Samsung: Change Everything but Your Wife and Kids

Illustrated by BB/Paris

A recent visit to the Centre for Creative Economy & Innovation in Gyeonggi province of South Korea was revelatory. Bottom-line: Giant corporates are crashing in ranking. Recourse: Co-operate with innovative start-ups to energise the system with dynamism and growth.

Samsung India had increased its sales by 30-40% in the past years. It perforce halved its target to 15-20% in face of stiff competition from Chinese products and Apple in the smartphone sector. It faces tough competition with Sony in television sets and has been trailing behind LG in home appliances.

Globally, the thrust of Samsung has been to push for marketing. In 2013, it spent 13 billion dollars on marketing, which was 1.3 billion more than on R&D. This trend may be set to change due to several factors.

In early 2016, the South Korean headquarters of Samsung planned a 10% employee lay-off in face of losses in the smartphone sector. This impacted India operations, where the talk was about a lay-off of upto 5%. Samsung India is the headquarters for south west Asia, providing employment to over 45,000 people.

Giants do not give up easily. According to Reuters, on April 21, 2016, Samsung announced, “it plans to adopt a corporate culture akin to a start-up, seeking to become more nimble as growth slows”. Samsung announced, “We aim to reform our internal culture, execute as quickly as a start-up company and push towards open communication and continuously innovate.” This includes flexible working hours, loosening the dress code, less pressure to attend after-work drinking sessions, cutting down on unnecessary internal meetings and simplifying reporting procedures.

The announcements are expected to give a fillip similar to 1993, when Samsung Group patriarch, Lee Kun-hee, proclaimed, “change everything but your wife and children”. Samsung is here to stay? Yes, maybe…