By Kim Yoo-chul
Staff Reporter
Samsung Electronics, the world's largest electronics company, promoted Lee Jae-yong, son of former Samsung Group Chairman Lee Kun-hee, in a management revamp that observers believe moves the Samsung heir apparent closer to the top.
The younger Lee, 41, was named to the new post of chief operating officer (COO), while 58-year-old Choi Gee-sung will replace Lee Yoon-woo, 63, as the company's chief executive officer (CEO), the Samsung Group said in a statement, Tuesday.
"The promotion of the younger Lee shows that we are taking a meaningful step toward ending the Korean business tradition of basing personnel decisions on seniority," a senior Samsung insider, who declined to be named, told The Korea Times.
Samsung Electronics also named Yoon Ju-hwa as its new chief financial officer (CFO) and created a corporate management team (CMT) to better coordinate its investment plans, the group said.
This is Samsung Group's second organizational reshuffle this year, as the country's largest conglomerate continues to tweak its lineup to speed up its decision-making process and effectively support emerging businesses.
The previous changes, announced in January, had the company divide into 10 operating divisions under its two main businesses ― the digital media and communications division and the device solutions division.
However, with Choi taking firm hold of the management helm, the business will be reorganized again into seven operating divisions.
In other personnel changes, Samsung Card Vice President Choi Do-seok, who had previously served as the group's CFO, was promoted to vice chairman.
The departure of Lee, who had served as Samsung Electronics' vice chairman and CEO, represents the retirement of the group's first generation of business executives, who contributed to Samsung emerging as a world beater in consumer electronics and semiconductors.
Lee landed a role as the company's chairman of the board of directors.
The group's other "old-timers" such as Lee Sang-wan, who led the company's technology center, and Kang Jae-young, currently the head of Samsung Trust Investment, will also step down from their respective posts and move to the group's charity-related units.
"There will be more personnel changes below CEO level that will be announced on Wednesday. Young executives with reputations in finance and technology will see bigger roles," said another Samsung insider.
In reorganizing its 10 operational units into seven, which will each be managed as separate companies, Samsung Electronics will scrap its component unit.
This will improve the quickness in decision-making and also reflects the company's intentions to strengthen its focus on consumer products.
"Samsung Electronics will be realigned into seven separate divisions from the current 10 in a follow-up measure," Rhee In-yong, a senior vice president of Samsung's Corporate Communication Team said in a briefing.
Samsung is the world's biggest maker of computer memory chips, while it leads the global flat-screen industry. Samsung trails industry leader Finland-based Nokia in the global handset market.
During the economic recession, Samsung had been operating a "scenario-based" management scheme.
But it recently normalized businesses, and opinions are running high that Samsung needs to have a faster decision making structure to spur its efforts to find next-growth engines and to maintain its traditional businesses amid competition from its overseas rivals in the global consumer electronics market.