Organisational Structure and Leadership Style

Of
Samsung .

Submitted by
Pragun Jain
A3104619017

Under the Supervision of

DR. VIDHI TYAGI
ASSOCIATE PROFESSOR
Organisational Structure
An organizational structure is a system that outlines how certain activities are directed in
order to achieve the goals of an organization. These activities can include rules, roles, and
responsibilities. The organizational structure also determines how information flows
between levels within the company.
A company’s organizational or corporate structure is the combination of workforce groups,
resources, and interconnections among groups and resources in the business. The
organizational design determines how the organizational structure is developed and
managed.

Samsung Organizational Structure:

Samsung organizational structure is divisional and the company is divided into three key
divisions: IT & Mobile Communications (IM), Consumer Electronics (CE), and Device Solutions
(DS). The rationale behind the choice of divisional organizational structure relates to Samsung’s
large product portfolio and differences between products and services the company offers to the
market.

Accordingly, Samsung’s each division is managed separately taking into account the
characteristics of their products that have implications on new product development, marketing,
selling and other aspects of the business. Moreover, Samsung Electronics has more than 200
subsidiaries around the world.
As it is illustrated in figure above, apart from three divisions, Samsung organizational structure
also integrates corporate management office and Samsung Advanced Institute of Technology
(SAIT). Corporate management office deals with overall management of the group and also has
administrative responsibilities. SAIT is Samsung Group’s R&D hub, established as the incubator
for the development of new products and services.

The senior management completed its review of optimal organizational structure on April 2017
and decided not to convert to a holding company structure.[1] Following a series of recent
scandals involving Samsung management that culminated in Jay Y. Lee, the former de facto
head of the Samsung conglomerate being jailed for 5 years[2], it can be argued that Samsung
organizational structure will change in the foreseeable future. Specifically, Samsung
organizational structure may change to make governance and decision making practices more
transparent to eliminate or at least to reduce the cases of future scandals.

Leadership programs in Samsung

VALUES-BASED LEADERSHIP   

Samsung Electronics is focused on providing support to values-based leadership practices.

According to recent studies, “national culture emphasizes shared values, whereas corporate
culture emphasizes shared practices”(Hamilton & Bean, 2005). Shared values and shared
practices play an important role in values-based leadership. Values-based leadership
developed at all organizational levels of the company helps to comply with the established
ethical principles. Samsung leaders tend to align personal values with organizational values.
Besides, value based leadership allows promoting employee self-management, reduce the
degree of supervision and control at different organizational levels, ensuring greater respect
between employees, increasing enthusiasm and self-esteem, optimism and dedication to
work. Due to values based leadership, employees have an opportunity to participate in ethics-
oriented practices; develop more effective corporate culture and team building practices.
According to the information presented on the official website, “Samsung is guided by a
simple philosophy, strong values and high ethical standards that inform our work every day.
In everything we do, we strive to help people live better lives” (Samsung Electronics, official
website, 2016). The company’s vision statement is the following: “Samsung is dedicated to
developing innovative technologies and efficient processes that create new markets, enrich
people’s lives and continue to make Samsung a digital leader”

STRATEGY AND BUSINESS

Samsung Electronics strategy is aimed at maintaining global leadership. In fact, the company
posts the biggest gain in the value of its brand. The corporate identity developed by Samsung
helps to strengthen the competitiveness of the company in the global arena. Researchers
argue that Samsung combines strategy, creativity and leadership to achieve success as a
global brand. Currently, the majority of products manufactured by Samsung are sold across
the world. The company’s strategy supports business development and growth. As a result,
Samsung branded products are widely recognized by customers. The marketing approach
used by Samsung allows enhancing investments in marketing. The reliance of Samsung’s
strategy on the widely accepted corporate name is perceived as the so-called master brand
strategy.
Nevertheless, there were significant changes in Samsung’s strategy caused by environmental
challenges. Samsung had to turn to product differentiation strategy from the previous cost
leadership strategy. This approach allowed the company to achieve competitive advantage.
According to experts, “until the late 1980s, Samsung’s strategy was to produce massive
quantities of cheap products by taking advantage of low cost labor” (Kumar, 2013, p. 100).
Besides, the company is focused on developing its own technological innovations by means
of implementing technology development strategy. Launching of eight research centers and
significant investments in research and development of new products allows the company to
conduct research work effectively. Finally, Samsung has developed and implemented an
effective promotion campaign that helps to improve profitability and address competition
with other companies for leadership in Korean markets. Changes in the business environment
contribute to the company’s product development efforts (Kumar, 2013).

LEADING

The company is committed to significant social responsibility contributions, placing

emphasis on education opportunities, job training and improvement of health care services.
The major programs are specially designed for enhancing corporate citizenship, providing
support to a wide range of social issues across the world. According to the annual report,
Samsung’s leaders are “leading the way in a range of green management and environmental
activities, such as producing green products and workplaces and working to reduce
greenhouse gas emissions” (Samsung Electronics, Annual Report, 2014). Leaders are focused
on using the proper strategies to maintain safe working environment in which all employees
feel confident and secured, work effectively and healthfully. The company supports its global
business partners, promoting effective partnerships to succeed in shared growth and
sustainable development.

Programs for employees

There are many programs specially developed for employees to improve their leadership
skills. All employees have an opportunity to become professionals in their respective fields of
work through their involvement in professional certification programs and world-class
leadership development programs. The leadership programs are aimed at developing strong
leaders at various organizational levels. Employees can improve their skills and use effective
tools to ensure the company’s sustainable development and growth

Leadership Training for Managers

DEVELOPING PERSONAL LEADERSHIP

At Samsung Electronics, managers have an opportunity to develop personal leadership skills

that play an important role in everyday business operations. Managers are taught the
differences between leadership and management; explore leadership experiences and analyze
the meaning of values in management. According to experts, “Samsung is today regarded as
one of the premier South Korean large chaebon, the group that achieved global success in
multitude areas” (Robbins et al., 2014, p.62).  This success affects the establishment and
continuous improvement of management initiatives. New policies address the needs of
managers, both professional and personal needs.    

PROBLEM ANALYSIS AND DECISION MAKING

At Samsung Electronics, managers are encouraged to participate in problem analysis and

decision making due to creative performance based system.  

IMPLEMENTING THE DELEGATION PROCESS    

The implementation of delegation process is based on three principles, including

responsibility, authority and accountability. The key part of delegation process sis evaluation
of performance. Samsung Electronics provides regular achievement according to the
established professional and personal goals. The results of these tests help to implement
rewarding practices, promotion and professional development and leader selection (Samsung
Electronics Sustainability Report, 2016).

THE COACHING PROCESS

In order to improve the skills and abilities of human resources, Samsung Electronics provides
support of professional growth, establishes a creative organizational culture, and pursues
diversity in the workplace. Samsung’s managers effectively operate the system through well-
developed coaching process. Samsung’s HR team “includes specialized groups focused on
areas such as training and development, organizational capability, and creative culture”
(Samsung Electronics Sustainability Report, 2016).      

HANDLING MISTAKES 
         
Samsung Electronics is focused on conducting various activities to prevent any mistakes and
risks. The established systems of business continuity allows handling any problems
immediately to prevent occurrence of inevitable accidents, minimize damages and ensure
successful business operations.  Managers are trained to use various communication
channels, such as work council, counselling centers, briefing sessions on management,
employee satisfaction surveys and others to achieve success in handling mistakes (Samsung
Electronics Sustainability Report, 2016).

CONFLICT MANAGEMENT     

At Samsung Electronics, conflict management practices allow managers to deal with

complicated situations.

MANAGE CHANGE EFFECTIVELY       

At Samsung Electronics, due attention is paid to managing chance effectively. Samsung
Electronics is aimed at fulfilling the established roles and responsibilities to manage
organizational change by means of compliance-driven management practices that are based
on the company’s laws and principles. According to report, “compliance with laws and ethics
is Samsung’s No. 1 business principle, and to this end, the company is committed to
eliminating any unlawful and unethical acts while fostering an organizational culture of
integrity” (Samsung Electronics Sustainability Report, 2016, p.52).

STRIVING FOR CONTINUOUS IMPROVEMENT

The company is focused on continuous improvement, providing training programs specially

developed for various levels of jobs and positions for employees and managers. These
programs include Core Program, Leadership Program, and Expertise Program. Besides, “on
an annual basis, four million people participate an average of 8 hours with training programs
around the world” (Samsung Electronics Sustainability Report, 2016, p.44).

Collaborative Leadership

Collaborative leadership is part of Samsung’s strategy as the company demonstrates solid

organizational knowledge-driven leadership development that contributes to product
development. Employees and managers participate in the areas of collaborative enterprise
knowledge sharing and organizational learning practices. According to sustainability report
findings, “Samsung continuously works hard to ensure it supports a quality-oriented work
style” (Samsung Electronics Sustainability Report, 2016, p.48). It provides flexible working
conditions, which allow adjusting to changing business environment through collaboration.  

EXECUTIVE LEADERSHIP SERIES

Executive Leadership program is aimed at providing a series of interactive seminar activities

that will help to improve one’s ability to ensure confidence in leading the organization.
Leaders have an opportunity to receive practical knowledge and techniques, develop the
proper strategies and provide personal vision of how to become an inspiring and dynamic
leader. Samsung’s executive leadership series help to improve leadership skills through
actionable training courses, which allow assessing business gaps, identifying new business
opportunities, making timely decisions, and assessing the efficiency of leadership practices. 

HIGH POTENTIAL PROGRAM

Samsung offers a high potential leadership program that helps to achieve long-term success
in the global market. There is a need for providing executives with the proper knowledge and
experience to handle the emerging challenges related to transition to new complicated
leadership roles. This program allows executives to learn more about how to ensure
leadership practices under pressure, how to make organizational change, how to build
effective teams and facilitate talent development throughout the company.
 HIGH POTENTIAL (HIPO) DEVELOPMENT PROGRAM  
   
High potential (HIPO) development program allows making improvements in the business
environment of the company. For Samsung Electronics, it is crucial to foster HIPO in order to
keep employees highly motivated and enthusiastic to work towards the company’s success in
the market. At Samsung Electronics, employees are highly engaged in various activities that
allow them to stay motivated. Samsung employees are committed at the rational and
emotional levels. At the rational level, employees are interested in compensation and job
satisfaction, while at emotional level, they enjoy interpersonal relations, teamwork, as well as
follow the proper rules and regulations to comply with the company’s values and vision. For
Samsung’s employees, it is very important to be perceived as high potential because they
value their aspirations, abilities and engagement. According to Samsung Electronics
Sustainability Report (2016), people are motivated and have desire for recognition, career
advancement and relevant rewards. They have the proper intellectual, technical and
emotional skills deal with complicated situations. The level of their personal connection
toward the company’s mission is high. HIPO reflects the level of sustainability pursued by
Samsung Electronics. The identified “harmonious co-existence and co-development of
humans, society, and the environment” affect the formation of high potential leaders
(Samsung Electronics Sustainability Report, 2016). The company’s activities in the areas like
“people, society, and the environment are carried out under the company’s business
philosophy of devoting our human resources and technology to create superior products and
services, thereby contributing to a greater global society” (Samsung Electronics
Sustainability Report, 2016).

THE SALES MARKETING AND SERVICES GROUP (SMSG)

The SMSG group at Samsung is specializes in managing all types of sales and marketing
services, as well as providing technical support for business partners and customers. The
company’s sales and marketing activities are aligned and well-coordinated as Samsung’s
global strategy is targeted at the international market. According to recent report, in 2015, the
economic uncertainties found at the global level affected the company. Some of these
uncertainties include “changes in U.S. monetary policy, increased volatility in emerging
market stock markets, fluctuating exchange rates, and a radical drop in international oil
prices” (Samsung Electronics Sustainability Report, 2016). Undoubtedly, the company’s
sales marketing and services unit used the proper strategies to maintain a sound financial
structure. As a result, “Samsung delivered sales of KRW200.7 trillion and earned KRW26.4
trillion in operating profits on a consolidated basis in 2015” (Samsung Electronics
Sustainability Report, 2016). Besides, in 2015, the company maintained its brand value,
having had the 7-th highest brand value in the global arena (Samsung Electronics
Sustainability Report, 2016).

WHAT DROVE THE SMCG TO EXECUTE HIPO?

There are several factors that drove the Sales Marketing and Services Group (SMSG) to
execute HIPO, namely the need for effective leadership in all areas of the company, the need
for well-trained human resources, the need for pursuing the company’s vison and mission, as
well as the need for ensuring sustainable development and growth. Oh-Hyun Kwon, the Vice
Chairman and CEO of Samsung Electronics, states, “At Samsung, we believe our consistent
growth is due to our employees, suppliers, and customers. In fact, during this difficult time
our employees have worked with unbridled enthusiasm, while our suppliers have been
nothing short of great partners and exhibited a win-win spirit. At the same time, customers
have continued to express their affection for the company” (Samsung Electronics
Sustainability Report, 2016).

Conclusion

Thus, it is necessary to conclude that Samsung Electronics is a powerful player in the global
market due to its perfect leadership. The analysis of the company’s leadership shows that the
company can serve as a role model for other business organizations operating in a highly
competitive market.