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Samsung's Corporate Culture and Success

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Jennet Koh

on 15 November 2013

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Transcript of Samsung's Corporate Culture and Success

Let's Define Corporate Culture...
Samsung VS Apple
Outline of the Presentation
Keywords:
beliefs and behaviours
how a company's employees and management interact
develops organically over time
reflected in many aspects (dresscode, office hours, turnover etc)
Balance between Family and Eiffel Tower
Diversifies and tries everything
Being in perpetual crisis
Always prepared with back up
Driving force:
Lee's relentless dissatisfaction and discipline
Did you know that........
90% of Samsung's products are manufactured by themselves
100 Samsung TVs are sold every minute
In the beginning, Samsung produced noodles
1. Definition, Samsung's culture, interesting information
(Jennet)
2. Evaluation of Samsung's corporate culture, Hofstede's Theory, how successful is Samsung
(Sundar)
3. Distinguish from competitors, eco-management, Samsung's backbone
(Alexander)
4. Samsung's integration of international employees
(Kaiwen)
5. Conclusion, how Samsung's culture led to its success
(Daniel)
Evaluation of
Samsung's corporate culture
, Hofstede's Theory
South Korean culture through the lens of the 5-D Model
POWER DISTANCE
* At a
score of 60
, South
Korea is a
hierarchical
society
.

* People accept a

hierarchical order


INDIVIDUALISM
* At a
score of 18
, South Korea is a
Collectivistic society
.

* It focuses on close
long-term commitment
to the
members of family
, extended family.
MASCULINITY / FEMININITY
* South Korea
scores
39
& is
considered a
Feminine society
.

* People value
equality
,
solidarity
&
quality
in their working lives.

*
Conflicts
are resolved by
compromise
and
negotiation
.
UNCERTAINTY AVOIDANCE
*South Korea scores
85
& is one of the
most uncertainty avoiding countries
in the world.

* It maintain

rigid codes of belief
and
behaviour
.

*
Time is money
, people have an inner urge to be busy and
work hard
,
precision
and
punctuality
are the norm.
LONG TERM ORIENTATION
* At a score of
75
South Korea is a
long term oriented society.

* In
corporate South Korea
, you see long term orientation.

* Priority to
steady growth of market share
rather than to a quarterly profit.
DIMENSIONS OF SAMSUNG
CORPORATE CULTURE
Means oriented vs Goal oriented
* Samsung concentrate's on improving the process, systems & innovation.

* In Samsung culture, they are both M
eans orientated

&
G
oals Orientated
.

Employee oriented vs work Oriented
*
Employees
are
considered as a
Precious value
.

* Samsung shares & cares about its employees concerns over their
health
, childrens
education
, post-retirement life and provide
better working environments
.

* It also provides
legal welfare programs
such as premium subsidies for National Pension, Industrial
Accident Compensation Insurance.

Local vs professional
* Samsung is strongly
local oriented

* It concerns and cares for the
employee’s career
and their family situation.

*
Local Employees
are seen as
important
assets
for the company

Open system vs closed system
* Samsung Culture perfectly combines
open system
orientation
with
employee orientation
.

* It creates training programs for the new employees and practice
job rotation
so that the new employees learn the way the company runs

Internally driven vs. Externally driven


* Corporations such as Samsung consider
customer needs
as the most important problem that the companies need to focus and find the
best solution
s
.

Where are they now?
Products:
Smart phones
Smart watches
Tablets
PCs
Music players
Just some statistics...
How they dominated the market
APPLE
Unique, market changer, design focused
Market leader in terms of design
Fewer models, but each is exquisitely designed
Excellent software-hardware integration (iOS) and app sales
SAMSUNG
Engineer focused, spec obsessed
Quickly releases many products and variations
Constant updates with latest technology and functions
Get inside information on the market through selling its products to competitors (screens, semi-conductors chips)
APPLE
Recipe:
Secretive and secure (isolates them from feedback)
Capital "I" Innovating (creative minds Steve Jobs)
Long development process (8 years for iPad)
Marketing changing process (aim to create)
Results:
Enthralled tech press (new technologies and functions)
Surprised the public (fantastic design and layout)
SAMSUNG
Recipe:
Open and free (constant feedback and improvement)
Try everything mentality (s2 s3 s4 mini see what works)
Release imperfect products and update them (iterate to success)
Market follower (less risk and wider perspective with information of other companies)
Results:
Gauge interest and test capabilities
Lower cost of product launch
Satisfy everyone’s different taste
Image: http://cdn0.tnwcdn.com/wp-content/blogs.dir/1/files/2012/08/gview.png
Samsung's Eco Management
Goal to become a world leading eco-friendly company
Long term investment
Save energy, more efficient
Sustainable development
Sustainable future
Eco-management 2013 Plan
Reduce greenhouse gases (manufacturing of products)
Reduce indirect greenhouse gases (TV, refrigerator, A.C)
Recyclable materials
Invest SGD$6.3trillion into R&D for eco-friendly products and energy saving technologies
Environmental cooperation with suppliers and partners to reduce environmental impact
So how did Samsung's Corporate Culture lead to its success?
Samsung’s Backbone
Manufacturing
90% of products made in Samsung’s own factories
Produce LCD screens and semiconductors for competitors
Strict quality control and micromanagement
R&D
Human Resource Department offers 64 courses to 53,400 employees
33 R&D centers around the world
$10.8 Billion dollars or 6% of its revenue (Apple only recently went up to $4.5billion dollars)
Samsung's Backbone
Global conglomerate
17% of South Korea’s GDP
370,000 employees in more than 80 countries
Over 80 companies involved with construction, electronics, financial services, shipbuilding, and medical services

Balance between Hierarchy & Collectivism
VS
Try Everything Mentality
Has a foot in almost every industry - Electronics, Life Insurance, Construction and Trading, Information Technology, Heavy Industries etc
Open System of Information
Always In Perpetual Crisis
Long Term
Engineer and Spec focus
Constantly updating and innovating
Constantly releasing new products
High priority on customer needs
Means Orientated vs Goal Orientated
Expatriation Practice
Always Prepared With Back Up
High Uncertainty Avoidance - Does not take unnecessary risks
Does not stick to 1 specialized industry like Apple
Samsung's Practice of 'People First'
Implemented the
Overseas Regional Specialist Program
(1991~)
Operates 13 education facilities (accommodate up to 4000 people a night)
Secures and develops core talent to create a better future
Developed the
Global Management Leaders Course
for managerial level and above
Embraces a wide range of perspectives and cultures, breaking away from
‘pure blood theory’

Samsung's Corporate Culture
Training System
International Recruiting Office (IROs)
Global Strategy Group (GSG)
Sending Insiders Out
One Year Abroad Program
Education System for each grade
Bringing Outsiders In
Overseas course
MBA course
CEO course
Strategic reasons to integrate
international employees

Decision

Bringing outsiders from abroad


Sending insiders out

Reason

- Professional development
- Knowledge transfer
- Transfer of scarce skills

- Control
- Professional development

Advantages of expatriation (specified for Samsung)
- Share cultural views
- Develop best practices
- Develop international leadership with a global mindset
- Improves business performance

Disadvantages of expatriation
- High cost for the company
- High risk of failure
- Difficulties for expatriates

STEP ONE: STRATEGIC PLANNING
- Samsung spends about $100,000 on trainings and also supporting the regional specialists (Harvard Business Review)

- Of the 208 non-Korean MBAs hired into Global Strategy Group since it was created, only about 135 are still working in the company

Samsung’s Case
STEP TWO: SELECTION
The most crucial criteria is having
professionalism
Models describing skills required internationally (Mendenhall 2002):
- Learning models
- Stress-coping models
- Development models
- Personality-based models

Samsung's International Criteria
Sending insiders out
Employing outsiders in
Professional Skills
Sociability
Education (MBA, Phd in Western Universities)
Work experience in international companies
Preparation includes:
- Training
- Job Shadowing
- Visiting
STEP THREE: PREPARATION
Framework of job integration:
- Providing job information
- Affective approach
- Immersion

This practice is highly valued by employees. However, only 50% of organizations practice the cross-cultural trainings.
Samsung's Training
Deep immersion approach

Outsiders inside
- Employee spent 2 years in GSG before they take their posts
- Requirement to learn language
- Requirement to understand culture

Insiders outside
- 12-week language course
- Spend a year abroad where their first major task is to make friends and explore the country

STEP FOUR: ADJUSTMENT
Two-way:
- Company adjusts to innovations employees bring
- Expatriates adjust to local environment and culture

Samsung’s Solution
- Encourage local CEOs to hire foreign employees
- Implementation of mentoring program
KRW 2.5 Trillion in 1987
KRW 27 Trillion in 1997

A Quote From the Chairman of Samsung
"The business world has changed significantly. It is becoming increasingly difficult to foresee what sectors will prosper or opportunities will arise in the future. But if you hire the best and brightest, you will solve whatever issues arise in the future."
- Lee Kun Hee
Full transcript