Samsung needs continued support to maintain success

Isao Yanagimachi, a professor of policy management at Keio University in Japan

Lee Kun-hee, the late former chairman of South Korea’s Samsung Group, inherited the Samsung empire from his father, founder Lee Byung-chul, but created a new Samsung through entrepreneurship, choice, and focus, according to Isao Yanagimachi, a professor of policy management at Keio University in Japan and a world-renowned scholar in the study of Korean corporate history.

“It is unfortunate that Jay Y. Lee, the current chairman of Samsung Electronics Co., who inherited this legacy, seems to be hindered by various social circumstances in the rapidly changing corporate environment.”

A graduate of Keio University’s faculty of commerce, Yanagimachi earned his master’s and doctoral degrees at the institution and has spent his life intensively studying Korean companies, particularly Samsung, and published academic papers in the field. He shared his insights during a recent meeting at Keio University Shonan Fujisawa Campus in Kanagawa Prefecture.

Yanagimachi began by discussing Lee Kun-hee’s ‘new management’ declaration. “Lee began constructing the conglomerate’s second foundation and practically dismantled the vast Samsung empire that he inherited from his father via business separation,” Yanagimachi said. “This was possible because he had the mindset of a founder and made clear choices with a focused approach.”

After taking the helms at Samsung Group in 1987, Lee Kun-hee reorganized the group around electronics and finance. He promoted qualitative management with his ‘new management declaration’ in 1993, which is widely viewed to have led Samsung Group to where it is today.

“Without this consciousness of being a founder, it would have been difficult for him to make investment decisions that were ahead of the times and involved great risks,” Yanagimachi said. “The world’s leading semiconductor company was built on this foundation.”

When asked about Lee Kun-hee’s son and current Chairman Jay Y. Lee, Yanagimachi expressed regret. “Samsung’s legal risks are constraining Jay Y. Lee too much,” he said, expressing his frustration. “Samsung is a company representing Korea in the global war for semiconductor supremacy, and every minute is precious.”

The executive chairman of Samsung Electronics Co. committed to creating a ‘new Samsung’ by improving management systems, strengthening social contributions, and making bold investments to widen the technology gap.

An example is the introduction of the ‘senior outside director system’ to increase transparency in governance and strengthen board-centered responsible management. This system allows for the election of a senior external director who represents external directors when the CEO or an internal director chairs the board, ensuring proper balance and checks.

Samsung’s plan to invest 300 trillion won ($224.41 billion) by 2042 to build the world’s largest advanced system semiconductor cluster spanning 7.1 million square meters in Yongin, Gyeonggi Province, Korea, is also seen as a bold decision that will make Samsung’s ‘semiconductor superiority’ a reality. Jay Y. Lee even discussed the development of fully autonomous driving semiconductors with Tesla Inc. CEO Elon Musk Elon Musk in May 2023, highlighting his efforts to tap new pioneer markets. His continuous emphasis on social responsibility under the banner of ‘future companionship’ is also notable.

“No matter how capable a person is, there are certain areas that only an owner can do that a professional manager cannot,” Yanagimachi said. “The third and fourth generation of businesspeople who watch their fathers run their companies from a young age, then inherit and interact with their fathers’ connections, naturally gather advanced information that no one else has access to and thus only the owner can make big decisions that determine the fate of the company.” He emphasized that to leverage the advantages of owner management, it is necessary to recruit excellent talent and organize an owner support team.

Regarding the possibility of industrial exchanges between Korea and Japan, Yanagimachi said, “I think there will be a great deal of synergy in areas that can complement each other, such as manufacturing in Korea and materials, parts, and equipment in Japan.”