The crack Samsung PR department strikes again. They give us another delicious juxtaposition, this time in the Chosun Ilbo, and it includes the obligatory comment from Samsung CEO Lee “Sandwich” Kun-hee:
Corporate Culture at Samsung Is Changing
…The Samsung Group is leading the way in improving corporate culture because of a realization that the “creative management” stressed by chairman Lee Kun-hee cannot take root under the current bureaucratic corporate culture at the conglomerate
…A Samsung Group staffer said efforts to improve the corporate culture at the conglomerate are nothing new. He said the latest measures came about from the need to change the basic make-up of Samsung’s corporate culture and raise it to the global level rather than insisting on past practices, since this is the only way for Samsung to reach a higher level.
So how is Samsung changing it corporate culture? How will it implement creative management? Who will raise Samsung to a “global level”? The day before they give us a hint:
There are signs of impending change in the Samsung Group, and all eyes are on group chairman Lee Kun-hee’s son and heir apparent Lee Jae-yong…
There are obstacles. Lee is still waiting for the Supreme Court’s decision on the Samsung Everland case; the quasi-holding company is suspected of having sold him convertibles bonds at below-market prices in an underhand move to transfer group ownership to him.
I could snipe at the younger Lee and his qualifications, however what I really want to know is if Samsung’s succession planing like this, no trivial thing mind you, will “change the basic make-up of Samsung’s corporate culture and raise it to the global level”.
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For the record, though, family ownership/control of corporations is in fact the dominant form of corporate governance, especially in the case of publicly traded corporations in Europe, the Middle East, and Asia. The American/British experience of separation of ownership and management is actually fairly deviant from the world historical perspective of corporate governance — whether or not it’s necessarily a superior model is what’s being questioned by the “Asian Values” gang. (I would tend to say that our way is better, but that’s me.)
Even in the United States there are plenty of family-controlled corporations which trade shares on public markets — think Ford Motor Company. Job security there is tough if your name is not Ford. The Fords maintain control through the establishment of special classes of stock with diluted voting rights for non-Fords; the Korean Commercial Code, however, has in the past not allowed that kind of thing. Perhaps it should, since it’s definitely in their basic makeup to want to hold onto “ownership” rights even though the law says it’s illegal.