Culture, Goal-Oriented Communication (Leadership), and a Fast Growing Organization: the Case of Samsung Electronics

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Culture, Goal-Oriented Communication (Leadership), and A Fast Growing Organization: the case of Samsung Electronics Hur, Chulboo, Professor Emeritus, Myongji University, Seoul, Korea and Adjunct Professor of Business Management, Yanbian University of Science and Technology, Yianji, Jilin, China Mobile phone 010-9872-7492, e-mail: chulhur@hotmail.com and cbhur@mju.ac.kr

Summary
In response to the globalization and rapid economic growth of China, the Korean economy has transformed itself. A few Korean firms, spearheaded by Samsung Electronics, have successfully driven the economy, even if the Korean economy has difficulty in the ‘nut cracker’ situation. The success of Samsung Electronics has been attributed to the strategies of ‘selection and concentration,’ ‘successful restructuring following the IMF crisis,’ ‘long-term vision and unprecedented risk-taking strategy,’ ‘speed management,’ ‘world class brain management’ and ‘successful benchmarking of both Japanese and American management,’ among others.

But in regard to Samsung’s strategies, cogent questions need to be examined. For example, would any Korean firm be able to apply the same strategies as used by Samsung Electronics, and produce the same success? No one could confidently say yes to this question.

Samsung Electronics has dramatically achieved a successful transformation between 1987 and 1999. We argue that this is the result of Mr. Lee, Kun Hee (the ex-CEO of Samsung Group)’s strategic learning leadership and its resultant paradigm shift, and that this can be applied to the emergence phenomenon of complexity theory that provides the momentum of evolution of the corporate cultural and/or core competence. The paper explores the dynamic process of this phenomenon.

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Introduction: Korean Economy and Samsung Electronics

After three decades of rapid industrial growth, in itself a dramatic transformation from the poverty-stricken agricultural economy of 1961, the Korean industries became exposed to the predicament of borderless competition as well as the threat of the formidable super-speed chaser, the Chinese economy. In the time between Korea’s acceptance as a member of the WTO in 1992 and the IMF Control of the Korean Economy in December 1997, pessimism was high among the Korean leading circles regarding the future of the Korean firms and the economy.

Nut Cracker Theory of the Korean Economy

(Maekyung Booze Allen & Hamilton Report, July 1997)

Japan

10.22

2.8845, 4,029, 3.5696

Korea

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China

2.35, 5.7994, 6.09, 5.8399

2000 World Bank estimated GDP ratio in black color 2007 IMF estimated GDP ratio in Red color 2007 US CIA estimated PPP adjusted GDP ratio in blue color 2000 World Bank estimated PPP adjusted GDP ratio in violet color

*The figures have been corrected in this diagram from the author’s 2004 article

But miraculously, the Korean economy has partly escaped the “nut cracker situation,” thanks to a few large firms spearheaded by Samsung Electronics. For example, three Korean firms were selected in the Fortune 100 companies in 2006. They were Samsung Electronics, LG, and Hyundai Motors. But this year, Samsung Electronics

was listed as the only Korean firm with US$92.26 billion in sales in the Forbes 100. It

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is ranked 6th among Asian firms, following Toyota, PetroChina, Mitsubishi, UF Financial, and Bank of China. Samsung electronics ranked 3rd in the Info Tech 100, in the 2007 Businessweek scoreboard, following AT&T and Hewlett Packard.

Four Chaebol groups were responsible for 48% of the country’s exports, 49% of the Seoul stock market, and 42% of GDP based on sales in 2004. And in 2008,10 major export products from Chaebol groups account for 61.1% of the nation’s total export (ChoongAng Daily, Feb., 6, 2008).

The Korean Economy Pulled by 4 Chaebol Groups
ChoongAng Daily, April 29, 2004

The major Korean firms exhibiting global competitiveness are centered on the...
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