Samsung to reform management culture to act like startup
by Associated Press
SEOULMar 25, 2016 - 12:00 am GMT+3
by Associated Press
Mar 25, 2016 12:00 am
The world's largest maker of phones and television sets, plans to revamp its corporate culture to become more like a lean startup as it copes with sluggish demand and growing competition. Samsung said its executives and workers pledged to reduce hierarchical practices, unnecessary meetings and excessive working hours in a "Startup Samsung" ceremony held yesterday at its headquarters in Suwon, South Korea. The first step in this new culture of flexibility? Requiring all its executives to sign a statement promising to scrap the company's traditional ways.
Samsung is searching for new business strategies as a father-to-son leadership transition looms. Lee Jae-yong, 48, is expected to succeed his ailing father, Lee Kun-hee, at a time when Samsung's mainstay semiconductor and phone businesses face intensifying competition from Chinese rivals. Samsung has its eye on expanding into health care and pharmaceuticals, but has responded slowly to hot Silicon Valley trends such as autonomous driving and artificial intelligence.
The company says it will announce in June how it plans to reorganize its workers and eliminate red tape. It said new vacation systems would allow employees to spend more time with their families and take breaks for self-improvement.
But analysts said Samsung faces a huge challenge in leveling a seniority-based corporate that is decades old. Some suggested the campaign also might be aimed at identifying underperforming workers and trimming the company's managerial ranks to cut costs.
Samsung's seniority-based management ways may have helped it quickly catch up with Sony and other Japanese manufacturers, but they also have hindered recruitment of top talent. That has been a liability as the company competes with Silicon Valley firms that allow workers more independence and flexibility.
Last year, 26,000 Samsung employees participated in online debates, pitching in ideas. Some have been allowed to build products or launch services outside their original job descriptions at internal Samsung "startups." The company also introduced flexible working hours last year though current employees said work hours are still too long.