ED Samsung's culture war
Samsung Group’s de facto leader Lee Jae-yong has pushed for steps to separate his company from its old-style, top-down management culture, but it remains to be seen whether it is serious about change this time or will settle for a cosmetic one.
Samsung simplified its seven-rung non-executive “career levels” into four, so those in the four new categories without their ranks can address each other without ranks.
It has also abolished its control tower, named the “future strategy room,” a structural tool that enables one leader to run the sprawling business empire like an emperor and symbolizes the Lee family’s ultimate control.
Also gone is the affiliation of Samsung with the Federation of Korean Industries (FKI), the business lobby at the heart of the latest scandal, in which conglomerates ― Samsung included ― are suspected of bribing President Park Geun-hye and her friend Choi Soon-sil.
These modernization plans are being pushed by Samsung’s leader, the only son of Lee Kun-hee, who has been in a vegetative state since May 2014.
It is laudable that the new leader has tried to set an example for family-oriented big businesses to sever ties with the past and forge ahead. But the biggest hurdle standing in the way of Lee’s experiment is himself.
The special prosecutor’s team is considering a second request for Lee on charges of bribing Park by contributing millions of dollars to two foundations under Choi’s control and giving an expensive horse to Choi’s daughter, an equestrian.
These bribes were allegedly aimed at moving the two partners to pressure the National Pension Service to use its stake to back Samsung’s inter-subsidiary merger. It is true the merger between Cheil and Samsung C&T has consolidated Lee’s control but no connection has been firmly established. As a matter of fact, Samsung denied the charges and the court accepted its claim when it rejected the warrant request the first time.
The decision is also owed to prosecutorial discretion exercised by the investigators, who want to put pressure on President Park and strengthen the impeachment case against Park.
It is deplorable that Samsung, a leading global tech firm, has been associated with these kinds of shameful allegations. It also raises questions about whether the group is serious about its latest overhaul, or if this is another cosmetic approach.