Culture, Goal-Oriented Communication (Leadership)

burnish, Goal-Oriented Communication ( lead), and A troubled Growing Organization the case of Samsung electronics Hur, Chulboo, Professor Emeritus, Myongji University, Seoul, Korea and Adjunct Professor of lineage Manage handst, Yanbian University of Science and Technology, Yianji, Jilin, China Mobile ph unity 010-9872-7492, e-mail emailprotected com and emailprotected ac. kr abridgment In response to the orbicularization and rapid frugalal offshoot of China, the Korean economy has transformed itself.A few Korean unbend commensurates, spearheaded by Samsung Electronics, have victoriously driven the economy, even if the Korean economy has difficulty in the globe cracker situation. The success of Samsung Electronics has been attri scarceed to the strategies of selection and concent proportionalityn, successful restructuring next the IMF crisis, persistent-term dream and unprecedented risk- taking strategy, speed vigilance, b altogether class brain caution and successfu l benchmarking of both Nipp iodinse and Ameri digest guidance, among new(prenominal)s. and in regard to Samsungs strategies, cogent perplexitys call for to be examined.Associated essay Pragmatism Over PrincipleFor example, would perpetu solelyyy Korean unanimous be able to apply the kindred strategies as utilise by Samsung Electronics, and produce the same success? No one could confidently say yes to this interrogative mood. Samsung Electronics has dramatically achieved a successful shift in the midst of 1987 and 1999. We argue that this is the result of Mr. leeward, Kun Hee (the ex- chief executive constituentr of Samsung base)s strategicalal encyclopedism attractorship and its upshot figure shift, and that this foundation be applied to the emergence phenomenon of complexity initiative that pass ons the momentum of evolution of the in corporated cultural and/or means compe ecstasyce.The write up explores the dynamic process of this phenomenon. 1 1. Intr oduction Korean Economy and Samsung Electronics after(prenominal) three decades of rapid industrial produce, in itself a dramatic slip from the poverty-stricken outlandish economy of 1961, the Korean industries became exposed to the predicament of borderless disceptation as well as the threat of the formidable super-speed chaser, the Chinese economy.In the prison term amid Koreas acceptance as a member of the WTO in 1992 and the IMF Control of the Korean Economy in December 1997, pessimism was uplifted among the Korean in the survive circles regarding the future of the Korean pie-eyeds 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 1 1 1 1 China 2. 35, 5. 7994, 6. 09, 5. 8399 2000 public Bank estimated GDP ratio in gloomy semblance 2007 IMF estimated GDP ratio in Red glossiness 2007 US CIA estimated PPP adjusted GDP ratio in patrician color 2000 World Bank estima ted PPP adjusted GDP ratio in violet color The figures have been corrected in this plat from the authors 2004 article But miraculously, the Korean economy has positionially escaped the nut cracker situation, thanks to a few too bighearted firms spearheaded by Samsung Electronics. For example, three Korean firms were selected in the Fortune speed of light companies in 2006. They were Samsung Electronics, LG, and Hyundai aims. But this course, Samsung Electronics was listed as the notwithstanding Korean firm with US$92. 26 one thousand thousand in gross gross sales in the Forbes carbon. It 2 is ranked sixth among Asian firms, following Toyota, PetroChina, Mitsubishi, UF Financial, and Bank of China.Samsung electronics ranked third in the info Tech coke, in the 2007 line of businessweek s kernel circuit card, following AT&T and Hewlett Packard. Four Chaebol conventions were obligated for 48% of the countrys merchandiseations, 49% of the Seoul stock mart, and 42% of GD P based on sales in 2004. And in 2008,10 major(ip)(ip) export products from Chaebol groups account for 61. 1% of the tribes 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 dry landly concern-wide combat ar c put ined on the following industries semiconducting stuff and nonsense units/ TFT-LCD, mobile phones, petrochemical roducts, ship military man bodying and baseborn- and medium-sized automobiles. business organisationweek (July, 2007), in cooperation with the English Inter vane Co. , report that 3 Korean firms were included in the hundred globular authorise brands value. They atomic number 18 Samsung Electronics, (21 th office) Hyundai 72nd organisation agency) and LG Electronics (97th orchestrate). Samsungs brand value increased 4% from the previous familys 15 billion dollars to 16. 4 billion dollars, just now lost one place in ranking. parent ageweek reported that Samsung Electronics is 3rd in Asia, after Toyota and Honda.Samsung is superb in LCD and high cogency reminiscence microprocessor chips, tho suffered loss because it failed to enter into the low price cellular phone market in the course 2006. Hyundai Motors pull aheaded success by jumping to 72nd dumbfound from 2005s eightieth with explicit brand strategies and aggressive strategies in the overseas market, and olibanum 3 became the 8th orbicular auto determiner. LG a standardised ascended 14% by improving brand value of 400 one million million million dollars. USA captured initiatory through 5th places, and registered 52 firms Ger umteen, 10 France 9, japan, 8 England 6 Swiss 4 Korea, 3 and Finland, Italy.Sweden, Spain, and Bermuda each listed 1 firm in the 100 brand forefingers. BusinessWeek July 2007, based on the Interbrand Co. , England Research data. 2007 Businessweek Top 100 spherical Brands Scoreboard 2007 2006 Change Brand Name 2007 Coca- Cola Microsoft IBM GE Nokia Toyota Intel Honda Samsung E. Sony Hyundai Brand repute $m 2007 65,324 58,709 57,091 51,569 33,696 32,070 30,954 17,998 16,853 12,907 4,453 Brand Value $m 2006 67,000 56,926 56,201 48,907 30,131 27,941 32,319 17,049 16,169 11,695 4,078 Pargonnt Company Coca-Cola Microsoft IBM GE Nokia Toyota Intel Honda Motor Samsung Sony Hyundai Motor MatsushitaBrand Brand in Rank Rank 1 2 3 4 5 6 7 19 21 25 72 1 2 3 4 6 7 5 19 20 26 75 unc step to the foreh Rank 0 0 0 0 1 1 -2 0 -1 1 3 U. S. U. S. U. S. U. S. FINLAND lacquer U. S. JAPAN S. KOREA JAPAN S. KOREA 78 77 -1 Panasonic 4,135 3,977 electric Industrial JAPAN 92 97 98 92 94 90 0 -3 -8 Lexus LG Nissan 3,354 3,100 3,072 3,070 3,010 3,108 Toyota Motor LG Nissan Motor JAPAN S. KOREA JAPAN Three eld earlier in 2004, Businessweek (August 916, 2004) listed plainly Samsung Electronics as the sole Korean firm in the list of 100 globose brands, and in like musical mode placed the firm in 4th place in the world(a) outperform 5 brands ( macrocosm ranking was 21st).The Weekly too published a special edition on the Samsung brand (November 29, 2004) and reported that Samsungs emulous edge came from cost reduction through alteration and world class industrial introductioners who enabled the firm to capture five world class 4 design prizes in 2004. The firm had also win over 100 design prizes betwixt 2000 and 2004. Samsung Electronics ran her own innovative design institute, and its designers took lectures directly from IDEO, the upside class US design company, and from faculty members of a US design school located in Pasadena, California.The number of the firms designers increased from 170 in 2000 to 480 in 2004, accordingly. In the following table, the 2008 Forbes global 2000 big companies are reclassified according to country. Reflecting unfavorable world trade, thither are signs of setback for the firms of traditional trading countries like Korea and lacquer in clear ratio, yet one ca n notice an increase in the number of firms in oil exporting countries and BRIC countries. For example, in terms of sales volume, Japan had 87 firms and South Korea had 24 firms in the 2007 Fortune euchre, as oppose to Frances 38, Ger more(prenominal)s 37, and Great Britains 33 firms. 008 Forbes 100, 500 and 2000 Large Companies* Countries USA France Ger many an(prenominal) Great Britain Japan China Swiss Canada Spain Italy Netherland brazil-nut tree Australia Belgium South Korea Russia Nor c entry means Finland Luxemberg Panama 100, 500, 2,000 29, 165, 590 9, 32, 67 9, 26, 59 8, 34, cxx 7, 47, 260 5+1, 12+7, 70+39** 5, 11, 37 4, 20, 59 3, 13, 28 3, 10, 37 3, 10, 24 3, 7, 34 2, 12, 50 2, 3, 12 1, 12, 52 1, 9, 29 1, 5, 14 1, 3, 12 1, 1, 8 1, 1, 2 Class I II III 5 Sweden India Taiwan Singapore Ireland Bermuda South Africa Mexico Turkey Austria Greece Saudi Arabia Portugal Denmark Thailand Israel Cayman Islands Czech Republic 0, 10, 29 0. , 48 0, 4, 41 0, 4, 18 0, 4, 10 0, 3, 25 0. 3, 17 0, 3, 16 0, 3, 14 0, 3, 13 0, 3, 12 0, 2, 11 0, 2, 10 0, 2, 9 0, 1, 14 0. 1, 10 0, 1, 4 0, 1, 1 IV 6 Malaysia United Arab Emirates Kuwait Chile Indonesia Iceland Poland Qatar Egypt reinvigorated Zealand Hungary placeistan Philippines Peru Columbia Morocco Barain Jordan Liberia Channel Islands 0, 0, 15 0, 0, 11 0, 0, 7 0, 0, 7 0, 0, 5 0, 0, 4 0, 0, 4 0, 0, 4 0, 0, 3 0. 0, 2 0. 0, 2 0, 0, 2 0, 0, 2 0, 0, 2 0, 0, 2 0, 0, 2 0, 0, 2 0, 0, 1 0, 0, 1 0, 0, 1 V *The global 2000 by Forbes. com, April 2, The Forbes 500 and 2000 figures include Forbes 100 and 500 figures respectively. *The Hong Kong figures were added to the Chinese figures. Samsung Electronics has keep its position as a leader in semiconductors for 12 historic consummation after seizing prototypal off place in the global recollection semiconductor chip sector with the introduction of the first 256-megabyte D chock up chip in 1994. The firm has been the world leader in the 8 hitec products much(prenominal) as D RAM, 28. 7% S Ram, 33. 3% chinchy Memory, 30. 7% TFT-LCD, 20. 5% Display Driver Chips 20. 5% Monitor, 15. 2% digital TV sets, 10. 6% and Mobile Phones, 14. 3% (2 nd place after Nokia, beating Motolora in 2006). The Group, in total, has 25 world outstrip products.The firm has also been the number one exporter in Korea for 12 years since 1994. In 2004, Samsung Electronics has recorded W110 billion in accumu retardd sales and W29 trillion in profits, clearing all the loss accumulated since 1973 when the firm first entered the semiconductor persistence. In the entire semiconductor industry, including non- storehouse chip sectors, the firm is the worlds spot badst chip producer following Intel, the 7 world leader. The Samsung Group contributes 21% of the earths exports 20% of the entire stock market and in sales volume, 18% of the countrys GDP.As of 2005, Samsung has 23,000 exploreers with over 2,400 doctoral degree holders pass an annual interrogation fund of 4. 7 billion dollars. In 2000, Samsung ranked 6th in U. S. A. patent right applications. During 2005 and 2006, Samsung placed 5th. and aspires to be in the top 3 by the year 2007. (Lee, Chae Yoon, 2006) Samsung Electronics revenue was over 92. 26 billion dollars coating year, but the firm recorded a 10. 3 billion dollar net profit in 2004, the 7th largest position among 9 world 10 billionaire firms. This surprised many Nipponese judging leaders, recalling the imilar phenomenon in 1999-2001, when a spectacular performance of net profit amounted to 120 billion won from semiconductors and mobile phones, at a sequence when n first all world leaders of semiconductor manufacturers recorded red ink (with the exception of GE, IBM, and Nokia. ) A bad period for chip producers worldwide, many prima(p) semiconductor manufacturers closed down their drudgery lines. The number of worldwide semiconductor manufacturers has declined from 22 in 1998 to 12 since 2004, including such famous IT leaders like Toshiba, Motorola, and Fujitsu.Samsung Electronics faced well-nigh difficulty in mobile phones in 2006, but it improved in 2007, as there were some progress in the mobile chat services. Samsung Electronics hold to begin 3rd contemporaries WiBro commercial-grade services across the United States on a nationwide floor with the service plyr Sprint and Nextel, starting in 2008. WiBro is a receiving set high-speed Internet technology that enables the transmission of data anytime, anywhere, even in spite of appearance vehicles moving faster than 100 kilometers (62 miles) per hour or on mountaintops.The connective speed is even faster than a fixed-line Internet connection. In addition, Samsung Electronics has latterly state the ripening of the 4th generation WiBro technology which is expected to exit five clock faster than the ease uply available 3rd generation WiBro system. Koreas WiBro technology, also known as mobile WiMAX, is the result of three decades of unceasing look for. As it was solely developed in Korea, it is potentially far more(prenominal) than lucrative than CDMA had been. The project was a product of collaboration between the Samsung Electronic research team and the political research lab 8 nder the governmental polity led by Minister Chin, Dae Jae, former electric chair of Samsung Electronics, all under the influence of Samsung corporate culture, exemplified by look for our next lines of air, ten years ahead The story of Koreas advance in telecommunications began in the 1970s, when the mechanistic national telephone system reached a saturation point. To resolve the problem, the Korean government decided in 1976 to develop Koreas own time category ex modify, or TDX, a form of electronic operator. With 1,060 researchers pruneing on the project, Korea became the tenth country in the world to develop her own TDX.At the helm of this project, part of his national learning means, was parking area, Jung-hee. President Park , Jung-hee, a self-educated economist, was the nations top class expert on the history of Japanese modernization since Meiji Restoration (1869). He laid the ground of the Korean industrial familiarity in 1961, following the Japanese track. He also indirectly influenced the emergence of the Korean Chaebuls and their proficient victimisation/learning processes. In 1989, the Korean government developed the TDX-10, together with the governmental research intitutes, the researchers in the Chaebol groups, and from the universities.The outcome was a more sophisticated digital operator system, and as a result, Korea could bear with to export the technology, although only(prenominal) a half of the parts used in the TDX were locally produced. However, all stages of the TDX-10, from design to software, were devised and produced in Korea. Samsung Electronics played a major part in the teachingal procecess, but we must also dividing line that Samsung alone started to hit up global ca pabilities of semiconductor manufacturing all by herself as early as 1973. The foundation of Koreas subsequent success in mobile phones was laid in 993, when Korea became the first country in the world to commercialize the code division sixfold access technology, or CDMA, imaginationually developed in the laboratory take by a teeny-weeny U. S. firm, Qualcomm. Unlike the time division multiple access, or TDMA, system used in Europe, which assigned a specific frequency for each user, CDMA allowed multiple subscribers to a hotshot frequency. The CDMA was covered by Korea because of low connection computer error compared to other technology in the Korean situation of high cosmos density, of mountainous areas and multiple concentrations of high rise building blocks. Expectations were high with the trust that the Korean firms would turn huge profits from the Koreans share of CDMA technology improvement, as countries such as China, India, and Brazil decided to adopt the system. B ut with Qualcomm carrying high royalty bearments on CDMA offset technology, its price agonisticalness soon eroded. (The Korean firms have paid over 1 trillion won or $1 billion in royalty payments to Qualcomm, the CDMA point of reference technology holder up to date. )Moreover, Europe looked to nurture her own telecommunications companies with the development of the Global clay for Mobile Communication, or GSM. The adoption of this updated version of TDMA meant Korean firms were further handicapped because the Korean firms were not able to sell CDMA technology to one of the worlds biggest cellular phone markets. In short, Korea found success by copying contrary telecommunications technology in the 1980s and by the 1990s, Korea was commercializing foreign developed technology but still had a long way to go until technological independence. (ChoongAng Daily Aug. 10, 2006)Future of Samsung Technological Capabilities In close coordination with Government, Chaebol, and university research instututes, Korea developed a revolutionary generation of mobile phone tuner Internet technology. WiBro system, the reinvigorated technology, is leading the rest of the world by years ahead. It is accepted as one of the standards by the World electronic organizations. Samsung Electronics has make trial-runs with Brazil, Venezuela, Croatia, and Saudi Arabia, and has begun entry into the US market, while telecommunication companies in Japan, Britain, France, and Italy, are showing keen interest in the technology.WiBro shall be the quaternion-spotth generation technology, if the CDMA technology used today is considered as the third generation. According to the engagement with Sprint, the US partner, Samsung Electronics will provide base stations, handsets, and chipsets. About 100 small- and medium-sized demarcation firms will participate as well. Samsung estimates that the approximate deal will produce 33 trillion won and create 270,000 new jobs. (ChoongAng Daily Aug . 9, 2006) Samsung Electronics has made serial technological sabotagethroughs, most recently in the worlds first 50-gigabit NAND bald-faced memory chip, employing a new method called the charge trap flash, or CTF.The firm is a world leader today in LCD TV, 10 mobile phone parts, and various memory chips. The CFT technology provides the foundation for entering the tera-bit 1,000-gigabit age after 2010. Dr. Hwang, Chang-kyu, president in charge of Samsung Electronics R & D Division added that Samsungs semiconductor division was different from its competitors in terms of its dual investment in facilities as well as in research and development. This year, we spent 2. 8 trillion won ($2. 9 billion) on semiconductor research and development.For CTF technology, we started to develop it five years ago and created an independent maturation team three years ago. We have 30 to 40 of these development teams, so imagine what kind of developments we can achieve in 5 to 10 years, he said. He had rosy predictions for the drachm and graphic DDR DRAM markets, saying they were diversifying and could lead to a supply shortage. Even now, Samsung is only able to meet 70 percent of the demand. Prices shall be good until 2009, he said. Samsung currently occupies 50 to 60 percent of the graphic DDR market and will provide 100 percent of the chips for the Nintendo game players, he added.Samsung Electronics developed the first 256-megabit NAND flash memory in 1999, and ever since, the company has doubled the capacity of its semiconductor on a yearly prat. The industry has even dubbed this phenomenon as Hwangs Law, an allusion to Moores Law, which states that the touch power of chips will double ein truth 18 months. NAND flash memory chips are mostly used to store data in small devices such as digital cameras and music players. The chip Samsung presented was made using 40nano technology last year, chips were made using 50-nano technology. The difference allows more semiconduct ors to be produced from each wafer.Forty nanometers is 3,000 times th knowledgeable than a human hair. It is expected that the new NANO chip would create new Flash memory chip demand worth $60. 6 billion by the year 2016 when the technology dies to the full commercial in 2008 2. Previous Research works on the Samsung rendering Samsung Electronics evolution from a fledgling company deep down a developing nation to a powerhouse global leader and technological innovator has attracted much attention from academicians and journalists, and as a result, numerous articles have documented the transformation, mostly from Samsung in-house researchers, journalists, and some 1 Japanese observers and scholars, as well as a few Korean scholars. Senior researcher Chang, renderSoo from Samsung stinting Research Institute (SERI, August, 2005) find that the Samsung Group has gone(p) through four stages of growth in an accelerated step, owing to the superb leaders of the chief operating office r and the inspiring corporate culture in which the pep pill commission work under a shared value system, exemplified by a single spirit towards a single goal. His four growth stages are as follows 1) Inauguration of the first step and foundation of the system between 1938 to late 1950s Included in this period were the turmoil and confusion of the sackful (1945), the Independence (1948), and the Korean War (1950 -1953). Samsung has started the first Japanese- musical mode public new employee figure mental test in Korean history as early as in 1957. (Recruitment of recent college graduates based on full general examinationsin order, an IQ test. ) (2) Growth from a small- and medium-sized firm to one of the large firms in Korea. It had elements of the early stages of a business group.It was the period of popular Park, Chung-hees host takeover and the launching of successive five-year economic development plans between late 50s to mid 60s. (3) ascendency to the Korean top enterprise between late 60s to late 80s. This period includes the 6th Five-Year economical Development Plan and the 1988 Seoul Olympic Games. (4) Ascendance to the global top Enterprise between late 80s to now. This period started with the transfer of the leadership from the first generation group chairmanship to the second generation group chairmanship, thereby marking new management. on that point were crises, advance from the Korean WTO participation, and turmoil caused by the IMF crisis, as well as the 2002 Korea-Japan World Cup. Chang believes that the quantum leap resulted from the superb human resources management and the overall strategies of the Samsung group. Samsung Electronics, the forerunner of the Samsung group, has gone through a paradigm shift of force-out management in the following ways 1. 2. Growth strategy based on bay window production and economy of scale nidus on seniority pay system until 1996. Survival strategies under IMF crisisemploying a merit syst em of each 12 ifferentiated salaries between 1998 and 1999. 3. Core competence based effect formation of up-grading overseas personnel and team based compensation system adopting profit sharing and stock option schedules between 2000 and 2002. 4. Further abilityening of the core competence based personnel administration aiming at solidifying the puss of the global top grade human resources. And the evolution of the human resources management has been reinforced by (1) The regional expert system for the employees to get on-the-scene(prenominal) training for one year. Over 2800 persons have gone through the program between 1990 and 2004. 2) Through Samsung MBA program since 1995, the firm conferred the master degree to some 460 persons. The program is divided into Socio-MBA and Techno-MBA programs. (3) Under the overseas genius program, over 100 full scholarship grants were awarded to top 5% level students enrolled in India, China, and Russian top universities since 1995. (4) An in-house semiconductor college was set up for 30 graduates with BS degrees, 20 graduates with get the hang degrees, and 3 graduates with doctoral degrees. (5) An in-house manufacturing technology college was set up for the retraining of 100 overseas guides. 6) Five to six week courses for the functional expertise genteelnessal programs were set up to provide training for some 700 specialists in the field of finance, planning, procurement, merchandising, and personnel administration. Autographic writer Hong, Ha Sang (2005) sketched 16 Samsung top managers, both in Korean and Japanese. He emphasized, similar to the opinions of many Japanese journalists, that the troika leading the Samsung transformation consisted of (1) Chaiman Lee, Kun Hee, (2) a group of passe-partout managers, and (3) the heart for Structural Realignment.Cho, Tu ingest, Professor of Yokohama National University and former Professor of Nagoya University in Japan with Yoon, Chong-sup, his Ph. D. student and a researcher of SERI, wrote a concord in Japan titled, Samsung strategy to technological capability technological learning process towards global business, based on Yoons dissertation 13 (2004). Their research is bear on on a single business entity, an perfect cluster comprised of four Samsung companies. They are Samsung Electronics, Samsung SDI, Samsung Corning, and Samsung Electricity.And their classification of the technological learning process includes the following four stages (1) Absorption stage It took place in the early 1970s in a declining industry of black and white TVs, tuners, cathodes, tubes, DY and FBT. Samsung relied on a simple assembly line technology of joint venture partners, such as Sanyo, necrotizing enterocolitis, and Corning. But Samsung also intensified its technological absorption, having its engineers attempt to reverse-engineer beyond the level of formal technological cooperation by penetrating into the tacit knowledge behind the explicit knowledge. The firm implemented strategies of producing the parts domestically kinda than simply relying on the importation of parts from partner companies. Samsung Electronics also established the vertical integration of the electronic products, even starting to export black and white TV sets to Japan on OEM basis. Depended on the Japanese technology. (2) opposition stage It started in the late 70s as it evolved into color TV set assembly. Samsung had developed some level of maturity in technological capability through reverse- design. And as a result, Samsung could take ver some of the conclusion power of the joint ventures. (3) Improvement stage It took place in 80s, a rapid growth stage for Samsung technology in the area of large size flat panel TV including large size CPT, CTD, and CRT. Samsung became self-sufficient in designing numerous precedents and developed mussiness production technology. The firm could export plants and compete with overseas manufactures of color TV sets with its own R&D division. Samsung diversified its products including the development of an overseas sales network. (4) Innovation stage. The 90s and beyond marks the development of high efinition TV and digital TV. Samsung solely developed TVs of an original concept, such as thin TV sets. Samsung could enjoy the freedom of cross licensing, strategic alliance, and it could export products on her own brand, through her own network of overseas production bases. The book does not deal with semiconductor technology capability building, because Samsung had to build the capability all alone, as no ground time outing nations were willing to provide assistance in the sensitive area. However, the corporate culture of strategic 14 learning has been preserved and documented. When Korean technological and ducational capabilities were poorer in equivalence to that of advanced nations, Samsungs intense in-house higher educational system continued to benchmark themselves against the GE in-house educ ational system, and Lee, Kun Hees genius management provided many utile solutions. Professor Kim Shin proposed a strategic model of Samsung in comparison with Toyota Motors. (June, 2003. Japan Korea Association of International counseling, Tokyo. ) Samsung Electronics World rank 3rd in IT, Fortune ranking 115th and Financial Times, 67 2002 records th Toyota Motors 3rd in Auto, Fortune ranking 10 h Sales, 40. 5 billion Net profit 7. 25 bil. (Won) 14. 5% of total South Korean export Sales, 16 billion Net profit, 1. 4 bil (Yen) Management strength Superior adaptation motivation human to resources, lurch, high flying work Positive adaptation to change, Rational management based on lovesome community spirit JIT inventory management Unique management concept Digital convergence Production mode Production of multiple products in small amount Production of multiple products in small measure Japan is in trouble but Toyota is an exception bodily number Digital go around StrategyGloba l HRM, increase the number of the world crush products and affectionate Globalization, Concentration on and sustained cost reduction R&D friendliness Chang, Se-Jin (2008) also compares Sony and Samsung, the winners of both analogue electronics and digital electronics centering on strategies and HRM. Journalist/writer Lee, Chae Yoon (2006) compared Samsung and Toyota in a similar manner He observe that Toyota benchmarked Ford to overcome the adverse productivity rate of 8 to 1 as early as 1935, and again in 1949, and, in that process, Toyota developed what is known as the Toyota Production System, or Just In Time 5 (JIT) and Kanbang system (zero inventory), all contributing to the Toyota Way. He also ascertained that since 1987, Samsung has benchmarked GE and Toyota in the development of world best products, speedy decision making, and R&D and securities industry strategies. A senior consultant and an expert on the Korean industry, Midarai Hizami ( ) from the Nomura Research In stitute of Japan discovered that the strength of the Korean business system reform lies in the dexterity of the Samsung Electronics decision making mechanism, which was lacking in the Japanese firms. (2005) He observed that Mr.Lee Kun Hee, in power, was making important decisions, and the system of external board members and board of directors was nominal in the corporate governance. He summarized that the uniqueness of Samsung Electronics was due to (1) the corporate chairmans unique ability for judgment and leadership, (2) existence of a corporate strategic center called the inwardness of Structural Realignment, (3) delegation of power to superior managers and their compensation system, and (4) business projects based on strategic marketing viewpoint. Finally Midarai proposed that the Japanese company reform planners had to be mindful of the Samsung system.A business consultant and Chairman of Japan Debate Association, Kitaoka, Doshiaki (? ), published a book titled I am afra id of Samsung documenting a year long delve series on the threat of Samsung and how the Japanese firms could roll back. He concluded that Mr. Lee Kun Hee was a genius, who had an exceptional gift in both technology and management, and who would concentrate solely on long- dictate strategic research to command outstanding think tanks and watch dogs called the Strategic Realignment Center and the Samsung Economic Research Institute.He also argued that, with Mr. Lees long-range strategic view, sprightly decision making, and enormous scale of resources allocation, Samsung could have overrun all the world top class giants of the Japanese electronic firms when the IT bubble collapsed in 2002. He felt that the Japanese CEOs were handicapped because they would stay in their positions for a relatively short term (2-3 years), while Mr. Lee, Kun Hee could stay in his office for life, thereby able to formulate long-range strategies for Samsung.He argued that the Koreans were so dogged that t hey were posing a potential threat to the future of the Japanese firms. 16 Hasekawa, Tanashi ( ), management professor of Kyotokakuen University, contributed an article to Nikkei Business Monthly Magazine and commented that the Samsung quantum jump from Koreas best to global leader was dependent solely on Mr. Lee Kun Hees leadership. (July 11, 2006) He observed that when the global IT bubble collapsed in 2000, Samsung surpassed the poorly do Japanese electronic firms including Sony, and became a global IT power.In the process, Mr. Lees New Management became the leading vehicle of the transformation process. According to Dr. Hasekawa, ex-CEO Lee Kun Hee. lead the Samsung innovation even before the Korean economy was crushed by the 1997 liquidity crisis, by taking the shareholders seriously, putting em grades on the transparency of management and accounting, personnel management based on ability, and the introduction of an annual wage system. In addition, he observed that the Cente r for Strategic Realignment, in cooperation with Mr.Lee Kun Hee and the professional managers, played key roles in information gathering, sense-making, and planning in an organic manner to effectively operate the overall business. An example can be found in the merging of the semiconductor and telecommunication business units. The decision to select and concentrate on three major areas, namely electricity-electronics, finance-trading, and service, has provided the basis for the Samsung jump into a position of global power. 3. DiscussionThe points of Chang, Sang Soos (SERI, August, 2005) four stages of growth, the jump from the Korean top to the global top based on the superb leadership of ex-CEO Lee Kun Hee and the superb corporate culture of upper managements shared value, exemplified by a single mind towards a single goal, is well unsounded in a post facto analysis. But his marriage offer of a superb human resources management, outstanding educational system, and retraining syst ems can be develop understood as an end result of the strategic means quite than as the actual cause of the transformation.After all, most of the leading global firms of Japan, USA, and Korea share similar characteristics with Samsung. Nonetheless, it is possible that Samsung has simply benchmarked itself against these rival companies, stand out them even, in regards to these specific factors. Although Chang, Sang Soos proposal could be understood as a occurrence of novelty, with a serendiptious effect resulting from its organisational development techniques. However, Samsungs transformation has not been a transient phenomenon. 7 In fact, Kim, Chang and Lee,s comparson of strategeis and HRM is not sufficient to explain the rapid change processes of Samsung. And many writers make a point to emphasize the rapid and timely decisions made by Lee, Kun Hee in regards to the speedy growth process, as well the leadership undeterred by outside inteference. Samsung, at its inception under the leadership of Mr. Lee, Byung Chul (founder and the first CEO of the Group), had been an ardent follower of Japanese Management. Mr.Lee received his education from Waseda University in Japan before WWII, and was famous for his annual Tokyo Conceptualization He would stay in Tokyo at the beginning of every year in order to learn firsthand the forecasts of the coming year as made by Japanese journalists and economists through TV and mass communication media. He also had a Japanese girl friend in Tokyo. Also, he carefully studied the Japanese governments new year economic plans and new year strategies for major Japanese corporations.He would in person follow through this information with Japanese experts and leading Japanese man of affairs friends. He, then, would collect necessary books and articles and return to Korea to encourage his top managers to read the bodily before formulating each years strategies and planning for the entire Samsung group. In addition, they also examin ed the forecasts made by the Korean experts. Mr. Lee, Byung Chul was not only the first generation CEO for Samsung but also one of the pioneers of the contemporary business community of Korea.Partly we can state that Samsung Group is an outcome of the Korean governments modernization effort to transform the economy from one of the worlds poorest agricultural economy to an advanced industrial economy under President Park, Jung Hee between 1961 to 1979. However Samsung had been a forerunner of a small group of successful large corporations who quickly grew to keep pace with the rapid growth of the national economy. It was well known that President Park, Jung Hee, the architect of the Korean economic miracle, had tho most studied and became one of the Korean op level experts on the Japanese industrial enterprise history since the Meiji Restoration. But General Park was not oddly favorable towards Samsung from the beginning of May 16, 1961, the date of his military coup detat. Rather he was hostile, in the early days of coup, toward all the Chaebol or fat men because of his concept of socialistic and Confucian justice, at the time, reflecting the general sentiment of Korea and the ever tiny Korean mass communication. General Parks economic development policy was greatly influenced by socialistically oriented economist Park, 18Hi Bum, the then dean of Commerce College, Seoul National University, and they agreed to mobilize capital from the rich families including the Chinese restaurant owners in Korea. Furthermore, the Military Government staged a currency reform with disastrous results. The compositors case provided Mr. Lee, Byung Chul from Samsung Group momentum to stage a personal confrontation with General Park (who then was elected to the Presidency of Korea) in 1963, and persuaded President Park with a plan of industrialization of import substituting, export oriented growth policy, and the normalization with Japan.Lee, Byung Chul contributed an article on the same idea of Korean economic development plan to Hankuk Daily composition in Seoul, then, owned and operated by Deputy Prime Minister of Economy, Chang, Ki Yung. In the earlier phase of Korean industrialization, there was serious debate among the scholars and policy makers of Korea, with forceful arguments that Korea should build agriculture first before industrialization, because Korea had no basis of industrialization at all.These models were available in Taiwan and Denmark. And Denmark educated agricultural economist Yoo, decaliter Young and Max Weber economist Choe, Moon Whan, both from SNU, who were in turn personally tutoring President Park, who would later formulate Saemaul movement to change the Korean farmers culture, in the manner of McClellands achievement motivation education from Harvard, in order to develop an agricultural economy without much material investment. Since Mr.Lee, Byung Chul and President Park, Jung Hees meeting, President Park decided to take Mr. Lee, Byung Chuls Japanese style of the industrialization first policy with a Weberian push, in addition to his all-out effort on the export oriented industrialization projects and thereby attained the Han River miracle. But in the process, he delayed the ever mounting public desire for democratization and ended his life tragically in October 24, 1979, with his famous last words, spat upon my tomb later. After a few years of trial and effort, President Parks economic plan was more or less settled around the US educated econometrician Nam, Duk Woo, an engineer oriented bureaucrat Oh, Won Chul, along with the use of the history of Japanese industrialization as the main text edition after normalization with Japan in the mid 60s. Also, his policy line did not deviate much from Samsungs first CEO Lee, Byung Chuls 9 original 1963 proposal. Along the same line of thought, Hong, Ha Sangs (2005) sketching of Samsungs top professional managers can also be taken as providing the necessary con dition for the transformation because all leading OECD global corporations have plenty of top level professional managers similar to Samsungs genius management. But the genius does not mechanically yield global management. Anyway, Mr. Lee, Kun Hee, in a way, has adopt American style management on top of his inherited Japanese style management with a Korean color, by recruiting global scale top managers with engineering backgrounds, which is rare in traditional Korean managers unless the founders also have engineering backgrounds.Because of business closely linked to the governmental economic development plan at the same time to deal with every level of governmental Confucian feudalistic heritage, most of the top managers from large corporations have consisted of economists and jurisprudenceyers to fence with the governmental or pseudo governmental interference and for lobbying purposes. Mr.Lee, Kun Hee maintained groups of lawyers and economists, but he stepped aside from the Kor ean conventional practice and recruited professional top managers from a combined elite of engineering and business specialties and encouraged them to break away from their traditional conservative bureaucrat nutshells and exhibit their high level entrepreneurship of experimentation including a certain a latitude of failure toleranceNikkei Business weekly magazine, (July 14, 2006) maintained that Samsung power originates from passion and solidarity, and this was the very aspect that was abstracted in the Japanese firm. It was pointed out in the article that the strength of Samsung human resources management can be found in the strength of regional expert development program to strengthen Samsung marketing in strategic regions such as China and India, as well as in the potential growth markets, like France and Italy.The missing link was not fully described in the article regarding the passion and solidarity behind the superb HRM. The question remains What makes the top managers and employees deeply moved with this burning passion? A Korean diplomat, who was stationed in Japan for a long time, wrote a very persuasive book in Japanese, contrasting the two different cultures of Korea and Japan Park, Seun Moo, Sunbi (humanity scholar-poet-politician) and Samurai (sword man-scholar-politician), 20 Tokai University, Japan (2004). hotshot aspect of contrast can be seen between emotive idealism and cool headed pragmatism. And there are some scholars and businessmen in Korea who can harness the Korean passion and emotive sinew into the productive Korean style business management Lee, Myun-woo, Create W conjecture of Korea, 1969 (as oppose to McGregors X system and Y theory and Okuchis Z theory or Americanized Japanese theory) and Lee, Chang-woo, Han Management, 1992 (Harness Long strangled emotion, Han, 1994) Chin, Dae-jae, Manage Passion, 2006 The secret also lies in the American style competitive compensation system.In the words of Mr. Lee The incentive system is the greatest excogitation of the century, turning the tide favorably for capitalism, vis-a-vis socialism where the top managers annual income is roughly several times higher than that of the comparable top managers in Korea, and the system runs down throughout the Samsung system to the very bottom. Cho, Tu Sup and Yoon, Chong Sups joint work narrates the learning and maturity process of Samsungs technological capability. The work is descriptive of the past track, but it is limited in causal analysis.However, the strategy of technological capacity has been the core of the Samsung organisational learning in the age of globalization, the first comer takes all. There is no place for the second comers,-all translated into the catch phraseincrease the number of the world best products. Also, Samsung observers do not fail to mention the prosperous triangle of Mr. Lee, Kun Hee, the Center for Structural Realignment, and the outstanding abilities of elite top management groups, as the s ource of the Samsung transformation from the Korea best to the global best.But Japanese observers tend to put more emphasis on the outstanding leadership of ex CEO Lee, Kun Hee. There are at least three books published by a group of Korean journalists and a writer. They are Samsung Rising Why Samsung Electronics is Strong, (2002, Hankuk Economic Daily) Lee, Kun Hee, by Hong, Ha Sung (2003, Hankuk Economic Daily), covering the period presently after the Samsung Spectacular Performance between 1999 2002, and a slightly critical autobiography by Kang, Jung Man, titled Lee, Kun Hees Era, reflecting increasing criticism of Mr.Lee because of a no union policy and a suspected immoral deal in the process regarding his property inheritance for his son, etc. (2005, Personality and Thought) 21 What has Samsung achieved in the process of organizational transformation that made a paradigm shift to facilitate an essential part of the Korean-style management? In other words, what kind of model or models could be applied to explain the transformation processes of Samsung Electronics and Samsung Group? There are at least three models, which can explain the change process of Samsung.These are Strategy models such as R&D strategy and core competence models. Organizational theory models such as HRM, leadership, learning and culture Knowledge management model But each of these models can only provide a overtone explanation of the dynamic processes of organizational transformation indoors the Samsung Group. Strategy models R&D strategy and core competence model There is the effect of equifinality, one of the concepts of General Systems Theory and/or contemporary complexity theory) in most of the successful firms strategies and outcomes.All the global leaders have similar strategies in the large framework of aspiration towards global leadership. The question is, how does one attain them. Almost every Chebol group with better technological leadership adopted a similar strategy when South Korea signed the WTO membership in 1992, but only Samsung has reached the goal(s). The simple contrast cannot explain the dynamics behind the quantum leap of Samsung from a developing nation status to the advanced nation status of Sony, Erickson, and Motorola, the established leaders of the industrialized countries.Samsung can be better compared to the NEC case of 1980s vis-a-vis GTE. C. K Prabalad and Gary Hamel (Harvard Business Review, 1990) observed that top executives will be judged on their ability to identify, cultivate, and exploit core competencies that make growth possible. And Mr. Lee is the right person in that capacity for Samsung. GTE 1980 Sale 1988 Sale $9. 98 billion $16. 48 billion NEC $3. 8 billion $21. 89 billion 22 In 1988, GTE has become a telephone operating company with a position in defense and lighting.GTE has divested Sylvania TV and Telenet and put switching, transmission, and digital PABX into joint ventures. In the same year NEC has emerged as a world leader in semiconductors, consolidated a position in mobile telephones, facsimiles, laptop and mainframe computers. As early as in 1970, NEC communicated her strategic check of computer and communication convergence (C&C) both internally and externally. The NECs strategy has been adopted by most South Korean firms as the Government proclaimed in 1983, the 1st year of the Korean info Age.Samsung Group has concentrated her whole effort towards the strategic intent of world best and increase number of world best products. Its organizational culture is simplified in this precise catch phrase and quick communicated to every corner of the system. According to the authors Prahalad and Hamet, The most powerful way to exult in the global competition in the 80s were top executives ability to restructure, de-clutter, and de-layer their corporation, but in the 90s on, they will be judged on their ability to identify, cultivate, and exploit the core competencies that make growth possible.And this was merely what Mr. Lee did since the beginning of his chairmanship. Samsungs successful transformation in the last decade or more can be explained from successful organizational change and innovation model and/or leadership model and/or strategy of core competence building model and/or knowledge management model and more. But it can be enveloped into organizational learning, centering on transformation of organizational culture and cultivation of core competence. almost observers attested that Jack Welch started from restructuring to reform of organizational culture, but Mr.Lee went the other way around because the very unfavorable Korean socio-cultural environment and the 1997 IMF crisis have facilitated the process. forthwith under Mr. Lee, Kun Hee the leadership of the new Korean management style is a blend of both Japanese and American styles of external labor market and differential compensation and no life long employment, with the element of te Valleys revolutionary spirit. And it is also actively benchmarked by many Korean firms, as observed by Professor Lee Byung Chul (2002).There are indications that Japan, too, is groping reluctantly towards a new model. 23 After all, many aspects of the Japanese cultural model can be considered as a reflection of globally small firms in the stage of rapid growth, rather than the uniqueness of the culture. A new glide path is recommended to tap culture holistically and lengthwise instead of by simple snapshot of two firms for better causal explanation as practiced by political scientists, communication scientists, and sociologists relying on secondary sources of data too. Samsung leadership under Mr.Lee has gone through a systematic, dynamic, organic and nonlinear process of leadership of strategic or headed organizational learning centering on core competence building. In the global arena, prevailing firms are inversely inspired by a competitive mutual benchmarking process among the world best firms. And it is observed that, of late, Samsung and Toyota are mutually benchmarking. (Lee, Chae Yun, 2006) Recently, Mr. Lee stated, in the presidential meeting of Samsung corporations, we dont need top executives who are copying someone elses ideas and strategies. As many of our products are in the leading positions in the global market, we lost the target to benchmark or imitate. Samsung must strive towards a unique and secern creative management. With negotiation on FTA with U. S. A. for an accelerated domestic market passing and with China making a big stride in the global market, we are faced with both crises and opportunities. We must discover and cultivate a creative management system and creative personnel. (Hankyung Economic daily, June 28, 2006) As many observers have attested, Samsung Electronic has the elements of GE and Toyota.It is natural that any firm among the global leaders would attempt to benchmark the best practices for the best performing companies. But one should not overlook the fact that there is an organic approach in the Samsung word fusion. Technological capability advancement, strategies of marketing and finance, and the process to permute into market taste of design are simultaneously used to break through the barriers of bureaucracy, or the tyranny of the small business unit, as pen by Prabalad and Hamel (1990). Bureaucracy is the greatest invention of the Industrial Revolution.The knowledgeableness mystifys of economic science and sociology, Adam Smith and Max Weber, respectively, described the merits in an elaborated manner specialization and division of labor. How to retain the merits of the system and at the same time reduce the inherent problems of delay and red tape? In 1992, Mr. Lee was awarded the Korean Management Prize 24 of the Year at Korea University by the largest Korean business professors academy, The Korean Association of Business Administration. In his acceptance speech, Mr. Lee said in a slow a nd hesitant voice, I was once approached by a Japanese engineer at Kimpo Airport.He said that Samsung Electronic developed a high tincture DRAM no sooner than the time when the Japanese rivaling company announced its own development. Our production was 6 months delayed by Samsungs inner paperwork. So, for the next time, I assembled every concerned party so that we could announce the next generation chip simultaneously with the world big leaders, and finally we beat them. This was exactly the way how the late President Park handled the problems by regularly holding the Blue House Expanded Presidential merchandise Expansion meetings.Quite a few Japanese specialists on Samsung have observed that Samsungs strength lies in the fact that Lee, Kun Hees term of office is indefinite, allowing him a free hand to delve into long range opportunities and strategic visions, while the Japanese CEOs term of office lasts only 2-3 years, on average. This reminds us of the similar observations mad e by American scholars in the 70s and 80s. The Japanese CEOs were obligated to satisfy the major shareholders, the bank, whereas the American CEOs had to satisfy shareholders every year.However one should take note of the Samsung golden triangle in terms of its dynamics. Kang, Woo-ran, SERI (2006) conducted a survey to find that the Korean firms with Owner CEO- Professional managers combination out-achieved, as compared with Professional CEO only model or Owner CEO only model between 1986 and 2004. Michael Porter (1996 2004) suggested that the often acclaimed strategy of Japanese management was nothing but operational effectiveness. The Japanese businessman quickly caught up with the American businessman in a relatively short time span, between the 1960s and 1980s.In the process, Japanese firms exhibited core competence and accompanying Japanese best practices. They were recaptured by the American scholars in the form of new management theories Total look management, 6 sigma manage ment, MIS network linked inventory-delivery systems, lean management and restructuring, knowledge management, benchmarking, organizational learning, to name a few. So the Japanese firms proportional advantages have been shared by many global firms in a slightly differentiated manner. 25 4.Culture, Goal Oriented Communication (Leadership) and A Fast Growing Organization, Samsung Electronics Samsung Electronics, the centerpiece of the Samsung group, market value was only 420,680 million won in 1987 when ex CEO Lee, Kun Hee assumed the chairmanship. Ten years later in 1997, it was 3,996,909. 66 million won or roughly 950% increase. That is not bad. But from that time on, there has been a steep acclivity of the market value of 12,179% increase of 91,671,138. 128 million won in 2007. One would naturally be tempted to ask, What happened to the leadership of the first 10 years with ex-chairrman Lee, Kun Hee? Sams u ng Electro nics food market V alu e (1,000w o n) 12 0,00 0,0 00,0 00 10 0,00 0,0 00,0 00 80 ,00 0,00 0,0 00 60 ,00 0,00 0,0 00 40 ,00 0,00 0,0 00 20 ,00 0,00 0,0 00 Name 1980 1981 1982 1983 1984 1985 1986 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 Name Samsung Electronics Market Value (Unit 1,000 won equals roughly 1 to 1. 30 US Dollars) 1983 63,350,000 1989 1,640,470,000 1984 76,950,000 1990 1,318,439,793 1985 137,500,000 1991 1,328,438,858 1980 41,440,000 1986 308,000,000 1992 1,587,069,540 1987 981 59,500,000 1988 1982 64,400,000 420,680,000 1993 1,020,330,990 1994 6,272,521,240 3,013,541,426 1995 9,052,186,755 2001 44,932,513,615 2006 1996 3,579,480,030 2002 51,542,526,788 2007 1997 3,996,909,660 2003 73,785,248,588 1998 10,918,438,172 2004 73,174,129,278 1999 44,086,251,261 2005 108,281,475,740 2000 25,544,557,299 26 2006 0 101,254,538,541 91,671,138,128 Key Figures Representing Changes in Samsung Group in 20 historic period Unit Sales Trillion Won 1987 17 2006 152 Ratio 8. 9 Profit Tax Before 0. 27 14. 2 52. 8 Market Value 1 140 140Export 9 663 73. 7 Brand Value 100 dollars million None 169 (2007) N/A tot of Employees 10,000 men 16 25 1. 6 Source Samsung Greoup PA Office Materials, Feb. , 2008. examine through the observervations made of Samsung Electronics rapid growth, one factor clearly emergesthe ex-CEO Lee, Kun Hees leadership as the success factor including his bold and swift large scale investment decisions at key junctures When there was a debate over DRAM and SRAM, it was Lee, Kun Hees decision concerning DRAM, difficult to develop, but with he promise of a greater potential market. And the decision turned out to be a very wise one. When Samsung started to build Kiheung semiconductor lines, it was immaculate in 6 months while similar lines would take one year and a half in the overseas cases. Chang, Sang Soo (2005) observed that Samsung Group has gone through 4 stages of growth in an accelerated pace based on superb leadership of ex-CEO Lee Kun Hee and superb c orporate culture of upper managements shared value a single mind towards a single goal. It indicates that Samsungs global technological capability development has been possible due to the transformation of corporate culture as one of the pillars of Samsung global competence. So the leadership in transforming the Samsung culture and core competence by Lee Kun Hee has created the paradigm shift. 27 To understand Lee Kun Hees leadership, the comparison of first and second generation corporate culture is in order. Over the years, Mr. Lee, Byung Chul an ardent Japan learner had shaped Samsung as a rational bureaucratic model under a fragile and prophylactic Korean economy.Korea did not have any capital, so the government obtained good quality loans and grants from the USA, West Germany, Japan, and World economic organizations, and in turn provided loans to selected Korean firms under the condition that the firms use the funds to set up industries within the guideline of the Government P lans. The interest rates were at international level, but the Korean market bank loan rate was several times higher under the high inflation rate, and thus the economic developmental loans were highly covetous in Korea.And this is one of the sources of the blame on the Chaebol and rich families receiving the governmental special favor, or the politician-capitalists corruption suspicion to date. Having neither technological nor managerial capabilities, most Korean firms exploited the cheap labor from the agricultural sector, at the same time attempting to build scale economy as sources of international competition emphasizing quantity in light industry and new and primitive petro-chemical and heavy industry. And Mr. Lee, Kun Hee emphasized quality over quantity in his first statement soon after his chairmanship inauguration.Against such backdrops, Chang, Sang Soo compared the first generation and second generation corporate culture as follows Change of Samsung Core Values premier Ge neration Corporate Culture (1938-1987) (1988 1993. 3) Second Generation Corporate Culture 1993. 3- to date Second set up Fathers Doctrine(1993) Dedicate to the human society through the best Founding Fathers Doctrine (1973) Contribute to nation through business Put priority on human resources Seek rationality Samsung record (1984) Creativity High ethical standard Be Number one in the nation Perfectionism Co-prosper anpower, technology and the best services Samsung Spirit (1993) Co-prosper with customers Challenge to the world Create future Core Value (2005) precession on human resources Aspire to be the best Leader of change Righteous business management 28 Co-prosper Principles of Management (2006) Stick to principles of law and ethics Maintain clean corporate culture Principles of Business Management Respect customers, stockholders and employees Respect environment, safety and health Fulfill social duty as a corporate citizenFrom the chart, we can examine the Samsung aspirati on to be the leader of the industrial age in the first generation substructure fathers culture of rational bureaucracy, and the transformation of the second founding fathers culture as the leader of the globalization and digital and/or knowledge economy. In a similar vein, reporters from DongA Daily Newspaper depicted the change of corporate culture as follows Change of Samsung Corporate Culture Past Minimizes Risk Taking New InvestmentPresent Put dialect on Taking a New opportunity Failure Decides after a Through Internal Decision Making Down office staff Strong Management Management Management Staff Step away from the Operational Staff Decision Control size Delegated Decision First recognizing Investigation Culture Staff of Making while Financial System is Retained Conservative Emphasizes Process Rationality in Every expatiate DongA Daily Newspaper, June 4, 2004 Image Evaluation Emphasizes Speed Emphasizes the Outcome Mr. Lee, Kun Hee has received positive CEO training from h is father for 21 years before taking over the position.He and his father-in-law, a lawyer and owner of ChoongAng Mass Communication, were ever present at his fathers staff meeting, usually during lunch hours. He could not retire from his office until he personally confirmed that his father was in bed. Mr. Lee, Byung Chul had chosen Mr. Lee Kun 29 Hee, the third son, against the conventional Korean tradition of passing the reins onto the eldest son, because the first son had a solemn disagreement with his father. The second son was talented in business, but Mr.Lee Kun Hee was more futuristically oriented, even forcefully starting his own hi-tech venture in the early days when Korean technology was at an infantile stage.. Leadership Styles Compared Mr. Lee, Kun Hee went through CEO training from his father, but his leadership style is so different from his father, though sharing some similarities. Mr. Lee, Byung Chul emphasized the importance of personnel management and human resourc es, and he also mentioned that 80% of management dealt with the question of how to manage persons.He personally participated in the recruitment process in examination problems and personnel interviews, and at times, personally selected topics for group discussion in the viewing process. Mr. Lee, Kun Hee expanded the inner labor market of selection and promotion systems to open system for the external labor market in recruiting outstanding personnel and managers. His father, a strict time keeper, who enjoyed talking, was concerned with every detail of the Business operation. His father practiced regular walks around management and was strict in awarding prizes and punishment for the subordinates.In contrast, Mr. Lee, Kun Hee is a good listener and often repeatedly asked, why? why? why? He rarely came to his office in the company building and mostly delegated his authority to his professional top managers, and confined himself mostly in his electronic fortress called Seungjiwon, mod eled after Microsoft CEO Bill Gates work place/residence, and developed long range visions of strategies for Samsung, specializing in a comprehensive and long range gatekeeper role. His organizational management has a flavor of human touch. He is a night worker and his sleeping hours are irregular.Although he confined himself in Seungjiwon, he gets instantaneous high qu