Samsung Electronics to celebrate 30th anniversary of New Management Initiative

Samsung Electronics headquarters in Seoul [Photo by Park Hyung-ki]

Samsung Electronics Co. will commemorate the 30th anniversary of its transformative “New Management Initiative” on Wednesday, a milestone that marks a significant turning point for the South Korean tech giant, which has propelled it to become a global powerhouse with a remarkable revenue growth from 8.15 trillion won ($6.2 billion) to over 300 trillion won.

The late Chairman Lee Kun-hee, father of current Chairman Jay Y. Lee, gathered hundreds of Samsung Electronics executives at the Kempinski Hotel near Frankfurt, Germany, in 1993, to emphasize the need for comprehensive changes and innovation in the face of globalization.

Chairman Lee declared, “Change everything except your wife and children,” which encapsulates his commitment to transformation.

Widely known as the “Frankfurt Declaration,” the initiative remains a cornerstone of Samsung Electronics’ business philosophy, revolutionizing the company’s status from a second-tier player to a global electronics giant.

Even today, Chairman Lee’s visionary approach continues to shape the company’s practices and strategies.

Following the initiative declaration, Samsung Electronics underwent a significant shift in its focus from quantity to quality. The company’s revenue soared to 20.08 trillion won in 1998 from 8.15 trillion won in 1993.

Samsung Electronics saw remarkable growth, reaching 43.58 trillion won in 2003, 121.29 trillion won in 2008, and 228.69 trillion won in 2013, approximately doubling its revenue every five years.

Despite facing a volatile business landscape last year, Samsung Electronics recorded a revenue of 302.23 trillion won, firmly establishing itself in the era of 300 trillion won in sales.

Samsung Electronics also experienced substantial internal expansion during the period.

[Photo by Lee Chung-woo]

The number of domestic employees increased by about 2.6 times to 121,404 in 2022 from 47,607 in 1993.

Research and development expenses and capital expenditures also witnessed significant growth, expanding by 7.1 times and 7.9 times, respectively, since the compilation of relevant data began in 2003.

Samsung Electronics maintained its position as the fifth most valuable global brand for the third consecutive year in 2022.

In commemoration of the 30th anniversary of the New Management Initiative, Samsung Electronics and its affiliates have opted for a low-key and modest approach rather than organizing a grand event.

Samsung Electronics, however, currently faces several uncertainties stemming from global economic downturns and supply chain reorganization.

The company’s operating profit plummeted by 96 percent to 640.2 billion won in the first quarter of this year from the same period a year ago.

Its semiconductor business, a vital component of Samsung Electronics’ operations, also confronts sensitive circumstances due to escalating tensions between the U.S. and China.

Despite the challenges, the legacy left by the late Chairman Lee has paved the way for a new era of “social restoration” among conglomerate families in Korea.

The Lee family has made significant contributions to the nation by donating over 23,000 cultural assets and artworks to national institutions.

They also allocated 1 trillion won to combat infectious diseases and support pediatric cancer and rare diseases, with the expectation of tangible outcomes in the medical field.