Samsung: A Management Revolution

Reaction Paper

Samsung: A Management Revolution

Reymark C. Malit

University of the Philippines Diliman Extension Program in Pampanga

MGT 201 (Theory and Practice of Management)

Dr. Emelita C. Kempis

June 17, 2017

SUMMARY OF THE ARTICLE

Samsung: A Management Revolution (Source: Business Week, February 1994) is an article and a business review that provides information and interpretation about what happened in the business of Samsung Group in the year 1993. The article reveals how Samsung started as a trading company had grown into becoming one of the world’s leading electronics companies, which specializes in digital appliances and media, semiconductors, and system integration. The text also shows how the Samsung Chairman Lee Kun Hee changed the structure of the whole group including its reporting relationships, management mechanisms, and employee empowerment. The article demonstrates how the people in the Samsung group resisted the management revolution and how Lee persisted and succeed in the implementation of this change.

REACTION TO THE ARTICLE

This portion aims to evaluate the Management Revolution executed by Samsung Chairman Lee Kun Hee and to synthesize and analyze the strategies and techniques implemented in the Samsung Group alongside with the course’s (Theory and Practice of Management) basic concepts, theories, and practices of management. This part also intends to give critical thoughts and factual arguments about the practices implemented in Samsung.

One of my initial reactions to the article was I am amazed with the level of assertiveness that I saw to the Chairman of the group in revolutionizing the management of the whole organization of Samsung. Considering that the group is already well-thought-out as the Korea’s most successful business conglomerate, Lee Kun Hee can just continue the business’ competitive advantage without insisting any change to the organization. In my perception, this assertiveness of Chairman Lee Kun Hee is quite dangerous for the whole organization as it may bring big risk and may induce instability. However, upon knowing the status (incompetent and unreliable) of the group’s other businesses like its consumer electronics’ subsidiary, it became clear and understandable to me why Chairman Lee is showing this kind of aggressiveness in revolutionizing the management of the business conglomerate. There are business reasons why the chairman is executing this level of insistence to recreate the billion group’s culture like restructuring investment priorities, redeploy its product expansion and marketing strategies, and fundamentally improve quality.

Initially, the organization used to have a hierarchal and inward looking way of management which was instilled by its founder, Lee Byung Chull. This management style is a traditional approach of management. When the younger Lee took over, he began to delegate more authority and give more active decision roles to the senior management of the company. In my perspective, Lee wants to transform the management into a modern style approach which is far different from the status of the company that time where one man rule was implanted. Given the circumstances, Lee Kun Hee’s firmness made it possible to introduce new management styles to the organization, despite the company’s traditional management style which was initially practiced in Samsung Group. According to topmanagementdegrees.com site, implementing modern management style to the organization makes management less hierarchy and promotes more collaboration and efficiency. Also, many of the top companies today are engaging in using these modern management styles in order to achieve and encourage teamwork, creativity, and boosting overall employee happiness (topmanagementdegrees.com, n.d.).  I think Samsung will have an advantage with this management revolution given the right implementation. Giving the top managers the authority in decision making can enhance their leadership skills to be competent in this kind of business. Engaging in innovation is also making an extra mile ahead of other competitors that makes the company to the top.

However, I have also found that this management revolution in Samsung did not spread over easily even the new management style Lee stimulating is beneficial. The idea of change per se complicates everything. In my viewpoint, it is reasonable that people resist change because we resist making changes in our way of life and it is likewise in our nature that we fear things that are uncertain. Based on the book, Management 11th edition, people resist change in an organization because it can be a threat to them. There are various reasons why change is not in the organization’s best interest. These include uncertainty, habit, concern over personal loss, and the belief on an individual that the change is not beneficial to the company. First reason is uncertainty. Typically, change replaces the known with uncertainty. Another reason that causes resistance to change is habit. For an individual to adapt to the environment’s complexity, we tend to rely on habits or programmed responses. It becomes a source of resistance in situations that we encounter change when we respond based on our habits. The third reason of resistance is the concern over personal loss. The more the investment they made in the current system, the more they resist to change. People used to fear the loss of economic benefits that they value such as status, money, authority, friendships, and personal convenience as part of their security needs. The last reason of resistance is the belief of an individual that the goals and interests of the organization will not be compatible with the change. Change is constant and also an organizational reality. Organizations face those changes due to different internal and external factors that create the need for change. Likewise in the case of Samsung, the resistance to change in its management is indeed predictable because the company was not able to cope up with the changes. But there are several suggested strategies to deal with the problem of resistance to change. These include education and communication, participation, facilitation and support, negotiation, manipulation and co-optation, and coercion. Samsung was able to invest in education and communication. These investments can help minimize the employees’ resistance to change by making them educated enough to see the advantage of change in their workplace like Samsung (Robbins & Coulter, 2012).