Introduction
The Samsung Electronics company fairly holds the rank of one of the leaders in the world market of electronics. Samsung has evolved from an insignificant company in the global marketplace in the early 1990s to a top-tier corporation in the second decade of the 21st century (Shin, 2017). This was due to the success of its paradoxical management style introduced by the New Management Initiative. At the same time, Samsung achieved several competitive advantages. As an example, Samsung Electronics, the memory chip division, significantly decreased its expenses compared to its rivals. At the same time, it has also managed to achieve differentiation, released fundamentally new chips of high quality, and provided a customized solution for each client. Recently, Samsung has expanded its share in this market, enhancing its advantage over competitors. Thus, it is essential to investigate Samsung’s strategy and leadership and the impact of Covid-19 on them.
Background Information
The Samsung Industrial Group’s history, one of the industrial giants of today’s global economy, started in 1938 in Korea. The real breakthrough in the company’s history occurred in 1969. In cooperation with the Japanese firm Sanyo, it opened a facility in South Korea specializing in the production of black and white Japanese televisions. In 1973 a full-scale production of a variety of consumer electronics was established in the city of Suwon. At the same time, the cooperative enterprise was entirely managed by Samsung Trading Co. and it became Samsung Electronics Corporation. (Shin, 2017). Samsung Electronics started its operations in the national electronics market almost from scratch, but it has occupied a prominent position for a couple of years. The company, adopting Sanyo techniques and then concentrating on manufacturing semiconductors, gradually grew to one of the major and best-known electronics companies in the globe.
Currently, it is challenging to identify an industry in which Samsung is not involved. The brand manufactures everything from microwave ovens and toasters to electronic cameras and sound stereos, and from automobiles to cruise ships and aircraft. In the South Korean internal sector, Samsung Group is focused on financial transactions, insurance, and protection services. As a result, it generates more than 50% of the country’s entire budget (Shin, 2017). Samsung has grown from a small export company in Taegu, Korea, to become a leading global systems integrator, technology developer, and manufacturer of digital devices, semiconductors, and memory modules. Today, Samsung’s innovative products and technologies are recognized worldwide.
The Organizational Climate and Leadership
The head of the Samsung Group Board of Directors is the company’s primary function, and the Group Strategic Planning Apparatus plays an essential role. The Group Strategic Planning Apparatus was referred to as the Secretariat until 2007 (Liu et al., 2022). It is a group-level headquarters organization that assists the head of the Samsung Group Board of Directors in supervising the activities of individual branches and subsidiaries. The office handles audits, planning, public relations, and human resources management. The group strategic planning office is used by the head of the board to manage all critical decisions. The organization has a line-and-staff organizational culture because there is a top executive, the head of the board of directors (Liu et al., 2022). There is a staff under the chief manager of the group’s strategic planning apparatus, which performs tactical and strategic planning activities within its service.
It is significant to analyze the model of the organizational culture of Samsung company. Analyzing Diehl and Kennedy’s corporate culture classification, one can conclude that the company has a model of organizational culture of “hard work” (Liu et al., 2022). It is developed in companies with low risks and fast reactions. The company’s employees maintained a high level of activity and performed a large amount of labor. Samsung’s management uses the motivation theory of A. Maslow’s approach, based on the satisfaction of employees’ needs as the principal incentive for effective performance (Liu et al., 2022). The satisfaction of needs occurs through establishing high wages for employees, which is at a level above the average Korean employee’s salary.
There are also bonuses, a means of providing employees with a huge package of social benefits. In 2015, Samsung Group announced the creation of a fund to compensate employees and their families affected by cancer (Liu et al., 2022). The fund will pay financial compensation to company employees who have cancer while working at the company’s plants. The foundation will finance research to ensure that the number of cases of cancer decreases, which satisfies the worker’s need for safety.
It is also appropriate to mention Samsung’s core business principles. In 2005, Samsung proclaimed five business principles that serve as the basis for Samsung’s global code of conduct concerning adherence to legal and ethical standards and the fulfillment of its social obligations (Liu et al., 2022). Thus, the company complies with legal requirements and adheres to ethical standards. Samsung respects basic human rights, does not discriminate on the basis of nationality, race, gender, religion or other characteristics, and treats all stakeholders as consumers or employees. As required by law, company information is transparent, both the principal aspects of company management and financial data (Liu et al., 2022). The companies consider political rights and individual choices and do not engage in political activities within the company.
An essential principle of Samsung’s management is that the leadership team maintains a clean organizational culture. Employees’ intellectual and confidential property remains within the company and does not leave the company without the owner’s permission. In this way, it assists the company’s leaders to create a healthy, non-conflict environment. At the same time, Samsung management respects consumers, shareholders, and employees (Liu et al., 2022). Samsung’s primary objective is customer satisfaction, and management focuses on shareholder value. The company is focused on continuously improving its employees’ “quality of life” (Liu et al., 2022). Simultaneously, the company management cares about the environment, safety, and health. The company focuses on the health and safety of people.
It is critical to note that Samsung leaders are diligently fulfilling their taxpayer responsibilities and working to create safe workplaces. Samsung exercises leadership based on mutual respect and cooperation. At the same time, the firm operates based on coexistence with competing businesses (Liu et al., 2022). Samsung’s business conduct is guided by a philosophy of using talent and technology to create superior products and services for the benefit of the global community. Therefore, Samsung emphasizes people and technology, creating a relationship between managers and workers that contributes to the company’s success.
Management of the Company
The division of labor at Samsung occurs in two separate ways. A stage-by-stage division of activities in the organization, from the input of resources to the output of products. This division of work is referred to as a horizontal hierarchy. The distribution of tasks by hierarchical levels in the organization and its individual parts is termed vertical specialization (Shin, 2017). The manageability scale is a value that determines the number of employees or activities united under single management. A narrow manageability scale is used in this organization, which is the minimum number of subordinates and the maximum amount of management levels. The relationship between hierarchy and scope of controllability in Samsung reflects the “Chinese configuration” (Liu et al., 2022). Samsung is characterized by decentralized management, the transferor delegation of rights and responsibility for a series of critical issues and decisions to the lower management hierarchy. This management system provides decision-making processes and initiative at lower levels, and Samsung adapts well to the new environment.
Samsung’s organizational structure is functional; it is based on the principle of specializing organizational substructures according to functional attributes. Each specialized functional substructure reports accordingly to the higher management person responsible for that line of business (Liu et al., 2022). The functional management structure is applied in the case of many specialized works in the organization. It includes a grouping of specialists and subdivisions performing separate management functions.
The Company’s Strategy
Samsung has a strategy and aims that it uses to be successful in the marketplace. Significantly, Samsung has also developed a vision for development by 2020, in which it pursues the following goals. Thus, by 2020, the company had a goal to create better products and services (Haizar et al., 2020). At the same time, they should develop products and services that provide the highest degree of customer satisfaction. Moreover, the company set quantitative targets: sales-400 billion dollars; the business is the No. 1 in the global IT industry. Samsung announced its new development strategy for 2022. It is named “TIGER,” an acronym where each letter represents one of the key development goals for 2022. Accordingly, in 2022, the company should become a significant player and increase the market share of flagship devices (Haizar et al., 2020). The primary objectives are to close the gap with Apple and expand its presence in many segments, such as wireless headphones.
The Samsung company is focused on the future and has unveiled its development strategy, which it has titled Galaxy for the Planet. This strategy involves the development of Samsung’s mobile devices division based on a global vision (Haizar et al., 2020). The people working at Samsung understand that environmental problems are now quite acute for humanity, and, considering all this, they have defined their strategic aims. It is important to note that Samsung’s strategic goals by 2025 are to minimize the company’s impact on the environment (Haizar et al., 2020). At the same time, the firm aims to reduce resource consumption at all stages, from production to recycling.
In addition, Samsung management plans to use only recycled plastic in all of its mobile devices. Samsung engineers are attempting to make the economy of the closed type; that is, all resources used in one mobile device will serve in the following new devices after recycling the old ones (Haizar et al., 2020). Along with this, Samsung is actively investing in the development of new innovative and environmentally friendly materials for its devices. For this purpose, engineers use a variety of recycled materials, of course only those durable, durable materials. Due to the experiments, the quality of the products that the company manufactures should not suffer.
It is significant to indicate that Samsung leaders have set a goal to eliminate plastic from the packaging of mobile devices. Already, it is gradually removing and replacing plastic with other environmentally friendly materials. Attention is also drawn to reducing the standby power consumption of all smartphone chargers to 0.005W. Currently, this figure is 0.02 W, which is already one of the lowest values. In addition, it is essential to reduce the amount of electronic garbage (Haizar et al., 2020). Total minimization of waste at all production stages and minimization of any waste. The task of the company is to stop producing waste and garbage completely.
Another development strategy is to optimize the life cycle of any device. Development and support of Trade-in and Galaxy Unicycling programs involve exchanging old appliances for new ones with a specific surcharge. As usual, the Samsung company amazes by its scale of thinking and its foresight. They attempt to make the life of all humanity on Earth and the planet as a whole more accessible. The company stresses that they are pleased to support anyways of cooperation in this area because it makes no sense for one company to think about the planet’s future when others also continue to contaminate it (Haizar et al., 2020). The company wants the planet to have a sustainable future. In its circle of influence, Samsung is trying to reform its production and business as a whole for a sustainable and stable future and ensure a decent ecological environment on the planet.
Decision Making During COVID-19
Significantly, Samsung adjusted quickly to market conditions during the COVID-19 pandemic. The company’s leadership created regional response teams worldwide to provide health protection guidance to the network’s employees. At the same time, employees and customers observed distance and temperature measurements at all company stores to stop the spread of the pandemic. It should be indicated that Samsung changed the vector of its road activities during the COVID-19 challenge (Hidiroglu, 2021). The company’s representative office provides free smartphones and laptops to COVID-19 patients who are quarantined to assist them in communicating with their families. Moreover, the firm offers free technology to hospitals and schools in order for them to provide education to students.
The global COVID-19 pandemic created a global crisis, which caused a disruption in product delivery chains. However, Samsung did not stop innovating and launching products and cooperating with suppliers. It is necessary to mention that Samsung provided loans to suppliers with whom they have been working for many years to maintain the field of innovation. The distribution of COVID-19 in the world stimulated the corporation to extend its development, especially in the medical area, which required help. Therefore, in 2020, Samsung launched an application containing critical information about UNDP’s response to COVID-19 (Hidiroglu, 2021). Accordingly, it enables physicians to receive real-time updates on patient health. At the same time, the application developed by the business provides additional information about the disease. It also invites the user to donate to the COVID 19 fund.
The coronavirus may be spread after simply touching objects; users of a smartphone should regularly clean the gadgets. Samsung is always searching for something new and has registered a new trademark, “Antimicrobial Coating” (Hidiroglu, 2021). It involves the development and use of antibacterial coatings. This coverage will be applied to the original cases for Samsung phones. The most interesting thing is that it is not just statements or commerce; the coverage has actually confirmed its effectiveness. The antimicrobial coating successfully fights bacteria and viral particles, providing its owner with complete security.
In this way, Samsung responds to the challenges of the pandemic and helps cope with them. The company does this through philanthropic activities and the development of new products. Accordingly, Samsung management has added the development of applications to fight the pandemic to its primary goals and strategies (Hidiroglu, 2021). Although Samsung’s overall strategy and objectives have not changed, they aim to preserve the planet’s ecology and gain a leading position in the industry.
Conclusion
Hence, Samsung Electronics is a successfully developing company that aims to become a leader in digital technology. Samsung’s goal is to create innovative technologies and efficient processes. These technologies should create new markets that make people’s lives and continue to ensure Samsung’s stable leadership in the industry. At the same time, the company focuses on the environment and has targeted its development strategy to manufacture technology that will not damage the environment. It is important to emphasize that since the pandemic occurred, Samsung’s decision-making process has not changed; the organization continues its environmental initiatives and strengthens its presence in the market. Samsung is characterized by decentralized management, devolving rights, and responsibility for a number of critical issues and decisions to the lower management hierarchy. However, all the significant problems are decided by the board of directors, which delegates authority to employees in accordance with the selected strategy.
References
Haizar, N. F. B. M., Kee, D. M. H., Chong, L. M., & Chong, J. H. (2020). The impact of innovation strategy on organizational success: A study of Samsung. Asia Pacific Journal of Management and Education, 3(2), 93-104. Web.
Hidiroglu, D. (2021). The Strategies in global semiconductor industry: The SWOT analysts of Samsung electronics Company. American Journal of Management, 21(2), 107-118.
Liu, W., Wei, W., Choi, T. M., & Yan, X. (2022). Impacts of leadership on corporate social responsibility management in multi-tier supply chains. European Journal of Operational Research, 299(2), 483-496.
Shin, J. S. (2017). Dynamic catch-up strategy, capability expansion and changing windows of opportunity in the memory industry. Research Policy, 46(2), 404-416.