(News Focus) Samsung admits lack of leadership for long-term growth

SEOUL, April 22 (Yonhap) -- A year ago, Samsung Group faced what local newspapers
billed its worst-ever crisis: Chairman Lee Kun-hee abruptly stepped down after
being indicted on tax evasion charges following a parliament-ordered corruption
probe.
Since then, Samsung has conducted a series of management reshuffles by
dismantling its strategic planning office, which had strongly influenced group
operations, and reorganizing its flagship Samsung Electronics Co. into two major
business groups.
The changes were part of Samsung's response to the ongoing global economic slump
and its efforts to reinvigorate the conglomerate engulfed by the corruption
scandal surrounding the Lee family.
Critics, however, say the changes have not resulted in any significant adjustment
in how Samsung is run and speculate that the charismatic former chief may still
be controlling operations from behind the scenes.
Their suspicions are stoked by the fact that while Lee Soo-bin, chairman of
Samsung Life Insurance Co., represents the group externally, the post of group
chairman remains vacant.
A group official admitted on Wednesday as Samsung entered its second year since
its former chairman stepped down that the conglomerate lacks leadership for
long-term growth.
"Looking back over the past year, we are beset with troubles both at home and
abroad," said the official on condition of anonymity, referring to the management
shake-up following the former chairman's resignation and the global financial
crisis.
"Under the current system, our task now is how to make business decisions for
five years or 10 years later," the Samsung official said.
While Samsung Electronics is faring better under the global downturn than rivals
like Sony Corp. of Japan, the South Korea-based electronics giant reported its
first-ever quarterly loss in the final quarter of last year.
For all of 2008, Samsung Electronics saw its net profit drop 25.6 percent to 5.5
trillion won (US$4.1 billion), while sales rose 15.5 percent to 73 trillion won.
Samsung Electronics is the world's largest maker of computer memory chips and
liquid crystal displays as well as the world's second-largest maker of mobile
phones.
"I think Samsung is doing well in navigating through the current economic
crisis," the official said. But, he added, "Samsung's experiment on management
reshuffles is still underway, and questions linger over the decision-making
process."
Samsung Electronics is scheduled to release its earnings for the first-quarter of
2009 on Friday.
(END)