By Cho Jin-seo
Staff Reporter
Samsung Group celebrated the 14th anniversary of the declaration of the New Management Initiative by Chairman Lee Kun-hee in an in-house TV broadcast last week.
The group said its pretax profit grew 29 times and revenue expanded by 3.4 times since 1993, when Lee set the ambitious goal of reforming Samsung from a domestic entity into a world-class player. On June 7, 1993, he summoned some 150 senor executives of the group to a hotel in Frankfurt and urged them to ``change everything except for your wives and children,'' which became the group's unofficial motto ever since.
During the period, the total market capitalization of the group affiliates grew 18.4 times from 7.6 trillion won to 140 trillion won. Overseas sales soared from $10.7 billion to $66.3 billion, and the number of employees increased from around 150,000 to 250,000, according to the Samsung Restructuring Office, the group's control tower.
``Preparing for an end-of-the-century crisis, the NMI was dubbed the Lee Kun-hee Syndrome in Korea as it called for a shift from quantity-oriented management to quality-oriented management,'' a statement from Samsung said. ``The 14 years of new management can be encapsulated by Samsung Electronics' leap to become a global leader.''
The leadership of Chairman Lee, who is a second generation CEO of the group after founder Lee Byung-chull, has long been the driving force behind the whole group. He urged innovation especially at Samsung Electronics by saying it was suffering from terminal cancer in 1993.
With noticeable successes in the semiconductor and mobile phone businesses, Samsung Electronics has contributed a major part of the group's financial growth during the last 14 years. Its earnings before tax were 9.4 trillion won last year, which was more than 65 percent of the aggregated income of the entire group. Overseas sales were $50 billion, accounting for three quarters of the group's total exports.
The group headquarters hoped that Samsung Electronics will start to recover from the sluggishness it has shown from late last year, and that will ``conclude the success story of Samsung New Management.''
It also said that the globalization strategy of Samsung Electronics is being disseminated to the group's other affiliates this year. As a result, growth is noticeable at manufacturing arms such as Samsung Heavy Industries, Samsung Techwin and Samsung Engineering. Financial firms such as Samsung Life Insurance, Samsung Fire & Marine Insurance and Samsung Securities are also showing stable performances to bolster the group's income portfolio, it said.
This year, the 65-year-old chairman has repeatedly stressed the importance of relentless reform in industries and in the educational system, saying that Korea's position is ``sandwiched'' between high-tech Japan and fast-growing China in the global economy.