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The best of both Worlds – Samsung Innovations

August 11, 2011

In 1938, Lee Byung-chull (1910–1987) of a large landowning family in the Uiryeong county came to the nearby Daegu city and founded Samsung Sanghoe , a small trading company with forty employees located in Su-dong (now Ingyo-dong). It dealt in groceries produced in and around the city and produced noodles itself.

Little did he know that he had laid the foundations of world’s leading technology company of the twenty first century. Samsung has grown ever since that day to be a 220 billion dollar organization today.

As I was reading through Prof. Khanna’s article at HBR, I realized how Samsung have helped South Korea as a country in more than one ways.   The way Samsung has defined globalization, not just in terms of exports or presence in almost all economies, has been quite amazing.

The article talks of one of the best examples of organizational innovations I have known, 

Just to lay a background, the time at which Samsung started Korea was a Japanese colony and the hence the Japanese culture was somehow embedded deep into the culture of Samsung.Various attributes where Samsung has been able to take the best of both worlds and create one of the most valued organizations globally are as below:

A diversification strategy  with deep focus  into each of its businesses.
Ability to tap into both internal and external  capital markets.
Focus on continuous  improvement and  applied R&D but  also on innovation, marketing, and  design to establish brand and premium pricing
Long-term cooperative supplier relationships but with some level of competition
Interweaving of  internal workforce with outsiders attracted through market-based compensation
Annual recruitment for entry-level positions; open recruitment for experienced  specialist
Coexistence of seniority-based and merit-based promotion and compensation; mostly standardized but some individualized incentive

Japanese Culture
Western Culture

Bringing the best of both worlds together Samsung has been able to create a culture of innovation and excellence without fear. This amazing mixture has now brought immense benefits to South Korea, not only financial but its perception as a nation.

It is now India’s turn to see a Samsung emerging from one of Indian towns and lead India through innovation and excellence.

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