Samsung seen embracing change in absence of Lee, control tower
By Cho Chung-un
10 April 2017

SEOUL (The Korea Herald) - Samsung is going through internal changes starting from working hours, to foster more creativity than efficiency.

Samsung, the nation’s largest conglomerate, is embracing changes in its corporate culture in the absence of its arrested leader and a disbanded control tower. 

The conglomerate’s financial units including Samsung Life Insurance and Samsung Card have started to ban their executives from showing up early in the morning and readjusted the start of office hours from 6:30 a.m. to 8-9 a.m., according to industry sources and Samsung officials.

The group faced a major setback two months ago following the arrest of its de facto leader, Samsung Electronics Vice Chairman Lee Jae-yong, over a political scandal. The group’s strategy office under Lee has been disbanded in connection to its role in the scandal. The office had also been criticized for exercising power over Samsung affiliates without bearing legal responsibility.

Early-morning starts had been considered a traditional way for Samsung to stay competitive in the market. The “early bird” work culture was initiated by Chairman Lee Kun-hee and the firm’s future strategy office, a control tower that had orchestrated the overall operations of Samsung’s affiliates for decades. 

The change in the work culture of Samsung affiliates was seen by industry watchers as a move to go their separate ways and make decisions via their board of directors -- probably the biggest change at Samsung so far.

Samsung Display, a panel-making unit under Samsung Electronics, has recently signed a supply contract with a Japanese company, not with another Samsung unit, breaking down its tradition of keeping the supply chain exclusive. 

“The biggest difference now is that we don’t know what other affiliates are doing,” said a former corporate strategy office member who recently moved to Samsung Electronics.

“The Corporate Strategy Office used to keep track of overall operations of units, as affiliates sought for a second opinion on their business strategy. But now everyone is on their own,” he said.

Concerns have been raised over the absence of the control tower, as it had set the direction for Samsung’s future businesses and prevented affiliates from making overlapping investments. 

With the office disbanded, Samsung might not be able to make fast and affirmative decisions about strategic growth businesses such as Samsung BioLogics, which it established six years ago. 

“I think we are okay for now with the semiconductor and smartphone business thriving. But the question is which unit will take responsibility to drive Samsung’s future businesses. ... Samsung Electronics alone cannot handle it,” the official said.  

The change, though not prompted voluntarily, could work in Samsung’s favor. 

“The role of the control tower that dramatically enhanced efficiency in management and operation in the supply chain was needed when Samsung was a fast follower and Samsung does not need such organization anymore,” said Park Ju-gun, CEO of CEOScore, a local corporate tracker.

Samsung, in fact, has been attempting to change its corporate culture, knowing that such a streamlined, hierarchical work environment no longer works, Park said, referring to Samsung’s efforts to change its office culture by abolishing the ranks of its employees, cutting office meeting hours and encouraging intra-company venture teams.

“It can actually work for Samsung at this time when creativity is prioritised, not efficiency.” 

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