Baek Byung-yeul is a journalist at The Korea Times focused on cultural content, including films and cultural events in South Korea. You can contact him at baekby@koreatimes.co.kr to share your insights.
Top 3 Samsung CEOs to retain positions
From left are Samsung Electronics mobile chief Koh Dong-jin, consumer business chief Kim Hyun-suk and semiconductor business chief Kim Ki-nam / Korea Times file
By Baek Byung-yeul
By Baek Byung-yeul
Three Samsung Electronics CEOs ― those in charge of semiconductors, home appliances and IT and mobile communications ― will remain in their positions despite the upcoming year-end management reshuffle expected to take place this week, sources knowledgeable about the issue said, Sunday.
“Samsung will keep on its three CEOs who are responsible for its three major pillars. But the company will diversify its executives' pools by expanding the promotion of low- and medium-ranked executives for the reshuffle,” one of the sources said.
Samsung's business structure comprises three major units ― Device Solutions overseeing its semiconductor business, IT & Mobile Communication supervising mobile devices and Consumer Electronics for TVs and home appliance products ― and each unit has been led by one of the three CEOs ― Kim Ki-nam, Koh Dong-jin and Kim Hyun-suk, since 2018.
Samsung's 2021 management reshuffle on both the C-suite and below the top brass-level is receiving growing attention as this is the first realignment of the company's organization since Vice Chairman Lee Jae-yong returned to management after being released on parole in August, seven month after being imprisoned over bribery.
Upon arriving home from the United States, the Samsung chief said on Nov. 24 that “I feel heavy of heart after seeing the harsh reality of the market in person,” when asked how he viewed the group's future prospects.
During his around 10 days of business meetings in the U.S., Lee traveled all over the country to meet CEOs of top firms there, such as Microsoft, Google, Moderna and Verizon, and to find future growth areas for Samsung including in biotechnology, telecommunications and IT. He also finalized a $17 billion investment project in Texas for establishing a new foundry factory.
His remarks can be interpreted as Samsung needing to apply “something new” from inside to further widen the gap with latecomers in the rapidly changing global economic environment. Within that context, what visible changes could be made especially for its governance is another point of focus, as Samsung requested an assessment by Boston Consulting Group (BCG) regarding its compliance and human resources systems before a possible reorganization.
BCG referred to cases of large overseas conglomerates overhauling their governance. Based on the consultation results, another source said Samsung is inclined to establish a new “group control tower” after it had voluntarily dismantled its previous one a few years ago. But this time, the new unit, if it actually materializes, will let new personnel recruited from outside have more authority, with existing members of the now defunct group strategy office taking supporting roles.
Before its dismantlement, the group's strategy office had some 200 elite Samsung officials and functioned for nearly six decades. In 2017, however, Samsung leader Lee told lawmakers he would make direct moves to close the office after the unit came under criticism regarding the scandal that led to the impeachment of former President Park Geun-hye.
A committee set up in 2020 to meet compliance with a court order is also looking into the matter to ensure legal violations do not arise. "Issues related to succession are one of the three key areas we are monitoring," a spokesperson for the committee said. “The committee's role is to ensure that ownership matters are decided within the frames of abidance by the law."
In addition to the reshuffle of executives, Samsung is in the process of finalizing new human resource management systems. An official announcement of its new HR system is planned for this week. The HR system overhaul could include expanding the evaluation of employees' performance on an absolute rather than relative scale and adopting peer evaluation methods.
“Samsung Electronics is trying to create a flexible and horizontal organizational culture,” a Samsung official said.