Samsung Electronics Co, the world’s largest maker of mobile phones, memory chips and television sets, plans to revamp its authoritarian, top-down corporate culture to become more like a lean start-up as it copes with sluggish demand and growing competition.
The company said that its executives and workers pledged to reduce hierarchical practices, unnecessary meetings and excessive working hours during a “Start-up Samsung” ceremony held yesterday at its headquarters in Suwon, South Korea.
The first step in this new culture of flexibility requires all its executives to sign a statement promising to scrap the company’s traditional authoritarian ways.
Samsung is searching for new business strategies as a father-to-son leadership transition looms.
Lee Jae-yong, 48, is expected to succeed his ailing father, Lee Kun-hee, at a time when Samsung’s mainstay semiconductor and mobile phone businesses face intensifying competition from Chinese rivals.
Samsung has its eye on expanding into healthcare and pharmaceuticals, but has responded slowly to hot Silicon Valley trends, such as autonomous driving and artificial intelligence.
The company said it would announce in June how it plans to reorganize its workers and eliminate red tape. It said new vacation systems would allow employees to spend more time with their families and take breaks for self-improvement.
“By starting to reform the corporate culture, it means we will execute quickly, seek an open communication culture and continue to innovate as a start-up company,” Samsung said in a statement.
Samsung said it has been trying to reform its very Korean corporate culture to suit its identity as a global company, and to answer criticisms that it stifles creativity and grassroots input from workers.
However, analysts said Samsung faces a huge challenge in leveling a seniority-based corporate that is decades old. Some suggested the campaign also might be aimed at identifying under-performing workers and trimming the company’s managerial ranks to cut costs.
Samsung’s regimented, authoritarian ways might have helped it quickly catch up with Sony and other Japanese manufacturers, but it has also hindered recruitment of top talent.
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