the company's wireless phones.

Samsung claims Lee had a significant impact on the organization's hiring process. More
than 280,000 people worked for Samsung around the world as of the end of 2019. He
instructed Samsung to hire people based on their abilities and job capabilities, not on
their educational background or gender. He has emphasized how crucial it is for the
company's management to find and develop talented personnel. He adopted a human
oriented leadership style, which reflects the Korean sentiment.

2. How did Samsung succeed in becoming a global brand?

The extensive study done by Samsung to understand how people approach and use
technology is one of the secrets to the company's success.
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As a first step toward globalization, Samsung changed its corporate identity in 1993. It
updated both the group's and its own logos. The words Samsung Electronics were put in
the new logo in white on a blue background to symbolize stability, dependability, and
warmth. The name Samsung Electronics was written in English so that it would be
simple for people all over the world to read and remember. The logo's circular shape
symbolized a moving globe and stood for progress and change.

Samsung came to the realization that in order to build a worldwide brand, it needed to
alter consumers' impressions of it as an OEM player and the low-tech nature of its
products. In developed regions (like the US), consumers frequently chose Samsung over
Sony and Panasonic when their budgets did not allow it. Samsung made the decision to
concentrate on product design and release cutting-edge items in order to alter
consumer perceptions.

Samsung participates actively in every area where it conducts business and is aware
that cultural differences can be subtle. Samsung thinks that comprehending and
addressing local demands is essential to producing the greatest experience, regardless
of local preferences, customs, or eating habits. Because of this, localizing products is
essential for Samsung to achieve its objectives.

Samsung has established Lifestyle Research Labs around the globe to predict future
lifestyles and identify areas for innovation. These labs explore human needs and values
beyond product behavior, taking into account anything from the changing nature of the
family to job, education, and broader societal and cultural trends.
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3. Discuss the HRM practices in Samsung.

The core principles of the Korean management system and interpersonal interactions
inside Korean firms have been profoundly impacted by Confucianism, which has had a
tremendous impact on Korean values, attitudes, and behavioral conventions.

Samsung adheres to a standardized operating principle. They invest in human talent

and technological advancement to produce top-notch goods and services that will
benefit the global community. It is noteworthy that "human talent" is included in
Samsung's corporate concept first. Given that they understand that people are the core
of any business, they have been concentrating on fostering employee growth and
development from the company's inception. By fostering a self-regulatory and
innovative atmosphere, employees are encouraged to realize their full potential.
Samsung values employee diversity and prohibits all forms of discrimination, including
those based on colour, age, gender, sexual orientation, ethnicity, impairments,
pregnancy, religion, political leanings, union membership, country, or marital status.
Samsung offers training programmes based on three pillars—Core Program, Leadership
Program, and Expertise Program—tailored to various career levels and roles for all
employees worldwide. These programmes aid in future progress. According to the
objectives set by the employees themselves, Samsung performs achievement reviews
of the yearly performance of its workforce. It then uses the findings as a starting point
for choosing, developing, and promoting leaders. The organization conducts
achievement assessments in terms of work process and results as well as competency
evaluations in terms of individual competencies and career management to manage
their performance, which eventually strengthens the organization's competencies.
Samsung continually strengthens its compliance management system in order to create
a compliance culture—the fundamental component of corporate social
responsibility—and makes legal compliance the cornerstone of all business operations
and decision-making by updating all training and systems. In addition, a compliance
programme is set up to increase accountability in human rights and EHS while reducing
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management risks that could result from issues like price fixing and intellectual
property rights infringement.

4. What are the organizational challenges faced by Samsung today?

The technological industries are becoming more competitive as a result of the quick
advancement of technology, particularly in the smartphone sector. Along with Apple,
Samsung also has to contend with rivals like China's Huawei, Xiaomi, and Vivo. These
more affordable, smaller smartphone competitors are providing handsets with powerful
functionality. Samsung announced a new trade-in programme as one of its approaches
to meet this challenge. In exchange for upgrading from their old phone to a new one,
this programme provides Samsung users with a fantastic discount.

The lack of uniqueness and cannibalization are Samsung's other problems. The
company's decision to produce a number of cellphones on a constant basis is what has
led to this. Mobile phones from the company are comparable to those made by other
businesses. Because of this, the company now lacks individuality. The company's sales,
revenues, and even market share consequently decline as a result of this. Due to this,
the Samsung Company has seen increased losses. Since it results in the corporation
making more losses than profits, this problem has an impact on the company's future.
Within the company, HRM plays a variety of functions. The first is that it hires and
oversees personnel. Additionally, it helps to organize how the workers' benefits are
provided. Additionally, it contributes to the creation of business improvement plans.
Human resources may provide the business with critical guidance through these tactics
on how to lower cannibalism and win back customers. Additionally, human resources
play a part in preparing workers for new positions by teaching them the duties and
expectations of those positions.
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5. CSR is important for a company's brand reputation, appeal to clients, staff, and
investors, talent retention, and general commercial performance. What are the
few strategies adopted by Samsung in regards to CSR?

People, quality, change, honesty, and co-prosperity are among the things that Samsung
values most in its business, according to their company values (Samsung Values). The
company's ideals serve as the foundation for Samsung's business practices.

Samsung is dedicated to delivering a corporate social responsibility. Samsung focuses

on these several areas, including social responsibility, environmental protection, public
health, and business growth. Through worker education and empowerment, labor and
human rights, employee health and safety, support for charities, waste reduction, and
environmental protection, Samsung supports local communities (Samsung Corporate
Social Responsibility, 2017). The way that Samsung approaches corporate social
responsibility is based on the ideals that the firm upholds as a whole, including
promoting equality, giving back to the community, supporting local nonprofits, and
giving employees access to resources they gain via training and empowerment.
Through its corporate initiatives, Samsung demonstrates its CSR in certain ways. Each
employee receives benefits and a total of around 78 hours are spent in training. We
observe Samsung's sincerity and commitment to its employees through their education
and employee empowerment programmes . Through education, Samsung encourages
young individuals to develop their independence, self-awareness, and self-support. In an
effort to improve the conditions at nearby community child care centers, Samsung
opened its sixth residence in Korea (Samsung supporting local communities, 2017).
These efforts from Samsung demonstrate the commitment of the firm to the
community and its readiness to put their principles above profit, thus exemplifying CSR.
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