Samsung Electronics' Management Style

Keywords: samsung management strategy, samsung change management

Samsung Electronics is a Korea-based consumer electronics company. The truth describes Samsung's trip from a company focused on creation to 1 known for the excellence of its product design. It talks about the way the company came to use design as a differentiator and for competitive gain. It details the steps that Samsung got on the folks, process, and system fronts to boost its design functions. The situation also talks about Samsung's design philosophy, and ends with a brief discussion on the utilization of design as a competitive benefits.

Like all companies in the business of high tech, Samsung must bring ground breaking products to market faster while guaranteeing high quality and possessing down costs. It is also faced with the task of working with global business lovers and its particular geographically dispersed facilities. Samsung's strategy for meeting its quest of "technology-based value creativity" relies greatly on what it phone calls an electronic convergence revolution. This revolution features two parts: an electronic product development infrastructure (affecting design, validation and manufacturing) and digital collaboration.

According to Balogun. J and Wish Hailey. V there are four types of proper changes namely Version, Reconstruction, Evolution and Revolution. Through the changes that Samsung underwent it'll be highlighted the way in which to company changed, whether the change was done over time or whether the change was all of a sudden implemented.

Samsung shows signs or symptoms of Reconstruction. Reconstruction is a rapid change and it may involve a great deal of confusion but it generally does not require a important paradigm shift in the way the company does indeed things. (Balogun. J and Anticipation Hailey. V, 1999)Reconstruction may be a turnaround situation where there is a need for a significant structural change or a major cost cutting program to deal with declining financial shows or changing market conditions.

Yun and his management team made a decision to take steps that would push Samsung from it a precarious budget. Therefore he reconstructed the business by layoff of 30, 000 employees which symbolized one third of its entire labor force. This major cost reducing programme was done in order that they could easily get out their debt. Yun and the management team also made a decision to close down many Samsung factories for two months in order to remove their unnecessary inventory that did not sell.

Yun and the team also made major changes when they sold off two billion us dollars well worth of businesses, like pagers and electric coffeemakers, that have been perceived to be marginal relevance for the firm's future. These types of changes helped the company regain their loss which was a significant structural and financial dependence on the company. Yun wanted to implement a strategy that would separate Samsung of their challengers. Therefore he forced the firm to build up its products rather than coping these products of other businesses that were developed.

Yun placed a lot of focus on the introduction of products that would impress the customers with the attractive designs and advanced technology. Therefore Yun was reconstructuring the way Samsung is doing business and sought the company to reach higher specifications where they can be regarded as a quality brand and contend with the bigger companies. Because of this Samsung reconstruction underwent a significant design turnaround from a inadequately designed product to a product that will be an in-house design.

The next major step that Yun got was to recruitment of new managers and engineers, many of whom experienced developed extensive experience in america. The recruitment of managers and the engineer's possessed a significant turnaround due to the fact that this allowed them to get started on developing their own products and be innovative. Then also discarded Samsungs seniority-based system to a merit-based system for developments.

A merit-based system derive from one's performance meaning that the employees could feel more open to expressing their suggestions to help the company reach its goals with the knowledge that they can be rewarded for it. Therefore this turnaround helped the company to have a much better relationship with their employees and create something that would allow them to feel available to share their ideas and creativity.

Another major change that Yun made was to hire a marketing whiz, called Eric Kim, which worked well hard to create a more upscale image for the business and its products. Eric carried out a major turnaround when he shifted Samsung's advertising away from 55 different advertising organizations throughout the world and then he placed them into one firm. The explanation for this change was to create a consistent global brand image for Samsung's product. He therefore received Samsung out of big discount chains and placed more of Samsung's products into more upscale area of expertise stores.

Reconstruction of the firms bureaucratic was applied in order to lessen it to get faster approvals for new product budgets and marketing plans, thus accelerating their skills to seize opportunities. Due to the bureaucratic turnaround situation it allowed Yun to make heavy investment funds into key technology and it allowed these to push out a multitude of digital products.

How significant was Jong- Yong Yun's role in the change process?

Samsung's CEO Jong-Yong Yun's beliefs of constant improvement has helped Samsung get out of their financial crisis and making it stronger than ever. Yun specifically applied an commercial engineering strategy to Samsung to be able to cut creation times and increase workers' productivity. Although he in the beginning met resistance in implementing professional executive in the organization, Yun sponsored in-house training sessions for employees. He also trained 1, 550 professionals in Industrial Engineering concepts. Yun's ideas involved product innovation, process invention and personnel development.

Samsung Gadgets not only taken to the front of the pack internationally but also raised its parent or guardian Samsung Group to the main location in South Korea's all-important business search rankings. Therefore because of Yun's efforts, which drew heavily on industrial engineering principles, Samsung Group stood at the top of South Korea's gigantic industrial conglomerates.

At the heart and soul of Yun's strategic arrange for Samsung Electronics were the three Ps: product, process, and staff innovation. In the region of product creativity Yun shifted quickly to extract Samsung from those businesses which were marginal or no longer producing a satisfactory rate of come back for the company. As a result Samsung Gadgets reduced its tv set output and performed away with such marginal products as dishwashers, electronic digital pagers, and juicers. These products were substituted with such high-tech, high-margin goods as flat-panel exhibits, MP3 music players, and advanced mobile phones.

Among the functions streamlined by Yun was the global source chain, which was altered from a regular monthly to a every week system. Beneath the new system the business changed their emphasis from make-to-stock to make-to-order production. With the decrease in inventories cashflow improved. In the region of personnel advancement Yun instituted something of global product management under which each of Samsung Gadgets' 14 divisions was aimed by a global product manager who was simply responsible for every phase of that division's procedures. (Pedler, M. , Burgogyne, J. and Boydell, T. 1997. ) Yun also decided to give his subordinates increased autonomy interpretation he empowered the employees.

Yun's role played out a major role for the success of the business and increased their revenue. Yun's success in masterminding the distinct turnaround at Samsung Gadgets is the reason why the company is prosperous. Yun's role in the change process was important as he made major changes to the system. Yun altered the momentum of the business; he modified the bureaucratic system to permit the employees to express their ideas which lead to Samsung been impressive.

Yun role in the change process allowed the Samsung's products to be looked at as a higher-priced brand rather than before where it was regarded as a lower-priced appliance. It also became an established low cost provider of varied components to greater and better-known manufactures throughout the world. Therefore Yun's role helped the company to tap into their resources that that they had and to use them to change how functions were done. Yun also modified the process by recruiting the professionals and the technicians.

Yun laid the building blocks for the new change that was put in place and without the guidance and expectations that was place by Yun the change processes wouldn't normally have prevailed. Yun played a role in each facet of Samsungs change and help the business get of their financial problems. Yun was very focused on his work and risked a great deal for the company. Yun and his management team got time to make sure that the changes these were implementing would be successful and that it could speed up the study and development of services.

Yun's role in the change process offered the customers a better impression on the firm's products. His role also allowed Samsung to lessen complexity in the early stages of the look routine. This then led to the firm had the opportunity to get the products to the producers quickly with reduced problems with the lowest possible costs. Therefore Yun truly performed a significant role in the change process and he helps advance Samsung in digital systems.

Yun's technique to give attention to the higher-end products has clearly enhanced the firm's brand image and has led the company to be profitable. Actually many executives on the market of US have said these are astounded by the ability of the company to generate a superior brand image. This might not need been possible if Yun had not been playing a component in the change process as it was his thinking that allowed this to occur.

What methods did Samsung use to market invention and the diffusion of ideas over the organisation?

Firstly Samsung marketed technology by deciding to press the firm to build up its own products somewhat than to duplicate those products that other businesses are suffering from. Yun placed a great amount of emphasis on the development of products that would impress the customers using their attractive designs. Yun also reoriented the firm and helped it develop new features by recruiting the managers and technicians.

Yun put the new managers and engineers through the four week training that was intended to create incentives for new expertise. Samsung rigid seniority/structured system was changed with a merit bottom system that allowed progress to take place, it also allowed the employees to know that their work and ideas are not overlooked and that good ideas are rewarded. Because of this the above efforts Samsung started start an array of products that was made to make a huge impression on the customers.

Another large part of the success of Samsung's creativity and ideas was that they regularly acquired information from the sellers about the new features that customers wanted to see in their electronic devices. This close website link with the sellers helped Samsung to come up with top selling products also to create the digital products that the clients were looking for and the real design choices of the products.

Samsung managers who have worked for competitors say they have to go through considerably fewer layers of bureaucracy than they had in the past to win agreement for new product, costs and marketing ideas, accelerating their capability to seize opportunities. Therefore Samsung reduced the bureaucratic obstacles. As the bureaucratic obstacle was reduced it allowed Yun to make investments into key systems that allowed the innovative products to be designed.

Samsung says that it has been able to decrease the time that it requires to travel from a fresh product strategy to rollout to less than six months. Because of the above ideas of how to better run the business it led to allowing the efforts of the firm's top professionals, designers and designers to be expressed also to be acknowledged because of their ideas. It allowed them to better communicate with the most notable managers about their ideas.

Samsung advancements in digital technology have helped with them increasing their chances of getting an improved position in the market. They have advertised their invention by incorporating their computers, consumer electronics and communications to be the best leader. Samsung experienced also created the post of chief design officer to ensure that designers can get their ideas to the top professionals.

The designers are pushed to find ways to work with the designs that are presented to them. Yun has also worked directly with Chin to summon engineers and designers from over the firm to mix wireless, semiconductor and computer experience in order to pursue its vision of domination of the digital home. Samsung experienced even opened up or extended design centres to help the designers observe the way that consumers actually use the various products.

Therefore giving them this opportunity they learn how to be innovative when it comes to designing the merchandise. The designers were able to watch from behind a two-way reflection to observe how the customers responded to a specific design. With this the designers were able to return back and work on the required things that would have to be implemented to be able to make certain the merchandise are what the customers want.

This required the designers to believe out of the box and be creative and produce ideas that would impress the customers. The designers are in essence compensated when they see their hard work and ideas been liked by the clients if the product is up to their standards. Samsung at the end of the day depends on the elegance of its products therefore Samsung means that the employees are happy and have the ability to express their ideas.

To what amount is Samsung a 'learning organisation'?

A learning business is the term given to a business that facilitates the learning of its participants and continuously changes itself. (Pedler, M. , Burgogyne, J. and Boydell, T. 1997). Learning organizations develop because of this of the pressures facing modern organizations and permits them to stay competitive in the business environment. A learning business is characterised by five main features specifically: systems considering, personal mastery, mental models, shared vision and team learning. (Peter Senge, 1990)

An strategy of Samsung was to be advancement and to promote a learning organization. The newest and extensively accepted notion of learning organization today is one which is characterized by an organizational culture that fosters the improvement of the employees, their efficiency and the entire operation and performance of the business enterprise through constant learning (Gilley & Maycunich, 2000, p. 5).

Theoretically, Samsung preserved a substantial capacity to renew all the procedures and they remained competitively ready to create products that the customers wanted, which means employees acquired opportunities the identify the clients need because of Samsung been a corporation learning. Continuous learning and change is valued through learning organizations. The primary matter for Samsung is approximately the market share, productivity and success and it is realized that learning is the main element aspect in obtaining these business results.

The creation of features that are recently not set up is the thought of learning and Samsung has allowed its employees to be exposed to learning. Furthermore, the principle assumption of the training organization is the improvement of the training capacity of the individual is comparable to the organization's performance. Relating to Ruffa Morato, ( 2009) Samsung's Six Sigma Academy was set up to educate the employees and build-up the team of quality specialists with problem fixing abilities.

Samsung put in 3. 6 percent of payroll costs on education and training, an extremely high percentage as compared to firms such as Xerox, NUMMI, Saturn, IBM and Motorola. (Type Pad, 2007) Samsung will not only make investments in education and training but it addittionally creates incentives in order to help motivate each employee and organizational learning. Each employee is given the possibility to set the training targets and learning themes or templates with the consent of the supervisor (Bae & Kim, 2004, p. 188).

Periodic interviews are carried out to determine the improvement and discuss the steps to increase the training before your final evaluation is given by the finish of the year. (Ruffa Morato, 2009). The examination will make a decision the genuine learning details and promotion of the employees. Samsung also provided the employees with progress technologies so that the employees are able to do their work. The fact that Samsung also delivered their designers on top of that camp to find creative ideas, it shows their interest with their employees and their desire for trying to ensure that they reach their potential.

Samsung had discovered as an company to become more innovative and creative to attain their goals also to develop. Samsung has committed to their employees to come up with ideas that will "wow" the customers. They have helped bring the right employees to interact to make a quality brand image. Therefore Samsung is a learning organisation to the amount that it invests in its employees as one of the main focuses.


The competitiveness of the global industry has required organizations to be progressive not only in the products and services they create but as well as with their strategies and methods. Indeed, Samsung's success manifests the significant returns from innovating within the organization. This engaged the styles of the mature marketers to result the advancement by encouraging contribution and participation of the employees.

Samsung acknowledged that the creativity lies in its most important asset - the folks. So, it made innovations at work to enable the employees. This consists of training the employees and providing incentives for them. The company has been and continues to strive to become the world leader in the consumer electronics and communication industry by innovating in every single facet of its business.

Harvard Referencing:

Baker, W. E. , Sinkula, J. M. (1999), "The synergistic effect of market orientation and the learning group on organizational performance", Journal of the Academy of Marketing Research, Vol. 27 No. 4, pp. 411-27

Balogun. J and Anticipation Hailey. V, 1999, Checking out Strategic Changes, Prentice Hall

Barber, Ben, "South Korea's Troubles Are Blamed on 'Chaebols, '" Washington Times, Dec 25, 1997.

Brooke, Wayne, "Samsung Attempts to Keep Outgrowing Economic Woes, " International Herald Tribune, April 28, 2003.

Dempsey, Michael, "Jong-Yong Yun of Samsung Gadgets, " Financial Times, Feb 4, 2002.

Pedler, M. , Burgogyne, J. and Boydell, T. 1997. THE TRAINING Company: A technique for lasting development. 2nd Ed. London; McGraw-Hill.

Peter Senge (1990), The Fifth Discipline: The artwork and practice of the training organization, Doubleday, NY, . page. 105, 164

Ruffa Morato, Company Circumstance Studies Technorati Tags: company research study, Essay samples, September 30, 2009, retrieved 7 July, http://ivythesis. typepad. com/term_paper_topics/2008/09/sample-essay-sa. html

Wrigley, N. , Currah, A. (2003), "The strains of retail internationalisation: lessons from Royal Ahold's experience in Latin America", International Overview of Retail, Distribution and Consumer Research, Vol. 13 No. 3, pp. 221-43.

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