Samsung marks 20th year of `new management initiative`

It has been 20 years since Samsung Group launched its "new management initiative." Samsung Electronics Chairman Lee Kun-hee announced new management in Frankfurt, Germany in 1993, saying, “Let’s change everything except wives and children." Back then, product quality and brand recognition of Samsung was almost second to bottom in global market, even though the company was recognized as number one to domestic customers.

Chairman Lee aggressively moved forward with restructuring diverse areas such as product, service, human resources and management style, emphasizing “To enhance quality, any plants or production line can be stopped.” Thanks to its ceaseless innovation, Samsung has achieved 13 times revenue, 47 times before-tax profits, and 44 times market value over the past 20 years.

While Samsung is leaping to a global leading player, Korean economy has entered an era of “low growth and low employment." The situation becomes worse if we exclude the high-performing effect of Samsung Group and Hyundai Motor Group. In last year, the two conglomerates earned half of total net profits made by all 499 domestic listed companies, excluding financial institutions.

Chinese corporations are trying to catch up with Korean competitors, while Japanese businesses are also striving to revive. Economic structure biased to large corporations and the manufacturing sector, low labor productivity, and inflexible employment market are hurdles for our future. Only when equipped with crisis management leadership as well as dedication and passion of employees, Korea can realize its “Second Miracle on the Han River.” Other companies should learn the lessons from what Samsung has shown since 1993.