Samsung Electronics will unveil a new vision called “Start-up Samsung” this week in a move to learn from start-ups and improve its rigid top-down corporate culture.
The company is expected to reduce emphasis on job titles and give more authority to team leaders.
Detailed plans are expected to be announced Thursday, but industry watchers are already paying keen attention to the winds of change blowing at the nation’s largest company.
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Samsung Group office in Seoul. (Yonhap) |
Korean companies, especially big family-owned ones, have suffered from chronic corporate ills such as a top-down work order, frequent after-hours work, unproductive internal meetings and unfair assessment of performance.
The ills may be by-products of the nation’s rapid growth over the past decades. Under the direction of their charismatic leaders, companies pushed employees hard to generate outcome more quickly and employees were willing to sacrifice their personal life for work.
But now at a time when technological convergence is happening across industries and flexible and creative thinking is key to success, the Korean way doesn’t seem to be working any longer.
“A global tech firm had contacted us for partnership a few years ago, but they gave up the project because of our time-consuming decision-making process,” said an executive of a local carmaker, declining to be named.
“They didn’t understand why every step of the project should be confirmed by the top management, which is normal in Korea.”
Especially in the ever-evolving tech scene where partnerships are ubiquitous, Samsung has good reason to change the way it works, taking a cue from start-ups.
The company has aggressively acquired or invested into start-ups around the world in recent years. The annual investment also more than tripled to 680 billion won ($584 million) last year over the past five years.
Now the company’s key services related to mobile payments, the Internet of Things and virtual reality are all led by start-ups it has acquired during the period.
Its Global Innovation Center, a start-up accelerator based in Silicon Valley, also works like a start-up. Flexible working hours and impromptu meetings in the hallway are part of daily life there.
“We don’t take a big company approach. We move quickly and always stay hungry,” David Eun, president and head of the center, told reporters in January.
“We mix the best practices learned in Silicon Valley and Samsung. That seems obvious, but many companies don’t follow this,” he added.
Samsung believes the ongoing experiment will be explosive when it is combined with the company’s manufacturing supremacy and global sales and distribution networks.
Meanwhile, Samsung’s local rival LG Electronics has also recently renewed its organizational system for better communication among employees. The company is also considering reducing job titles and adopting an absolute assessment system of performance.
By Lee Ji-yoon (
jylee@heraldcorp.com)
