Go to contents

Samsung Seeking Solutions

Posted June. 01, 2005 06:46,   


“Let’s look back on what we’ve done wrong and why people disapprove of us.”

Chairman of Samsung Group Lee Kun-hee recently ordered presidents of Samsung affiliates to find out the reasons why Samsung is criticized as “Samsung’s solo play”; “Samsung Republic”; and “Samsung State” in an earnest and frank manner.

Chairman Lee reportedly asked presidents to search specifically for what is behind the disapproval and how to deal with it.

Samsung, a flagship Korean company, began to reflect on the paradox, being recognized as a global corporation with high competitiveness and being denounced domestically.

Chief Executives Set to Discuss-

Samsung Group will hold a meeting at 8:00 a.m. on June 1 at the conference hall of the Samsung Building on Taepyeong-ro, Jung-gu, Seoul, presided over by Lee Hak-soo, CEO and Head of Samsung Reformation Headquarters, to find out the reasons why the public takes such a dim view of it, and ways to address the criticism. Some 20 presidents and nine team leaders of the Reformation Headquarters will participate.

Usually, an invited lecturer presents a theme for about an hour and the panel discusses it for half an hour, but, this time, participants will exchange their views fully without a lecturer.

The presidents of Samsung subsidiaries were busy drawing various opinions about the company from public leaders in an effort to dig up ways to improve the company’s corporate image. Head of the Reformation Headquarters Lee is to report the results of the meeting directly to the Chairman.

The incident involving opposition from Korea University students who demonstrated against the conferment of an honorary PhD to Chairman Lee provoked the meeting to deal with sensitive issues.

“Since the incident at Korea University, public opinion in general has been on Samsung’s side, yet some civic organizations and the media have denounced the company,” said an official of the Reformation Headquarters. “The company concluded that the whole population is not in favor of it.”

Inside Samsung, some express complaints saying that despite the contributions the company has made to the economy through exports, the media tends to accuse Samsung of its negative aspects about corporate governance and non-unionized labor structure.

A company insider pointed out that phrases like “Samsung State”; “Samsung Republic”; and “Sweeping Samsung” are loaded with emotional bias.

Samsung has significant weight in the Korean economy in both quantity and quality, making up 20.7 percent of the country’s exports and 22.4 percent of aggregate market value of domestic listed stocks.

What Is the Problem?

The Samsung Group is wary of the criticism about its tactics to bring in influential figures and talent from the legal sector, government offices, and the media sector.

An executive of Samsung complained that “in the ‘bringing in talent at all costs’ company strategy, narrow views on recruiting policy are hard to understand.”

The problem is that to attract talent, Samsung offers revolutionary treatment that rival companies can hardly afford.

“It is a positive approach that companies provide due treatment to talent at a time when a talented labor force has yet to be formed,” said an official of the Federation of Korean Industries. “But if Samsung used personal connections to influence government officials and the legal and media sectors, it is problematic.”

Varying Opinions on the Company’s Indisputable Lead in the Economy-

Vice President Lee Soon-dong, the head of Samsung Group’s public relations team, expressed concerns over too much restraint on the company, saying, “Samsung became the number one company not by winning competition inside the country but by rising from global competition.”

A former executive officer said, “When Samsung works hard, creates more jobs and pays more taxes, that is doing good for the country.” He advised that “even though Samsung did not become the biggest with the help of the government, it needs to take care of other companies who lost the competition.”

A senior official of the Ministry of Finance and Economy once said, “CEOs of Samsung should be careful in running the company with the mindset that their wrong decisions may disrupt the whole economy.”

While giving Samsung credit for its important role in the economy, the financial sector holds the view that some Samsung officials’ arrogant and self-righteous attitudes led to the criticism the company faces today.

Young-Hae Choi yhchoi65@donga.com