The Paradox of Samsungs Rise

TE A M A Z I M P RE M J I
 Agenda and Introduction

Started by a Japanese person as off as a trade

export company in Korea
It operated under a traditional Japanese system
and now largest entity in South Korea
How a Japanese Tradition Strategy was mixed
with Strategy from the western world is
discussed ? Un-releated diversification with
Synergy in Vertical Integration?
Samsung Business Portfolio
Visual Display
Semi-Conductors
IT Solutions
Cell Phones / Mobile Communication
Digital Appliances
Digital Imaging
$305 Billion revenue in 2014 ($22.1 Billion
income) Reliance Case
How were they profitable ?
Story behind their Success

Use of Hybrid strategy- Adopted western strategy and mixed with Japanese traditional strategy

( Wait Check resistance get feedback adopt)

Striving for excellence in all department- Marketing, production, IT, Finance and specially in HR
Implementation of western strategy on Japanese strategy
The authors stated in a very logical and chronological way illustrated by many examples how
Samsung has become one of the most successful globalize and also an example for other
emerging companies.
Strategy #1
Identify, adapt and implement most appropriate Western best practices into their
traditional Japanese System

Strategy HRM
Strategy #2
Steady and Constant efforts made Samsungs Culture more open and undergone change

Bringing Outsiders inside: Sending insiders outside:

1990s : International Recruiting Officers (IROs) Send high potentials to many parts of the world to
were sent abroad to familiarize themselves with receive training via Regional specialist program
foreign talents.
Establish relationship with prominent local figures
1997: Global Strategy Group (GSG) members
consisting of non-Korean graduates of top Western Identify new opportunities in the global market
businesses undergo 2 years training (language)
before being assigned to Comprehensive understanding of countrys regulation
work in Samsungs subsidiary at their home and tax system
country.

2002: CEO Yun instituted a formal mentoring

program
Strategy 3#
Intervention by chairman Lee Kun Hee to protect long term goals from
short-term financial pressures
Long term investment on Global Strategy Group (GSG), which reports directly to the CEO
a lot of compensation into the projectsand spent $100,000 annually to train and support
each regional specialist
Samsung established and funded the Samsung Art & Design Institute in collaboration
with Parsons the New School for Design in New York to find best designing talents.
Following that lead, SEC has established design research institutes in the United States,
the United Kingdom, Italy, Japan, China, and India. Each year SEC sends 15 designers
abroad to prominent design schools for one to three years to learn cutting-edge trends
Challenges:

Implementing western practices slows progress of the company

Unsettling result
Requires a long process due to tightly knitted nature of the company
Cultural fit is hard for outsiders who are not familiar with the system
Cultural and social tension
Benefits Gained:
Diversified workforce
Better strategic decision making
Enable Samsung to develop strong regional connections and expertise
Discovering areas for opportunities
Knowledge transfer when individuals sent out coming back to operate in home
country
Learning from this Case:
In order to drive the business, changes are mandatory in business
model in order to align with globalization & technology
evolvement
Not just Management level, change must be engaged in all
employee levels
Companies need to analyze/predict future while taking strategic
business decision
Diversified workforce is required to bring a larger pool of ideas
and practices for future improvement
Adopting Home countries HR practices anymore isnt an viable
option when company goes global