Samsung - A Human Resource

Samsung - a Human Resource Study

Samsung, or the Samsung Group, is a Seoul-based chaebol (family controlled conglomerate). It has overtaken Hyundai as the largest business group in Korea. It is also Korea's largest exporter. Samsung was founded in 1938, and the Mission statement of Samsung comprises three slogans "Economic contribution to the nation; Priority to Human Resources; Pursuit of Rationalism." The management philosophy at Samsung is to contribute to the betterment of global society by providing superior products and services, by devoting HR and technology.

Samsung has many subsidiaries in the following sectors:

Electronics (Samsung Electronics, Samsung Mobile)

Machinery and Heavy Industry (Samsung Heavy Industries, Samsung Engineering)

Chemical Industry (Samsung Total, Samsung Petrochemical)

Financial Services (Samsung Card, Samsung Securities)

Retail services (Samsung Corporation, Samsung Plaza)

Engineering and Construction (Samsung Constructions)

Entertainment (Everland, Samsung Khan)

These are only some of Samsung's subsidiaries. Although Samsung's subsidiaries are spread over a wide range of industries, and their operation is independent, yet the corporate philosophy, code of conduct and the corporate identity are mutual. Some of the famous products of Samsung are its televisions, mobile phones, monitors, DRAM chips, disk drives, etc. Samsung was ranked No.1 in the memory chip market in 2002-03, while it was ranked third in the world cell phone market during that same time. Samsung was ranked 34th in the Interbrand's list of top 100 brands, which shows that Samsung is not only a profitable and ubiquitous company, it is also one of the world's most popular. (All information comes from Samsung official site)

Decision making in Samsung is as follows. The chairman of the group determines the overall strategic direction and long-term decisions are made by him. The CEO's of all the affiliates have the right to make ordinary business decisions and can make autonomous decisions. Samsung is currently employing more than 173,000 employees all over the world. Samsung is whole-heartedly embracing globalization, as is evident by its presence in 67 countries and its 285 overseas operations. At present, Samsung is pursuing a two-pronged approach: firstly to expand its presence further in the global market, and secondly, to provide enough training, expertise and resources to its operations worldwide, so as to make them self-reliant and prosperous. This strategy of globalization brings Samsung tremendous opportunities and challenges at the same time. Expanding successfully into new avenues implies learning about new cultures and customs, and at the same time, collaborating with new distributors and suppliers to come up with a winning combination makes Samsung a learning organization. At the same time, Samsung is committed to its resolve of contributing to the local economies of all its operating countries, by acting as a responsible "corporate citizen."1

Innovation has always been a cornerstone of Samsung. Research and Development has figured highly in its list of priorities. Today its commitment to innovation is as strong as ever. Taking the example of Samsung Electronics, which has 13,000 researchers, and its Research and Development investment of $1.7 billion shows that it is a serious innovator.

ORGANIZATIONAL CHART for SAMSUNG AMERICA

The above organizational chart highlights the structural divisions of Samsung's North American operations. Mr. KD Kim is the President and CEO of Samsung America Inc. He also is responsible for the East Business Division, under which come the Consumer and Trading divisions. The Consumer division encompasses General Chemical, Healthcare Products and the Exports to Korea. The trading division covers the Energy, Metal, Steel and Petro-chemical sectors. Mr. Jai Heon Lee, who is the Vice President, is responsible for the West Business Division, which include Machinery and the Latin American operations. Business development and the development of semi-conductors come under the Machinery division, while the Latin American operations include the working of the Samsung branches in Mexico, Sao Paolo, Panama and Santiago. Mr. SooKee Lee, who is also the Senior Executive Vice President, is responsible for the Textile and Fashion Division. The Fashion division consists of Apparel and Raw materials, while the Textile Sector deals with fabric and Activewear. 2

EMPLOYEE BENEFITS at SAMSUNG COMPARED to COMPETITORS

SAMSUNG

SONY

SIEMENS

Employees get a chance to evolve and grow their expertise by joining one of numerous HR development centers

In many cases, employees are free to choose their own work methods and approaches 4

Being a highly innovative firm with 62000 patents, creative employees are well rewarded

Employees are encouraged to participate in environment and culture friendly activities, to make a difference to their surroundings

Sony's ESPP program makes it easy for its employees to become shareholders

Siemens employees get to buy stocks if certain targets are met 5

Age is not a barrier to success, as many young, and talented individuals are selected for specific career-development programs 3

Sony Employees get attractive retirement packages.

Siemens is especially attractive for software engineer, with more than 49,000 employees working on software projects 6

EMPLOYEE BENEFITS at SAMSUNG

At Samsung, the process of on-the-job training is not just limited to the workplace, but in fact it has been taken to a new level through the Samsung Human Resources Development Center (SHRDC). It is considered to be the focal point of the learning and education system of Samsung. These learning centers are present in Korea, and now in China as well. These centers are not only value-sharing, but also knowledge creating. It offers courses for new recruits as well as mid-level employees. Courses range from leadership to globalization. The centers record 22,000 new enrolments every year, whereas the enrolment for the online education program runs as high as 230,000. 7

The centers for HR development are certainly doing a commendable job, and are helping Samsung train its executives for the future. But one existing problem with these centers happens to be that most of them are located in Korea, giving the Korean employees a more-than-fair chance of exploiting them for their own benefit. Thus, it would boost Samsung's credentials as a truly global company if it established more centers in other parts of the world where it operates. It is understood that although this process has been initiated, as is shown by the establishment of three centers in China, but the pace needs to be picked up.

As for the comparison of salary ranges for different positions at Samsung is concerned, such a comparison might not be an accurate reflection of the existing scenario, as the compensation package for even the same positions vary significantly, based on the differences in skills and abilities of the different employees at the same designation. 8

RECRUITMENT and HUMAN RESOURCE DEVELOPMENT at SAMSUNG

Samsung's founding Chairman Lee propagated the philosophy of "A Company is its People," thus laying the foundation for a company that would be committed to its people. A key aspect of Samsung's success in today's technologically fast-paced corporate environment is its efficiency in attracting and nurturing the most talented people in the industry. By focusing on global awareness, creativity, and communication and presentation skills, Samsung not only improves its operational efficiency, but also increases the chance of improving the work environment and motivation levels.

Newly recruited employees are enrolled in a training program of one-month duration. Samsung's basic HR strategy is to focus on attracting the most talented workers, regardless of their nationalities. Thus, masters in all spheres of management make their way into Samsung; namely Finance, HR, marketing, Research and Development, and Information Technology. At the same time, Samsung is enhancing the competitiveness of its domestic workforce by engaging them in language training, and global acclimatization programs. Also, some individuals who are identified as having exceptional talent or expertise in a particular area are given early career-development and training. Thus Samsung is able to keep its employees "battle-ready," and enables them to develop their skills on the latest technologies.

Samsung's training programs are basically geared towards developing the leadership potential in its employees. Samsung wants its employees to be leaders who act as agents of change. There are also program specific courses that focus on, for example, marketing and finance. These courses are developed both in-house, and in collaboration with local and foreign universities. The Local Expert program is designed to make the employees more aware of the global corporate scenario, to facilitate the transition from Local to Global. For all these training programs to work effectively and to contribute significantly towards providing value to the organizations, it is mandatory that the HR department, training department and the rest of the organization work in close concert with each other, and to effectively exchange information. 9

In short, the recruiting procedure for Samsung is as follows. The candidates submit their resumes, which are screened and matched to the job openings present at the time by the Human Resource Department. The resumes and application forms are then forwarded to the relevant departments. In case the match is successful, an interview will be conducted, either in Korea or the country where the candidate is residing. Once a job offer is made to the successful candidates, they are given a period of one month to decide.

Samsung's compensation packages are highly competitive, and are designed in a unique way, so as to take into account the individual abilities and skills of its employees. Also, the economy of the country in question also determines the amount of compensation that the employees get.

Samsung even ensures that its employees contribute to the environment around them by encouraging them to participate in Employee Volunteer Programs. This enables them to participate in lots of social improvement projects, from disaster relief to environment cleanup. In fact, Washington-based POLF gave Samsung the "Award for Excellence in Corporate Community Service."

The level of intellectual capital available with Samsung today can be envisaged from the fact that today Samsung has more than 2000 PhD's within its ranks. To continually meet the challenges in today's marketplace, Samsung always is on the lookout for employees who are not only able to work well in teams, but are also capable of growing individually. Thus, it is not surprising that in Korea, Samsung has emerged as the most sought-after employer. 10

The above figure outlines the vision for Samsung's training programs, which, in the long run, inculcate change and innovation in the organization. The three goals of the program are to cultivate next-generation leaders, to share core values of Samsung, and to develop Global Competency. 11

The structure at Samsung is described as 'Structured Nodes', with teams linked through networks. This is a flexible structure where knowledge flows across the organizational boundaries, and where it is much easier to form and disband multidisciplinary teams. 12

The training programs at Samsung do not just employ conventional methods of learning, but in fact, managers and other employees are trained using creative and motivating methods. Two such examples would serve to elucidate the point. In Texas, 90 Samsung managers were asked to carry out the following activity. They were organized into small teams, and were tasked with building equipment, using 'Lego' blocks. Although the tools were simple, but in order to be successful, the managers were required to be creative and to work efficiently in teams. The exercise enabled the managers to identify different skills within their teams, i.e. motivation, support and critical thinking, and they carried this knowledge back to the workplace. Another example demonstrates the importance of applying creative learning tools. At the same Samsung plant, a tool simulating a manufacturing line was assembled. The participants were asked to create a product with the tool under time constraints, while maintaining high quality standards. This exercise helped the participants better understand the concepts of yield and cycle time. These examples demonstrate Samsung's commitment to the development of its HR. 13