[Desk Column] Samsung of Management, Samsung on the Advance

The management of Samsung. This is a phrase that always follows Samsung, Korea's representative company. It refers to Samsung's unique organizational culture that enhances efficiency by managing people and systems in a perfectly coordinated manner. It also implies that the absence of any single individual does not lead to a crisis within the organization. In fact, when Samsung Group Chairman Lee Kun-hee collapsed in 2014, there were concerns inside and outside the business community that the group might fall into crisis due to the absence of its leader, but Samsung showed an unwavering stance. The situation was similar even after Vice Chairman Lee Jae-yong was detained in 2017.

However, that was only on the surface. Samsung, operating with its characteristic management system, maintained its position without shaking but did not advance. A clear example is that since Vice Chairman Lee's detention, there has not been a single major merger and acquisition (M&A).

To become a winner in the semiconductor industry, bold decisiveness and drive to push forward investments at all costs are essential. The role of Morris Chang, the founder and former chairman of TSMC, was absolutely crucial in making TSMC the world's number one foundry (semiconductor contract manufacturing) company. Especially after retiring in 2005, when TSMC faced a crisis due to the global financial crisis, Chang returned to management in 2009 and made counterintuitive investments. The secret behind Samsung Electronics, which entered the semiconductor market late, rising to become the world's number one memory semiconductor company was also the strong drive of the late founder Lee Byung-chul and Chairman Lee Kun-hee. This is why Samsung's appeal that the judicial risks surrounding Vice Chairman Lee could translate into management risks is not to be taken lightly.

The business community expected Samsung's clock to start ticking again after the dismissal of Vice Chairman Lee's arrest warrant in June and the prosecution's investigation review committee's decision to halt the investigation and not indict. Since the judicial risks that had lasted for over four years since November 2016 were largely resolved, it was anticipated that the 'Semiconductor Vision 2030,' aiming to become the world's number one system semiconductor company, could gain momentum. However, even 57 days after the investigation review committee's decision, Samsung's clock is still not moving. The main reason is that due to internal conflicts within the prosecution following the committee's decision, the weekly face-to-face reports between the Prosecutor General and the Seoul Central District Prosecutor were replaced by written reports, pushing Vice Chairman Lee's case to the back burner. Meanwhile, some quarters are pressuring the prosecution to make a different decision, arguing that the investigation review committee lacks expertise. However, it is worth noting that among the 14 current members who reviewed this case, eight were legal professionals (four law professors and four lawyers). Moreover, the investigation review committee was established by the prosecution itself as a reform measure.

While the prosecution hesitates, global semiconductor companies stand at a critical crossroads. The US-China hegemony war over semiconductors is intensifying, and the M&A market is becoming active. In the acquisition battle for ARM, a British semiconductor design company considered the biggest deal in the global semiconductor industry this year, the US semiconductor company Nvidia is reportedly leading. The industry initially considered Samsung Electronics a strong candidate for acquisition, but inside Samsung, only silence prevails. The biggest reason is likely that the owner who should lead the charge remains shackled by judicial risks.

Founder Lee Byung-chul once said, "Some people think that anyone can build a company and become a conglomerate if they have funds and government support, but that is a big misunderstanding. Since the founding of the nation until today, how many companies have experienced ups and downs? Only with painstaking effort, creativity, strong mental strength, and courage to endure countless hardships can business management truly be possible." Especially now, unprecedented uncertainties such as the COVID-19 pandemic, the US-China trade war, and Korea-Japan conflicts are crashing like waves. It is a time when the owner's decisiveness and leadership are needed more than ever.

This content was produced with the assistance of AI translation services.