News Column

Samsung Electronics under pressure to reinvent itself

August 8, 2014



The company is in somewhat of a Catch-22 when it comes to changing its culture.



As its smartphone sales stutter and a generational leadership succession looms, Samsung Electronics Co Ltd is under pressure to reinvent itself - to be more innovative, but not lose the rigor and focus that made it a global powerhouse.







One effort this summer to foster a more worker-friendly environment and a more creative culture is to allow staff at its main Suwon campus south of Seoul to wear shorts to work at weekends. Working hours are more flexible, and female staff can take maternity leave without worrying about job security.







The flagship of South Korea's dominant conglomerate, or chaebol, is also trying to address shifting cultural values at home by curbing some of the excesses hardwired into corporate Korea. Forced late-night drinking sessions, long a staple of local office life, are out. "It's 1-1-9 for evening company outings now: one type of alcohol, in one place and only until 9pm," said a Samsung employee in his eighth year at the firm. "Younger staff are no longer forced to stay, and the senior workers will be careful not to upset their subordinates," he said, asking not to be named as he was not authorised to speak to the media. Samsung last month posted an unexpectedly sharp drop in second-quarter earnings, squeezed by falling market share in smartphones, and with no obvious driver in sight to reverse the decline. Chairman Lee Kun-hee, 72, who has famously managed Samsung with a sense of "permanent crisis", remains hospitalised following a May heart attack.







The ascension of his son and heir-apparent, the Harvard-educated Jay Y. Lee, 46, could be a breath of fresh air, but effecting wholesale change in the way the sprawling company operates would be a Herculean task and could prove a mistake.







"The company is in somewhat of a Catch-22 when it comes to changing its culture," said Jay Subhash, a former senior product manager who left Samsung in April.







"It desperately needs to adopt a culture that fosters openness, creativity and innovation. But doing so would jeopardise its greatest existing cultural asset, its militaristic hierarchy, which enables it to operate at lightning speed to outpace the comp wetition."







Samsung has long emphasised the need for creativity while hiring more foreign talent as it operates in increasingly diverse markets. Along with relaxed rules on work hours, it stresses a "Work Smart" philosophy to reduce unnecessary time spent at the office. .


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Source: Khaleej Times (United Arab Emirates)


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