By Oh Young-jin
Assistant managing editor
Trying to guess what Samsung Group is up to and predicting how it will behave is similar to reading tea leaves. As with tassology, it is completely unscientific and more likely than not simply a wild stab in the dark.
There are reasons why Samsung has successfully defied many outside attempts to see its future through a crystal ball.
Korea’s largest conglomerate has kept faith in “animal spirits” to help it remain a competitive and leading business entity, even while Toyota is stumbling and GM is faltering.
In other words, Samsung has shown an ability to change direction nimbly despite its size. A conventional belief is that a clear sense of purpose and the mobility Samsung has illustrated usually is restricted to when there is a separation of management from ownership, a structure adopted by most leading western firms.
In Samsung’s case, it is the opposite ― management control is firmly under the control of its owner Lee Kun-hee, the second-generation leader who has made Samsung what it is today. So, by and large, understanding Lee is the key to solving the Samsung riddle.
Lee is a man of few words and public access to him is quite limited, thus it makes the job of reading him as difficult as reading the conglomerate he heads.
Taking it as an excuse for any wayward guess and believing that new guesswork will end up unsubstantiated just like so much before it, here is my shot at the latest round of media hype over the group.
The first question is not what Lee Kun-hee wants to change but whether he really wants it at all. The purpose of his attempt to change his organization is obvious.
It all started last week when Lee Kun-hee flew back from the Guangzhou Asian Games, which his firm is sponsoring, and briefly told reporters about his intention to promote his only son Jae-yong, currently vice president and chief operating officer of Samsung Electronics, to president.
It was not clear whether Lee unexpectedly blurted out his inner thoughts or the announcement was pre-planned. One notable characteristic of Samsung’s organizational prowess is that its PR machine is well-trained enough to make their leader’s instructions look well-thought out in advance.
As expected, the senior Lee’s remark triggered a chain of reactions.
First was the revival of the Strategic Planning Office, the group’s control tower that was criticized for helping Lee put the conglomerate under his firm grip and subsequently abolished in 2008, when Lee was forced to quit as group chairman after a special prosecutor’s probe into his slush funds.
Then, Kim Soon-taek, vice chairman and a technocrat who is responsible for finding and fostering new growth engines, was put in charge of the revived apparatus. Kim, CEO of Samsung SDI for nine years until 2009, told reporters, “The chairman has instructed me to keep my eye on the group’s future growth.” Judging by his career, Kim is not expected to play the roles of Lee Hak-soo or Kim In-joo, the senior Lee’s right-hand men, who have helped their boss before in times of crisis.
Now, Lee and Kim In-joo have been relegated to advisory roles in subsidiaries, a move a Samsung officer says is as good as retirement, although it is widely speculated that they have been given new missions.
All told, Lee’s moves look a textbook case by which he is beginning a process to transfer power to his son, following the dynastic tradition of chaebol, Korea’s indigenous family-oriented big businesses.
A typical interpretation is that Lee is promoting his son to help him get better control of the conglomerate, bringing in Kim Soon-taek to groom the junior Lee as Samsung’s next leader and clearing up the old guard to enable him to start with a clean slate.
The scenario, however, could become complicated when a dose of human psychology meets a sense of reality.
It is obvious that the senior Lee doesn’t see it is time to slow down.
Judging by his repeated remarks, Lee sees now as a time of crisis both in terms of the present situation and future contingencies.
Although Samsung Electronics, the group’s flagship, has performed well, he constantly cautions against complacency among employees, pointing out that the only way to stay afloat in this ever-changing business environment is persistently thinking ahead.
Samsung leads in the global semiconductor business but lacks a new business to name for long term, sustainable growth.
Few would be surprised to find Lee thinking of his decision three decades ago to turn to the chip business, the seed sown for the current prosperity of the group. Also foremost on his mind is the unstoppable success of Apple’s iPhone and Toyota’s recall misfortunes. No doubt, Lee will give a higher priority to strengthening the Samsung he inherited from his father before passing it on to his son.
Plus, it is not certain whether Lee wants to put his only son in the crosshairs of public scrutiny now by giving him a big assignment, knowing any misstep will invite additional doubt on his ability to run the conglomerate.
The consensus inside and outside Samsung is that the junior Lee should prove his leadership mettle before taking over from his father.
So the conclusion is that the steps the senior Lee will take for the foreseeable future will be so measured as to prevent any drastic change, irrespective of whatever spin the media may put on the junior Lee’s potential promotion in a reshuffle expected next month.