By Kim Yoo-chul
Staff Reporter
Samsung Electronics Wednesday announced a plan to reorganize its business units, targeting specific customer segments.
The decision came after the world’s top semiconductor maker saw its latest quarterly operating profit sink below 1 trillion won for the first time in five years. Analysts said the plan is in line with Samsung’s ongoing cost-cutting measures.
In the semiconductor sector, the company will integrate two units, which are similar in operation, into one to help spur its recent restructuring drive.
The South Korean electronics giant will also combine the teams of merchandising planning, design and strategic marketing into a single entity to speed up decision-making in a fast-changing wireless market sector. Samsung will set up a development management team for the development of next-generation products.
In the manufacturing sector, the company built a centralized controlling tower by uniting four global management teams into the global manufacturing section.
To intensify global marketing capabilities, Samsung will centralized WiBro-related units and named Vice President Kim Woon-sup as chief of the new network business section. The new measures will take effect Sept. 1
``In order to pursue fast decision-making and increase competitiveness in manufacturing, we took some restructuring measures,’’ Samsung said.
Due to falling earnings, the strategy planning section has instructed each group affiliate to develop new businesses, review investments and streamline the efficiency of operations that are not competitive enough.
Samsung had been using a top-down management system under which the top executive of a division also managed the business unit that handles the division's key products.
This was intended to enable top personnel to make swift decisions by having access to information from the front line. However, the company decided to change the system as it has been giving a lot of power to one person.
Market watchers say the latest round of restructuring is most severe since the company's work force was cut by 30 percent in 1998.