Will Samsung Remain
'Living Company'for 100 Years?

Celebrates its 70th anniversary

Samsung Group marked the 70th anniversary of its founding on March 22. Samsung, which began in 1938 as a small fruit trading company called Samsung Trading Co. in Daegu, has quickly been catapulted into a world-class conglomerate.
However, the celebration has been marred by an independent prosecutor's investigation into Samsung's alleged slush funds.
Now the focus is on whether or not Samsung, which has served as a prime mover of Korea's economic growth, will keep on growing by surmounting the current crisis.
DuPont, established in 1802 as a business in the explosives sector, is one of the most long-standing corporations in the world. The company has been extending its business horizons to such areas as petrochemicals, nylon products and the bio field.
DuPont Chairman and CEO Charles "Chad"O. Holliday once commented on the secret of its longevity saying that DuPont's DNA has a determination to translate innovative change into action. He apparently insisted that a challenging and dynamic organization has lead to its longevity by endlessly adapting to the environment.
Is Samsung's 100-year Legend Possible's What's the probability of Samsung's survival beyond 100 years like that of DuPont's Taking a look into corporations that have survived longer than Samsung, the answer is not easy. In reality, one-third of the top 500 corporations listed by Fortune magazine in 1970 closed or disappeared through M&As within 13 years. Not many American corporations have survived more than 100 years. The only company that was listed in 1900 and is still in existence is GE. The probability of survival into a second generation is reduced to one-third and the figure is destined to further decline to 13 percent for a third generation.
From this standpoint, Samsung's celebration of its 70th anniversary is significant. Samsung has made tremendous strides under the leadership of the late founder Lee Byung-chul and his son and current CEO Lee Kun-hee. However, Samsung has to endure the pain to translate crisis into success in the third generation.
William O'Oara said in his book "Wisdom"that corporations lasting more than 100 years share 11 common points, including adaptability to their environment, employee unity, the conception of creative ideas and a horizontal decision-making process and conservative financial management.
Based on these guidelines, Samsung has the potential to live for more than 100 years, but needs to innovate its constitution. Samsung has excelled in adapting to its environment by surviving the Asian financial crisis in 1997 and is on par with global corporations in terms of internal combination and the nation's lowest debt rate.
Prof. Arie de Geus, of MIT's Sloan School of Business, spoke about the conditions of the "living company,"almost matching those of Samsung, saying that the living company knows itself well, understands how it can adapt to the world, manages the future and saves capital.
However, in the past, Samsung had a very centralized decision-making process as the chairman's Secretariat and Restructuring Headquarters. It now has the Strategy Planning Office, an obstacle to be broken in the direction of remaining a living company for more than 100 years. It needs to shift its corporate paradigm to a more creative and dynamic culture, staying away from a uniforned one.
An electronics company CEO commented that Samsung's legend has reached its limit due to the current business structure, and what Samsung badly needs is creative imagination. He noted that by combining the creativity of Apple with the iPod's legend and Samsung's hardware production would prolong the longevity of Samsung for even 1,000 years, not just 100 years.
Now that Samsung Electronics has risen to the No. 2 spot among global IT companies, the attention is focused on which of Samsung's subsidiaries can surprise the world with new legends. nw

Rapid Growth of Samsung Group Marking 70th Anniversary