Founder Of Samsung Electronics Commerce Essay

Samsung was named by Lee Byung-chul, laminitis of Samsung Electronics when he established the Samsung Trading Company on March, 1938. Sam in Samsung is defined as strong, abundant and large ; while “ Sung ” means high and bright. ( Chnag, J. H. , 2010 ) Interestingly, Samsung ‘s beginning was non affecting electronics. Initially, Chairman Lee set up a trade export company in Korea that sold fish, veggies, and fruit to China. Start from 1958, Samsung began to spread out into other industries such as media, fiscal, ship edifice and chemicals and Samsung Electronics was established under subordinate of Samsung Group in 1969. ( “ Samsung History ” ) The company so expanded to semiconductor concern and became the first chip-making installations in the state during that clip. Samsung Electronics focused on four countries which are digital media, semiconducting material, telecommunication web and LCD digital contraptions. ( “ Wikipedia ” , 2012 ) In 1993, the “ lightest ” nomadic phone of its epoch was developed. ( “ Samsung History ” ) Finally, it surpassed Sony to go universe ‘s twentieth-largest and most popular trade name. Samsung was the universe ‘s largest maker of OLEDs with 40 % market portion universes broad and 90 % portion of planetary AMOLED market. More than 600 American patents and 2800 international patent are owned by Samsung Electronics in 2006 that makes it as the largest proprietor of AMOLED engineering patents. The company besides became the second-largest mobile-phone shaper crushing Motorola in 2007 for the first clip. In 2009, it became universe ‘s largest engineering company catching Hewlett-Packard step by gross revenues. In 2010, it produces 30 nm-class DRAMs and 20 nm-class NAND flashes which were the first clip in the universe. At 2011, it is the universe ‘s largest Mobile phone shaper and second-largest semiconducting material bit shaper. Samsung Electronics became the largest smartphone seller due to gross revenues of Galaxy SII and Galaxy Note devices. ( “ Wikipedia ” , 2012 )


Mechanistic organisation is a bureaucratic organisation which adheres to the chain-of-command rule, with each individual controlled and supervised by one higher-up. The construction of this organisation is taller than organic organisation. Besides, many regulations are developed and the determination devising procedure is centralized. Each employee has fixed responsibilities and the communicating channels are formalized in such stiff hierarchal relationship.

Samsung Electronics is a type of mechanistic organisational construction because it has stiff hierarchal relationships.

Figure 1:

( Chang, S. J. , 2008 )

Figure 2:

( Chang, S. J. , 2008 )

Figure 1 and figure 2 show the concatenation of bid in the company, which widening from upper organisational degrees to take down degree that clarifies who reports to whom. Figure 2 shows that there are tonss of sections under the control of Chief Executive Office. Employees have their fixed responsibilities in several section. For case, employees who are specialized in bring forthing french friess are working under french friess maker whereas employees who are extremely skilled in bring forthing nomadic phones are working under nomadic phone maker. ( Robbins, DeCenzo, and Coulter, 2012 ) These two figures besides clearly show that Samsung Electronics is composed of tall organisational construction. All of the powerful governments are held by the top direction of the company which is Lee Kun Hee, the president of the Samsung Electronics with the aid of the Office of Secretaries and sometimes referred to as “ emperor direction ” or “ absolutism ” . ( Chang, S. J. , 2008 ) Office of Secretaries helped president to command and direct the single affiliates. Their chief map are finance and accounting, scrutinizing, planning, public dealingss, and human resource direction, including the hiring and fire of all executives within the organisation. Even the of import strategic determination and ample investing determination have to be examined by the office foremost. The per centum of determination made by the president is 20 % ; by Office of Secretaries is 40 % ; by affiliate presidents is 40 % . ( Chang, S. J. , 2008 ) In other word, all of the of import determinations are decided by the president, Office of Secretaries and affiliate presidents. As such, Samsung Electronics implement centralized determination authorization.

The communicating channel of Samsung Electronics is formalized. Formalization describes how an organisation ‘s occupations are standardized and the extent to which employee behaviour is guided by regulations and processs. This component makes the procedure of sequence modus operandi and regular. Therefore, there will be minimum perturbation to an organisation map if there are people being replaced. In Samsung, the forces map is under CFO while CFO studies to and receives orders from CEO. ( Chang, S. J. , 2008 ) For case, when the company needs to do an investing, the proposal is written by the related concern unit. Then, the proposal is reviewed by the finance section, which is so passed to finance squad of Office of Secretaries after CFO reports the proposal to CEO. Finally, the proposal is approved by Office of Secretaries and Chairman. ( Chang, S. J. , 2008 )

Many regulations could be found in Samsung Electronics and this lucifer with the feature of mechanistic organisation. Harmonizing to Samsung Electronics Global Code of Conduct, all the employees should follow the codifications and the concern rules to follow with Torahs and ethical patterns every bit good as to show their committedness to societal duty. ( Samsung Electronics Co. , Ltd. [ SECL ] , 2006 ) The planetary codification of behavior is served as behavioural guidelines and judgmental criterions for the employees, which encompass the riddance of nationality or gender favoritism, crystalline revelation of concern information, client information protection and spouse coaction. For illustration, harmonizing to principle 2-2-2 from the Global Code of Conduct, the company will guarantee that any proprietary information acquired through its concern activities shall be recorded and safely kept and managed as rational belongings. In 2011, zero-tolerance rule was declared in all instances of misconduct and unethical concern on “ Law Day ” . All employees and executives have to subscribe a pledge of conformity to hold of taking duty for any misdemeanor or misconduct. ( Soung, S. S. , Eui, H. J. , Dae, S. P. , Jin, Y. L. & A ; Yun, J. S. , 2012 )


Planing includes specifying ends, set uping scheme, and developing programs to organize activities. In Samsung, their vision is set by the top direction that is “ Inspire the universe, create the hereafter ” . This vision 2020 shows that their committedness in animating the universe by bettering their three key strengths which are “ New Technology ” , “ Advanced Products ” , “ Creative Solutions ” and besides promotes Samsung Electronics ‘ nucleus web which are industry, spouses and employees with the attempt to lend a better universe and with batch of experiences for all. Besides, Samsung besides aims to accomplish one of the top five trade names in the universe by 2020 and established three strategic attacks in direction which are creativeness, partnership and endowment. ( “ Vision ” , 1995-2012 )

( “ Vision ” , 1995-2012 )


Leading includes actuating employees, directing the activities of others, choosing the most effectual communicating channel, and deciding struggles. Office of Secretaries takes the taking function in Samsung as they carry out coordination whenever there are struggles happen. ( Chnag, J. H. , 2010 ) However, the synergisms may be created via nonvoluntary cooperation or decree as the concern units have to accept its declaration. ( Chang, S. J. , 2008 ) Besides, the Secretarial Offices spread company doctrine and better concern coordination and information, which are shared among affiliates. ( Chnag, J. H. , 2010 ) The employees of this company are motivated by the doctrine of life by strong values is the key to good concern. Those values encompass people, excellence, alteration, unity and co-prosperity, together with the Samsung codification of behavior are the extremist for them to do every determination. ( “ About Samsung ” , 1995-2012 )


Forming includes finding what undertakings are to be done, who is to make them, how the undertakings are to be grouped, who reports to whom, and who will do the determinations. Samsung Electronics has a strong concern division construction that is managed independently by concern unit directors. The company is divided into five sectors, which are Digital Media, Semiconductors, Telecommunications, Digital Appliances and LCDs. Within these sectors, there are 13 Global Business Managers ( GBM ) who responsible to form the house along major merchandise divisions in footings of forces, gross revenues, and production within their several divisions. ( Chang, S. J. , 2008 ) Employees are divided harmonizing to their specialize and accomplishments into different undertakings to increase work end product. ( Robbins et al. , 2012 ) Any proposal of investing that is written by GBM should be reviewed by the finance section, followed by CFO. Then, CFO reports to CEO. Finally, the proposal is approved by Office of Secretaries and Chairman. ( Chang, S. J. , 2008 )


Controling includes monitoring public presentation, comparing it with ends, and rectifying any important divergences. In Samsung, the overall public presentations of BOD, CEO and employees are controlled by Audit Committee, which has a wide scope of audit right from top to bottom. ( “ Ethical motives Management ” , 1995-2008 ) For illustration, they have the right to ask about fiscal studies from the BOD and employees at any clip, the right to claim to suspend illegal activity of the company BOD member, the right to name a general stockholders ‘ meeting and so on. There are besides separate audit squads that under the direct control of CEO with the responsible of promoting employees to adhere to the pattern of direction by moralss. ( “ Ethical motives Management ” , 1995-2008 )

A ) What seem to be the most of import things taking to the success of the Samsung


To be successful, Samsung Electronics is traveling planetary. Samsung Electronics is forcing the Galaxy S smartphone to dispute Apple Inc. ‘s iPhone and contract the spread with leader Nokia Oyj. It helped Samsung Electronics quadruplicate one-year gross to139 trillion won ( $ 116 million ) in the 10 old ages that ended in 2009. Samsung Electronics portions rose 10-fold during that clip. ( Lee, Y. , 2010 )

Besides, Samsung Electronics has the good planning accomplishments as they able to see the concern chance in the industry and set the peculiar ends to prosecute. They able to descry the countries, which are little but turning fast. ( “ Samsung ” , 2011 ) Such countries that spotted by Samsung are capital-intensive. Therefore, it is hard for their challengers to maintain up. First, Samsung will tippytoe into the engineering in the industry to acquire familiar with it. Then, they will wait for the suited minute that the ‘window of chance ‘ clears. For illustration, in 2001, Samsung catch the chance of rapid growing of the liquid-crystal shows that cause the honkytonk of the monetary value. They turned the liquid-crystal shows into telecastings. ( “ Samsung ” , 2011 )

Samsung Electronics is advanced in package and David Yoffie, a professor at Havard Business School in Boston said “ Leading extremist invention in the engineering universe today requires strength in package, non merely hardware. ” ( Lee, Y. , 2010 ) . Samsung Electronics has grown by analyzing their challengers to better fabrication and design. Samsung electronics besides hired a group of Nipponese Design Consultant to measure Samsung interior decorators. Besides, their experient interior decorators are sent to work abroad in diverse industries. By making this, Samsung design scheme could affect several enterprises and they began to implement a planetary trade name communicating scheme. As new engineerings are being invariably introduced to the market, Samsung engineers strive to understand what clients need in front of rivals and adjust their thought to develop original and advanced merchandises that will run into those demands every bit good as new engineerings to take the future market. Therefore, the new markets had pioneered continuously by them. ( Samsung Electronicss: Success By Design, 2008 )

B ) What do you see as the major challenges confronting by Samsung Electronics over the following

five old ages?

The major challenge that will be faced by Samsung Electronics over the following five old ages is how to construct a stronger and better planetary trade name. This is why the Samsung ‘s planetary selling manager need to measure in how to construct the planetary trade name repute of the company farther and upgrade the company ‘s worldwide trade name image to vie with Apple trade name which has dominated the market portion particularly in Western Europe. The challenge of Samsung ‘s selling manager is the branding schemes in planetary markets and the selling squad has to analyze the organisational kineticss to develop a stronger planetary trade name that recognized by worldwide.

Another challenge that will be faced by Samsung Electronics is the competition over the market portion particularly in smart phone. In this fast paced economic conditions, Samsung need to go on bring forth more and more of the smart phone with improved version and attractive design to run into with the rapid economic growing. The company needs to put and present more of the new engineering and integrate the package and application into the new appliances so that it will non lose out to another rival. Invention and creativeness are of import in this to pull the appliance lover and if the company fails to come out with a new and appealing merchandise, they will be overcome by another rival such as Apple, HTC or Nokia.


Samsung electronics have a centralised construction doing the top direction own the governments and powers over all the of import determinations. This make the determination doing procedure fast and fleet and can transport out rapidly. In this manner, organisation is more efficient as execution of any programs, thoughts or policies can be carried out rapidly without any hold and this is really of import particularly to cover with the fast paced economic and competition in market. This is supported by a survey in diary by Choong Y.Lee. ( Choong, Y. L. , 2012 ) However, overly centralisation in organisation is besides non good for the company. All of the of import determinations are made by the top direction while the center and first line direction can non voice out their sentiments but to follow the order of the top. If the determination made by the top direction is wrong, it can impact the company concern and therefore take downing the company net incomes. Therefore, a good leading is of import to take the company. This is supported by the professor Chang Sea-Jin which stated there is no warrant that good leader will prolong and even they can do error as good in his book reappraisal. ( Chang, S. J. , 2008 )

Samsung Electronicss are holding hierarchal direction construction which reflects the importance of senior status in the Korean civilization. The hierarchal construction brings synergism when things are traveling good but could potentially be black if one portion of the procedure goes off from planned. ( Kim, J.C. , 2012 ) This is supported by Professor John Kotter in his article “ Havard Business Review ” that hierarchal organizational are frequently inflexible. Hierarchical organisation work in standardised procedures but does non utile in dynamic environments. They are slow to respond to new chances, which frequently require transformative alteration. ( Basu, C. , 2012 )

Besides, harmonizing to research workers G.M. Stalker and T. Burns, mechanistic organisations use hierarchal top-down constructions while organic organisations use more flexible constructions and work best in fluid and unpredictable concern climates.A Organic structures depend on personal interactions instead than a formal concatenation of bid that allow the organisation to react rapidly and efficaciously to altering fortunes in ways that the hierarchal construction can non. Samsung Electronics should do it concern to understand such construction so that it can hold the benefits of both. ( Thompson, S. , 2012 )

Samsung Electronics has many regulations and ordinances that are governed by the top directors of the organisation. When the top directors are unable to command the lower-level activities, they themselves will replace the regulations and ordinances. Since they have the authorization to engage and fire the executives and employees in the organisation anytime, the employees have to accept the undertakings given by the directors and follow whatever they said. Employees are invariably observed and monitored by top directors during their on the job period to guarantee that they are non doing any errors or go againsting the regulations. Consequently, weariness are accumulated when employees are working under such great force per unit areas that known as organisational weariness.

Furthermore, employees of Samsung Electronicss have to follow the Global Code of Conduct, which consists of a figure of rules. ( SECL, 2006 ) For case, under rule 1-4-1, it stated that ’employees shall non impute their personal political sentiments and behavior to the company, or do such sentiments or behavior to be attributed to the company ‘ . Besides, rule 2-4-3 showed that ‘the company will non let its officers and employees, while in office, to move as figure of boards of company with struggles of involvement or take part in competitory concern activities. ‘ ( SECL, 2006 ) There are still a big sum of regulations and rules that the employees should follow with and that can be referred from the Global Code of Conduct, 2006.

The direction of Samsung Electronics is known as ‘fear-based direction ‘ . The employees have to be loyal to their company in order to remain in the company. However, organisational weariness will convey negative effects to the company. If the employees or executives are dismissed against their volitions for any grounds by the top directors such as the president or the Office of Secretaries, their choler will take to their treachery and loss their trueness. ( Chang, S. J. , 2008 ) There were several instances on which the employees of Samsung Electronics tried to sell the proprietary engineerings to Samsung ‘s rivals and to other companies. ( Chang, S. J. , 2008 )


In a nutshell, Samsung Electronics has a mechanistic organisational construction as it has stiff hierarchal relationships and tall organisational construction. In the company, each employee has fixed responsibilities and they have to follow tonss of regulations. Besides, the determination devising procedure is centralized and the communicating channel is formalized. In Samsung, the ends or visions are planned by the top direction. Office of Secretaries takes the taking function as they responsible to work out the struggles every bit good as aid the president to command and direct the single affiliates. Besides, they besides spread the company doctrine to actuate the employees. Samsung Electronics is divided into Digital Media, Semiconductors, Telecommunications, Digital Appliances and LCDs, which are managed by concern unit directors. The overall public presentations of Samsung Electronics organisation are controlled by Audit Committee.

In this assignment, we have learned the features of the two types of organisational constructions, which are mechanistic organisation and organic organisation that concern the work specialisation, departmentalization, authorization and responsible, centralisation and decentalisation, span of control and formalisation. After analysing these factors and seeking all the related information of Samsung Electronics, we could reason that this company is a mechanistic organisation. Therefore, our analysing ability could be strengthen when carry out this assignment. Besides, we have a better apprehension to acknowledge and distinguish these two organisation theoretical accounts. Furthermore, more cognition about this company could be gained during the research.