Samsung Electronic Corporation: Governance of Chaebols

Samsung served as the manufacturing industry and international company analyzed. Samsung has been in business for over 70 years and manufactures products for diverse markets, including: digital media, high -tech electronics, home appliances, information technology and telecommunication. Samsung's motto is to "inspire the world and create the future" by leveraging three key strengths: new technology, innovative products and creative solutions.

The core problem at the heart of the fallen education empire is its weak corporate governance that finally leads to corporate failure. According to Contemporary Issues in Accounting, the corporate governance, as simply described, is “the system by which business corporations are directed and controlled”(Rankin.M., 2012). The poor corporate governance results in corporate failure, that is, “closure or cessation of business activity that results in a loss to its creditors”(Scapens, Ryan, & Fletcher, 1981).

The first section of this essay focuses on the possible causes of corporate failures including dominant CEO, poor strategy decision and the failure of internal control. Secondly, it discusses how the third edition of corporate governance principles and recommendations could be applied to prevent the causes of the failure. The 1st, 2nd, and 7th principles along with specific recommendations will be mentioned in this section. However, the context is concerned solely with the causes stemming from Dick Smith itself.

Lecturer Michael J. Roberts prepared this case as the basis for class discussion rather than to illustrate either effective or ineffective handling of an administrative situation. Copyright © 1998 by the President and Fellows of Harvard College. To order copies or request permission to reproduce materials, call 1-800-545-7685, write Harvard Business School Publishing, Boston, MA 02163, or go to http://www.hbsp.harvard.edu. No part of this publication may be reproduced, stored in a retrieval system, used in a spreadsheet, or transmitted in any form or by any means—electronic, mechanical, photocopying, recording, or otherwise—without the permission of Harvard Business School.

It comprises many affiliated businesses and is one of the South Korean biggest companies. Samsung was created by Lee Byung-Chul in 1938. The company expanded into areas like food processing, insurance, textiles, securities, and retail. Samsung is been in the electronics industry since 1960, which was when the company started to grow.

Samsung History is not like other electronic companies, SAMSUNG origins were not involving electronics but other products. In 1938 the SAMSUNGs founder Byung-Chull Lee set

Today Samsung has evolved into a group of companies unmatched by others in its range of industries and performance. It is now globally focused and responsive to the needs of each market, and more committed than ever to true innovation. The group’s three core business sectors are electronics, finance and trade and services.

Samsung is one of the largest global companies. It was founded in 1938 by Byung-Chull Lee in Taegu, Korea. Samsung got its beginning as a grass-roots company. This company started out as a food exporter and shipped items like dried fish and flour from Korea to China. In the 1950s, Samsung began to get into other businesses, such as insurance and textiles. By 1969, Samsung had started an electronics division that mostly made TVs with their first black and white TV

In 1938 the Samsung's founder Byung-Chull Lee set up a trade export company in Korea, selling fish, vegetables, and fruit to China. Within a decade Samusng had flour mills and confectionary machines and became a co-operation in 1951. Humble beginnings.

The evolution of the world has left nations with an ever changing business environment which keeps companies on their toes.With the technological advancements as well as changes in demographic, many companies have to rapidly change the way they react to these changes in order to stay relevant in a competitive environment (Jovanović, 2015). Samsung has adapted to today’s business through adopting Western business practices into its Japanese system as well as digital technology(Khanna, Song & Lee, 2011).The role of management in today’s industry has rapidly changed from the role of a manager imposing restrictions to an organisational tool, not only for a company but personally as well (McCrimmon, 2010).Management system used in Samsung during the S-level recruitment program proves the importance of managerial ranks as well as an organised system(Khanna et al, 2010).

On being operational in the global market, Samsung has been subjected to various kinds of pressure. Therefore, the focus of this report is show while formulating an international strategy how Samsung should take both environment factors into consideration that will shape their business approach. The analytical business tools namely PESTLE and Porter Five Forces will be used to understand the micro and macro environment drivers of Samsung’s strategy.

South Korea is only slightly larger than Indiana with a total area of 38,691 square miles but the 28th largest population in the world of 50,924,172 people (The World Factbook, 2017). Most of the population lives in urban areas caused by migration from the country during a 30-year economic expansion beginning in 1970. Seoul, the largest city with 10.3 million residents, is the country’s capital and main industrial hub. There are approximately six other major industrial centers spread throughout the country, helping to disperse the urban concentration.

History: Company started its business as a Samsung Electronics Industry Co Ltd in 1969 and introduced some electronic products such as Black-and-white TVs, washing machine and refrigerator from 1960 to 1975. The worldwide establishment and expansion of the business and operations of the company started in 90 as entered in the Asia, Europe and American region

Economic history: Wrecked in spirit, and wounded economically by the Japanese occupation, World War II, and the Korean War of the 1950s, South Korea literally rose from the ashes. Subsisting initially on aid from the U.S, the South Korean government substantially encouraged manufacturing, leading to phenomenal export-driven growth.

Samsung was founded by Mr. Lee Byung Chul in 1938 as a trading company. Maximum revenue of the Samsung is through their electronics subsidiary where they entered in mid-1970.