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'Change everything except your wife and children'
By Park Jae-hyuk
The late Samsung Group Chairman Lee Kun-hee, who died at the age of 78, Sunday, has been most recognized for his opinions on the effects of crisis on a company and his pursuit of innovation, which enabled the chaebol to transform into a world-leading company in the memory chip, digital television and mobile phone sectors.
After succeeding his father as chairman in 1987, he increased the group's revenue from 9.9 trillion won ($8.7 billion) to 400 trillion won in 2014, at the time of his hospitalization.
"Spearheading Samsung's second foundation, I will do my best to fulfill my duties," the chairman said at a ceremony marking his takeover of the firm. "With future-oriented and venturous management, I will grow Samsung into a world-class company."
His strategic mindset as an entrepreneur was proven even before he was appointed as chairman.
When he was director of broadcaster TBC in 1974, he acquired Korea Semiconductor with his own assets despite the opposition of his father, Samsung founder Lee Byung-chull, who had focused on milling and textile businesses.
"Until when will we remain as a country dependent on foreign technologies? Samsung should take action to be set free from technological colonialism," the chairman said at that time.
With the aim of gaining independence from Japanese technology, Lee eventually convinced his father to announce Samsung's plan to invest in the semiconductor business in Tokyo in 1983. A decade later, the company developed the world's first 64M DRAM and it has continued to maintain leadership in the global chip industry.
Behind the dramatic transformation was the chairman's declaration of "New Management," which was made in Frankfurt in 1993. Back then, Lee summoned Samsung executives to the German city, in response to his anger over a video of his employees cutting faulty washing machine lids with knives to adjust their size.
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| Samsung Group Chairman Lee Kun-hee speaks to 200 employees at Kempinski Hotel in Frankfurt in this 1993 file photo. He emphasized quality management during the meeting. / Courtesy of Samsung Electronics |
"Change everything except your wife and children," he said at that time, emphasizing the importance of product quality, over and above production volume. His order to incinerate defective Anycall mobile phones worth 15 billion won in 1995 was part of efforts to prioritize quality.
In 2003, he made an order to cease the production of CRT televisions, which accounted for 27 percent of the entire sales volume then, to focus more on PDP and LCD televisions in line with the transition from analogue to digital.
As a result, Samsung's Bordeaux series of televisions was able to hold the largest share in the global television market at the time of its release in 2006, overtaking Sony. This came 13 years after the chairman said, "Return the name of Samsung," when he witnessed his company's televisions covered in dust sitting on a corner shelf of a Best Buy store in Los Angeles in 1993 with a price tag nearly $100 cheaper than the Japanese company's models.
Samsung's victory against Sony was a strong display that the Korean conglomerate had completely transformed itself into the status of market leader from previously being a fast follower.
Based on the huge success of Samsung, many Koreans came to agree with the chairman's remarks made in Beijing in 1995, "Korea's administrative ability is third-rate, its politics is fourth-rate and its business competitiveness is second-rate."
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| Samsung Group Chairman Lee Kun-hee, right, signs his autograph at Samsung Electronics Vietnam's plant in Bac Ninh in this 2012 file photo. / Courtesy of Samsung Electronics |
Tough times
Lee, however, went through tough times around 2007 as he was indicted for embezzlement and tax evasion charges. He apologized and stepped down in 2008. Apple's iPhone launch and the global financial crisis were additional difficulties his company faced at that time.
Following a presidential pardon in December 2009, he returned to Samsung in March 2010, saying, "This is the real crisis. Global leading companies are collapsing."
His company released its first smartphone Galaxy S in May that year and more than 25 million Galaxy S smartphones were sold worldwide. In 2012, Samsung took the lead for sales in the global mobile phone market.
This achievement came 17 years after Samsung previously took the top spot in the domestic mobile phone sales market in 1995 with a 51.5 percent market share, defeating then world leader Motorola.
