Samsung Single Spirit Case Analysis

December 17, 2012

While analyzing the Samsung organizational culture it is important to remember that the founding values and governing principles of the company were deeply rooted in the national character of its home country. Specifically, it was mentioned throughout the case that the South Korean culture was  based on principles of Confucianism with its great emphasis on family values and high regard for intellectuals. Another two crucial components of that culture were highly hierarchical society and high power distance.

While these national traits were important in forming and influencing the Samsung corporate culture, it is important to note that recent studies gave strong indication that South Koreans appeared to be ready to part from the traditional ways and embrace a more egalitarian society. Therefore the company should take these trends into account and move along with these new societal developments by introducing and implementing more flexible and relevant policies and practices in their management of human resources with emphasis on accommodating the expectations of the new generation of “digital natives’’ who will be ensuring the companies continued success in the future.

Samsung traditions worth keeping:

  • Focus on employees, expressing appreciation, sharing the vision, seeking input
  • NEO as the way of helping new employees to adjust to the Samsung culture
  • Continued fostering of  employees beyond NEO
  • Appreciation for learning, knowledge sharing, technological innovation, openness to new ideas
  • Good citizenship, co-prosperity

Samsung has not been a stranger to implementing policies and practices that might be seen as disruptive innovation in their management of human talent. Examples of such innovation include departure from a tradition of recruiting employees through referrals and connections, and using instead competitive hiring; it had zero tolerance for nepotism and cronyism; implementation of individual incentives and reward system to replace the group-based reward system. These examples give very strong assurance that the company is sufficiently open to identifying and implementing innovative practices even when they go against the grain of stringent and rigid traditions held in the society.

The challenges identified by SHRDC in 2010:

  • Increasing hiring of more experienced employees
  • Increasing hiring of foreign (non-Korean) employees.
  • Generational change in South Korea
  • Expectation of younger employees for Samsung to become more open and communicative, have better work-life balance

The NEO in itself is just an instrument on instilling Samsung values, and this practice of new employees orientation is implemented, even if at various degree, in many successful organizations worldwide. Therefore the question is not whether to keep the NEO. The question is how Samsung can adapt to the realities of new generation by adjusting some of its policies and practices and how NEO can be effectively used in conveying those new practices.

Another key factor in understanding problems faced by Samsung in dealing with the new generation of “digital natives” is to understand not only broad national traits mentioned before, but specifically the work ethics prevalent in Korean businesses. The case mentions that South Korea has the longest working week hours among all OECD countries. But this information appears dry until you realize specific reasons  why those hours are so long. Some of the examples are:

Our recommendation in hiring an outside consulting company suggest to locate either a South Korean consulting with significant exposure to the Western business environment or the Western consulting company who does a lot of business in South Korea. In either case the company should have thorough understanding of the local traditional cultural environment, the expectations of the new generation of employees, and those of the Western employees.

Specific assignment for the consulting company would be to survey various groups of current employees and target hires. Proposed segmentation for the surveyed groups is as follows:

  • Current older employees
  • Current younger employees
  • Group representing prospective younger employees
  • Group representing prospective foreign non-Korean employees
  • Group representing prospective foreign Korean employees
  • Current senior management
  • Current middle management
  • Current knowledge workers
  • Current operators
  • Employees from various functional departments, such as R&D, production, corporate level
  • Employees from various geographical locations, e.g. South Korea, USA, Western Europe and elsewhere where the Samsung company is present

The specific questions for these surveys should be around the workers’ expectations about fostering creativity and innovation, working conditions, company internal communications, reward systems, work-life balance.

The specific responses from each of the surveyed groups should be tabulated and given different weights. Given the issues of attracting, successfully integrating and retaining younger generation of employees and foreign talent, their response should be given more weight.

While the organizational changes based on the analysis of the received responses are implemented it is very critical to maintain constant and open communication of the renewed vision at all levels of the organizational hierarchy, from the executive suites all the way to the production line operators. The importance of this kind of communication is hard to overestimate. It also ties in organically with the legacy of the company’s founder Byung-Chull Lee who used to spend most of his time on developing talent by speaking to employees at different hierarchical levels and functional departments and receiving their feedback.