Samsung's crisis culture: a driver and a drawback

Sun Sep 2, 2012 6:05pm EDT
 
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By Miyoung Kim

SEOUL (Reuters) - In his 1997 book, Samsung Chairman Lee Kun-hee wrote that a successful company needs a "heightened sense of crisis", so that it always looks ahead even when it's doing well, and needs to be able to respond to change.

It's a credo that has driven Samsung Electronics to become the world's biggest technology firm by revenue - it sells more televisions, smartphones and memory chips than anyone else - and makes the group a must-visit case study for a stream of Chinese firms seeking to tap the secrets of Korean success.

But, in the wake of last month's damaging U.S. patent ruling, which Samsung has said it will appeal - the Korean group was fined more than $1 billion after a jury found it had copied key features of Apple Inc's iPhone - the group's top-down command structure and decision-making process are blamed for stifling creativity.

What's been good for getting things done quickly, such as making bold decisions on big investments in chips and display screens, may not now best suit a company that needs to shift from being a 'fast follower' - quick to match others' products - to an innovator.

Within Samsung, where some designers feel overlooked and undermined, there are calls for a change of tack.

The 'constant crisis' has worked well, helping Samsung overtake Japanese technology brands Sony, Sharp and Panasonic in chips, TVs and displays, end Nokia's decade-long supremacy in handsets and overtake Apple in smartphones.

But that has come with a big reputational hit - that Samsung makes knock-off products.

MOVING HEAVEN AND EARTH   Continued...

 
A worker fixes an entrance sign at the Samsung booth before the IFA consumer electronics fair in Berlin in this August 28, 2012 file photo. Samsung Electronics is the world's biggest technology firm by revenue, making the group a must-visit case study for a stream of Chinese firms seeking to tap the secrets of Korean success. But, in the wake of the damaging U.S. patent ruling in August, 2012, the Korean group was fined more than $1 billion after a jury found it had copied key features of Apple Inc's iPhone - the group's top-down command structure and decision-making process are blamed for stifling creativity. REUTERS/Tobias Schwarz/Files