The Paradox of Samsung's Rise

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The article of Tarun Khanna, Jaeyong Song, and Kyungmook Lee: The Paradox of Samsung’s Rise, published by Harvard Business Review on July 2011, defines a unique situation of a company in competing in international market and becoming a world leader.

Samsung is one of a company which can successfully combine the best-of-both-world best practices, from its Japanese roots and western practices, such as from the United States. As a second successor of the company, Lee Kun-Hee was not satisfied with Samsung being only the leader in its domestic market. Having the Japanese electronic producers surpassed them in global competition and the rise of domestic wages home, Lee knew that he needed to do something to win the game. The key to success is to outperform through the agility, innovation, and creativity that the Japanese companies are reluctant to adapt. At that time, Lee came up with the solution of a new management initiative, taken from Western best practices, aiming at improved marketing, R&D and design, while keeping the core competencies in manufacturing, continuous improvement, and plant operations.

The mix strategy was formed in three general ideas; adapting to the most appropriate Western practices, creating an open-minded way of thinking by bringing out insiders and sending insiders abroad, and Lee’s direct intervention to ensure the stability of the company, which slowly but smoothly form the so called Hybrid Management System which brought Samsung to its glorious time.

The case of Samsung can be considered as unique. Not only that the company exposed to major changes (such as compensation and promotion system based on seniority), initiated by a persistent leader of the company, but also it was able to overpass the cultural difference from different countries where the company took its best practices from. The support from the leader was constant. The fact that Lee did not underestimate how uncomfortable the change would be, carefully made him focus...
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