Samsung Group and Samsung Hq

Samsung Group:

Samsung was founded in 1953 by Byoung-Chul Lee as a sugar refining business, and soon got into other businesses such as textile manufacturing and insurance.

Samsung had close realtions with the Korean government, and after the Korean war, the government relied on Samsung and other chaebols to bring economic development to Korea. Together they developed strategies to increase the economic development, resulting in Samsung entering diverse business lines such as paper manufacturing, construction.

In 1959 Byoung-Chul Lee established a headquarters office to decide on Samsung’s future entry and expansions into new businesses.

Samsung used profits from one Samsung company to support other Samsung companies. However the 1997 finacial crisis brought an end to this practice. In order to gain economic stability, the Korean government enforced regulations that Samsung operate their subsidiary companies as legally independent entities. Even though this made Samsung companies self-sufficient they still operated under the strategic directions of the group headquearters.

Samsung Group HQ

The Samsung corporate headquarter would provide strategic directions for new businesses to expand in to, and allocate resources between companies.

The middle managers would generate various ideas on new businesses to expand in too, based on the Samsung group philosophy and long term goals. Then the ideas would be reviewed by the headquarter. If an idea was selected, and a business founded, the leader of that business was entirely responsible for that business. This has been described as a “middle-up-down management”.

Senior Executive Vice President at Samsung Economic Research Institute described the middle-up-down management as a four part self-reinforcing system.

Intuitive wisdom, the chairman would have a vision for the long term direction of the Samsung group that all Ideas would have to match.

Ownership management, the same person who owns a business is the...