Samsung Group - Assignment Example

SАMSUNG GRОUР Name Professor (Tutor) University Course City and State Date Samsung Group Question 1 Samsung Group is a South Korean Technology company that was originally started as small export firm in 1938 by Byung-Chull Lee as the founding chairperson. The small business located in Taegu was started using 30 000 won. The primary focus of the business at the time was on export trade of vegetables, dried Korean fish, and fruits. Beijing and Manchuria were the destination of the products from Samsung group as a small business organization. The company then started growing over the years, but the main breakthrough that the company got was in 1980 when it bought telecommunication company Hanguk Jeonja Tongsin. At this stage, the company started the production of fax machines, switchboards, and telephones and this when the company was given the company name Samsung Electronics Company Limited that combined all units. It was during the 1980s that the company expanded globally to parts including England, Tokyo, New York, Portugal, and Texas. After the death of its founder in 1987, the company was divided into three main groups, but the company later focused on three key industries in 1993. The key industries were chemicals, engineering, and electronics. The renewed attention in the electronics industry was essential to the company's growth, and its investment in LCD technology made the company rise as in 2005 it was a world leading producer of LCD panels. Through its vision for the decade “inspire the world, Create the Future,” the company has never looked back in the electronics industry especially the mobile technology. However, the Samsung journey has not been smooth sailing since its inception in 1938 to present. In 2008, Samsung group was investigated for three months on issues about widespread corruption in the company (Song Jung, 2008). Lee Kun-hee who was the chairperson at the time together with nine other executive members was charged with tax evasion, bribery, and breaching of trust. This scandal was mainly about an attempt by Lee Kun-hee to give the company’s control to his son Lee Jae-Yong. The company was accused of corruption activities including bribery and managing of large slush funds. These allegations were from Kim Yong-Chul, a former legal adviser to the company. Lee Jae-Yong ultimately took control of the family from his father in 2014 and promised transparency, but he was arrested this year on scandals that included trying to impeach the South Korean president and embezzlement of funds of up to 48 Million USD. Apart from corruption issues, the company is faced with product quality issues. The company has recalled over 2.8 million washing machines in 2016 alone because the machines fell apart during use. Apart from washing machines, the Samsung Galaxy 7 phones had quality problems that caused safety fears because of overheating and being fire prone. The company had to recall all the Galaxy Note 7 phones (Jethro & Kwon, 2016). The company has however remained focus even with these problems through its vision 2020 projections where it has projected to reach 400 billion USD in revenue and rank among the top five brands annually. The company's next leader should look forward to keeping investors and politicians on the side of the conglomerate and find new ways to develop and grow the company further. Question 2 Cheabol is a collection of independent firms that are formally registered under the control of one family regarding both finance and administration. These organizations are structurally explained using three primary characteristics. One is that the control and ownership are the most dominant family in the whole collection of businesses. Secondly, the group contains affiliated firms that operate in a wide range of different markets and industries. Lastly, based on the Gross Domestic Product (GDP) of South Korea, these organizations accounts for a large percentage as shown in the table below between years 2009 to 2011. 2009 2010 2011 Asset/GDP 20 largest groups 75.0% 79.0% 85.2% 5 largest groups 46.5% 50.0% 55.7% Sales/GDP 20 largest groups 75.2% 79.0% 85.2% 5 largest groups 46.5% 50.0% 55.7% The organization structure is that there are professional managers that are the heads of individual companies in the group. One manager picked from the dominant family then controls all these managers. This general manager is the final decision maker on issues dealing with the Chaebol. Chaebols have some effects in the management process, especially new processes. The specific leadership characteristics by the main leader of the group otherwise known as chongsu lead to the creation of well-created plans through clear-cut visions. The systems also have sound management procedures that have allowed them to be used in large companies such as Samsung and Hyundai. The groups also guard finances through proper risk aversion techniques. Finally, these groups have affected the process of decision making as a managerial tool into agile processes where discussions are done in meetings called by the general manager before reaching a final decision. Besides, the management perspective created by these groups are long term. The executives are related by blood and hence the tendency to formulate ling term strategies to take the group forward as opposed to CEO's who often formulate short-term strategies. Culture is one of the primary aspects that affect the management processes in both domestic and global companies (Robbins et al., 2015). It is fascinating to see the effects of culture on management and the approaches different cultures take in the management process. Because cultures are different from one country to another, then the management processes will also be different. One of the key management practice affected by culture is joint ventures. The blending of different cultures in the formulation of international joint ventures and the decision-making process once the ventures are formed is highly dependent on international cultures. With the issue of culture in family maintenance and strong community values, awareness and concern issues are cultivated on the needs of others, in this case, it will include staff and the company one manages in general. Finally, culture especially international culture may lead to disruption of collaborations and alliances especially in the process of making crucial managerial decisions. Question 3 Today Samsung group is one of the world-leading manufacturers of memory chips and smartphones. Samsung group is still top in the smartphone market even though its market share has continued to dip. In the period between 2015 and 2017, the market share has dipped to approximately 20%. The annual sales of smartphones per quarter have reduced drastically from over 76 million to around 65 million. Apple has increased its market share in the smartphone industry as the primary competition to Samsung. However, Samsung remains at first position in the sale of smartphones and market share. Apart from the smartphones, Samsung also currently ranks third in the smartwatch market with 15% market share. Samsung group mobile industry still has the largest market share as the company produce a product lineup of even the cheap and simple mobile phones. The right market positioning of a brand is dependent on finding out consumer insights and needs. Samsung has produced price friendly gadgets; this has solved some problems for example in markets including Kazakhstan and Asia. For example, in Kazakhstan, unofficial retailers were the ones that sold mobile phones before Samsung group invaded the market. Samsung used the needs of the people, which was the desire to possess communication devices at a lower price, and therefore it maintained its competitive advantage. Some of the competitors of Samsung group in the electronic devices industry include Apple as the main competitor, LG, HTC, Sony, Nokia and recently Huawei and Lenovo. The diversification of competitors has helped the company in using the straddle positioning strategy where the difference in product points for a competitor is transformed into parity points for the other. The main reason that Samsung still holds top positions in the electronics industry is that of its strong image or brand created by the company's long history and quality of its materials. It is however projected that the electronic industry of Samsung group will be falling in market share because of fierce competition and reduction of quality in its products unless the right measures are taken into account. The recent halting of the sale of Galaxy Note 7 smartphone and recalling of over 2 million washing machines represent the downward trajectory of Samsung in the last few months. This drop in quality of the products is the current issue that faces Samsung as a technology giant. The company had to delay shipments of the Galaxy Note 7 smartphones, and this wiped approximately 6.3 billion pounds off the market value. Apart from issues with the quality of products, the company has faced corruption scandals, and as recently as January 2017 top company managers were accused of being involved in the Choi-gate corruption scandal. Question 4 Samsung’s group next leader faces many challenges in maintaining the company’s competitive edge in several of the industries the company is involved in. Assuming that I was elected the CEO of the company, finding new sources to ensure growth and development through several management styles would be my focus. Ensuring the trust of stakeholders in the financial and political sector is one of the major issues. The technology of smartphones and semiconductors is shortening in the recent times, and competitors are racing against times to ensure that they are ahead in innovation. The sales growth of smartphones is slow, and this means fewer earnings. As the CEO of the company, I would focus on investing in gadgets especially smartphones with innovation on virtual reality, flexible displays, and next generation memory. Apart from the smartphone industry, health would also be one of my key focus areas. I would put into place objectives that would ensure the company would be a leading manufacturer of biopharmaceuticals through Samsung Biologics. Maintaining and returning Samsung group to its peak in the rapidly dynamic markets would be a hard task. However, through several management techniques including staff management and hiring of additional competent employees, I would be successful in returning the company to its best. Improving employee production would be one of my focuses and some of the management practices I would employ include. Ensuring the employees at all, levels in the organization get economic incentives including commissions and awards. The second would be providing training to improve the skills and knowledge of the employees and therefore ensuring that the level of production remains top-notch and therefore the company's competitive advantage is maintained. Finally, ensuring that the communication process is effective between all management and employees and between the employees themselves (Robbins et al., 2015). These strategies will ensure that the company maintains its employee production at the top level and will ensure the company grows. As a CEO, through the management practices above of my employees, I would require results from my staff. They should be good in making decisions, effective planners and organizer, uphold integrity, good in problem-solving, disciplined, and interested in learning and training to improve their knowledge (Sommerville, 2007). With this king of employees, Samsung will return to being the giant it was as the issues with the quality of products and corruption will be dealt with. To ensure that employees with the characteristics above are hired, then the hiring process has to be effective. The hiring process will not be discriminative in any manner whether regarding age, race, gender, sexual orientation, or physical condition. By keeping the hiring process clean, then the employees that will be hired at Samsung would be qualified. With highly productive employees Samsung will grow and develop even beyond its previous giant status in all its industries. References Jethro M. & Kwon, K. J., 2016. ‘Samsung is recalling the Galaxy Note 7 worldwide over battery problem’ CNN Tech, [online]. Available at: http://money.cnn.com/2016/09/02/technology/samsung-galaxy-note-7-recall/ [Accessed 24 March 2014]. Robbins, S. P., Bergman, R., Stagg, I., & Coulter, M., 2015. Management. Sommerville, K. L., 2007. Hospitality employee management and supervision: concepts and practical applications. Hoboken, N.J, Wiley. Song, Jung, 2008. ‘Samsung faces one of its biggest challenges,’ Financial Times, [online]. Available at: https://www.ft.com/content/ce073e32-0ca6-11dd-86df-0000779fd2ac [Accessed 24 March 2014]. Read More