First Personnel Matter of Samsung Group under Lee Jae Yong’s System···Big Changes Are Expected

Financial industries are becoming restless as major groups are about to have periodic personnel change at the end of this year.

As reorganization of business structures of major groups such as Samsung, Hanhwa, and Lotte is taking place, it can be assumed that sizes of personnel change of presidents and executives and reorganization of businesses are going to be significant. It can also be predicted that each group’s strategy to respond to global low-growth will emerge during this process.

Significant amount of changes can be felt not only on Samsung Group, which is doing its first personnel change under Vice-President’s Lee Jae Yong’s system, but also on SK Group that has Chairman Choi Tae Won back and LG Group that has its main affiliate LG Electronics suffering from slump in performance.

Samsung Group, which is planning to carry out periodic personnel change in early next month, is especially receiving more attention this year. This is practically first personnel change under Vice-President Lee Jae Yong’s system and it is interlinked with process of reorganization of business structure.

Rumor about major reduction of executives from its major affiliate Samsung Electronics and positions of CEOs from Samsung Group’s affiliates that are performing poorly are also things to look for. Starting with personnel change of presidents in early next month, Samsung Group is carrying out personnel change of executives and reorganization of certain affiliates’ businesses in order.

Last year’s Samsung Group’s range of personnel change was its lowest ever. Only 3 presidents and 353 executives were promoted, and industries believe that a fact that Chairman Lee Kun Hee of Samsung Electronics collapsed suddenly had to do with such small change.

This year is going to be different however as Vice-Chairman Lee Jae Yong himself is leading in all managements and is showing fast responses in reorganizing group’s management structure and getting rid of minor businesses.

It is known that Vice-Chairman Lee is putting importance on reducing empty formalities and focusing on major businesses. Within Samsung, some are speculating that Vice Chairman Lee Jae Yong’s style of reorganization of business structure will take place one after another.

Financial industries are speculating that Samsung will decrease overall number of executives and combine businesses that perform similar tasks. Young talent, skillful and future-type talent more than loyal people, and global feel are being chosen as major selection points. Because there was not much change last year, some are speculating that extensive changes are being expected as carryover effect is applied.Within personnel change of its major affiliate Samsung Electronics, biggest variables are positions of President Yun Bu Geun, Lee Sang Hoon, and Shin Jong Kyun who are facing terminations of internal directors’ terms.

They were the ones that contributed the most towards Samsung Electronics making excellent results for many years as President Yun, President Lee, and President Shin were in charge of consumer electronics (CE), CFO (Chief Financial Officer), and IT and mobile (IM) respectively.

Due to their contributions, some are predicting that possibility of personnel change due to poor performance is not high. However fact that Samsung Electronics’ major industries’ growth is slowing down recently can be seen as a variable. At the end, some are predicting that if there is a change in positions of presidents, it will be done to renovate atmosphere of Samsung Group.

Traditionally changes in personnel of Samsung are firmly based on a principle of ‘reward system’. That is why it can be estimated that there will be many promotions from Device Solution (DS) Department as they have performed well this year.

“There is no way to tell where personnel change of presidents is heading.” said a high-ranking official from Samsung Electronics. “Rumors about significant personnel change of executives are being brought up continuously and I agree to them as well.”

Rumors surrounding Samsung Electronics are keep on implying that 20 to 30% of 1,200 executives will be cut. As Samsung Electronics was making excellent results lately, it added 300 more executives in a span of 3 years. However some are predicting that number of executives will go back to same number as in the past due to global low-growth, poor performance in IM Department and others. It can be deduced that if number of executives decreases, there will not be many promotions this year either.

Its Future Strategy Office’s change is also another thing to watch for. Changes in Future Strategy Office’s supporting task are expected as affiliates merge together as part of reorganization of management structure and as Samsung Group reorganizes business structure by selling its chemical businesses and others. Vice-President Lee’s foundation, which emphasizes on-site management, is also another reason why changes in Future Strategy Office are expected.

However as it is in the midst of succession and reorganization of business, there are more people who believe that there will not be too big of changes in Future Strategy Office since Samsung still needs Future Strategy Office.

Staff Reporter Kwon, Kunho | [email protected]