Two years have passed since Samsung Group Chairman Lee Kun-hee left his role in management following a stroke he suffered on May 10, 2014. Samsung Electronics Vice Chairman Lee Jay-yong, heir-apparent and the sole son of Chairman Lee, has filled the leadership vacuum in the chairman’s absence by turning to “management based on communication.”
Vice Chairman Lee does not express his views and opinions publicly, but he internally demonstrates his own management style through direct communication, decision-making and direct instruction. “Chairman Lee not only draws up a big picture of the future of the group, but also he makes decisions on the important issues after participating in meetings and hearing views,” a group official said.
A representative case is Samgsung’s introduction of Samsung Pay, a mobile payment service system in which Vice Chairman Lee has set the direction whenever it was at a crossroads.
In reality, the junior Lee played a leading role in the disposing of Samsung TechWin and Samsung Fine Chemicals to Hanwha Group.
Samsung Electronics is engaging in aggressive M&A activity to focus on its mainstay businesses, a sign the company is on a roll under the stewardship of Vice Chairman Lee. The junior Lee has emphasized tactics surrounding globalization, pragmatism, filed management, rationalism, youth and communication.
Vice Chairman Lee is considered the most active executive in Korea, as illustrated by recent meetings with foreign IT company CEOs to expand global networks, including Apple CEO Tim Cook and Facebook CEO Mark Zuckerberg. He is credited with enhancing Samsung Electronics’s global standing through exchanges with foreign CEOs.
He is lending an ear to diverse voices, not only from the group’s Future Strategy Office, but also from outside advising groups, including IT experts and financial authorities.
Samsung Electronics recently declared the so-called “Start Up Samsung Culture Innovation” in which the company wants to innovate awareness and work in the conformity of a global company by eliminating mindsets and practices that do not suit the trends of the times. This appears to be a reflection of the junior Lee’s management style. The group’s move to change in-house communication to respond quickly for the survival of a global company is at the center of Vice Chairman Lee’s management style.
Chances are not high that Vice Chairman Lee will take office as chairman of the group soon, replacing his father. He took over as chairman of the Samsung Life Public Welfare Foundation and chairman of the Samsung Foundation of Culture — two of the three figurehead positions the senior Lee possesses — on May 15, 2015.
Samsung Group has set “practicality” as its 2016 management buzzword, indicating additional group-wide restructuring. Group CEOs have been told to explore new growth businesses and arm themselves with a sense of crisis, as the year 2016 is forecasted to have starker business circumstances than 2015.
Under the stewardship of Vice Chairman Lee, Samsung Group is stepping on the accelerator to restructure subsidiaries with a focus on three areas — electronics, financials and bio. The group has sold off chemicals and defense units that have posted steady profits, and it is expected to dispose of more subsidiaries, including its construction, advertising and food service units. The group has undergone fast changes since the absence of the senior Lee. In total, seven subsidiaries of the group have taken away the Samsung logo — six were disposed of to others, and one was merged with another subsidiary. Cheil Industries was merged with Samsung C&T Corp. Cheil Industries, formerly known as Samsung Everland Co., is the de facto holding company of Samsung Group, and Samsung C&T Corp. is the group’s trading & construction unit.
Samsung Group is stepping on the gas to nurture its bio business as one of the company’s future growth engines. The group is accelerating its efforts to foster the bio business by establishing Samsung BioLogics, a bio pharmaceutical contract manufacturing company, and Samsung Bioepis, a biosimilar maker. Samsung BioLogics launched the commercial operation of its first plant, and the company is soon to begin the operation of the second plant.
Samsung Bioepis broke ground for a project to build its third plant, capable of producing 360,000 liters annually by 2018. The company has signed three supply contracts for bio pharmaceuticals with BMS of the United States and Roche of Switzerland.
