Lee Kun Hee – Sensational reformer
Lee Kun Hee had to wait to
become the head of the Samsung Group. As the youngest
of three sons, taking over from his father the
reins of what is now the largest chaebol in South
Korea would have alienated his older siblings.
As a result, Lee, who holds a degree from Japan’s Waseda University and an MBA from George Washington University, spent eight years as the vice chairman of Samsung Group. He was appointed chairman in 1987 when his father passed away.
What he inherited was a huge conglomerate whose reach included electronics, machinery, chemicals and financial services industries.
To date, the Samsung Group comprises 29 core companies or roughly 159 units. Its 1999 revenue of US$93.5 billion equals 15% of the country’s GDP. The group exported US$44.7 billion in the same year, accounting for as much as 31% of South Korea’s total export.
Its electronics division, Samsung Electronics (SEC), manufactures memory chips, computer systems, telecommunications equipment, picture tubes, glass bulbs, general electronics and precision machines. It posted net sales of US$ 22.8 billion in 1999 and reported a 1000% growth in net income.
Samsung has succeeded far more than most other chaebols in Korea. A large part of this is owed to Lee’s radical refashioning of his company beginning in 1993.
Following a cry for his employees “to change everything but your wife and children,” Lee declared Samsung a “second rate” organization by global standards, and criticized the Korean society for being too authoritarian and stringent. The group began to encourage subordinates to point out errors to their bosses, stressed the quality of products over quantity, promoted women to senior executive positions and rewarded managers on the merits of their individual performance.
The result is a modernized organization whose total share value today commands 46% of the South Korean stock exchange even though its total assets in listed companies represent only 20% of the top five Korean conglomerates.
If Lee is a successful business reformer, he is equally a man of controversy.
He was among 11 prominent South Korean businessmen convicted of conferring bribes on former South Korean president Roh Tae Woo in 1996. The courts sentenced him to a two-year prison term but suspended the punishment for 3 years.
Lee
declared Samsung a “second rate” organization
by global standards, and criticized the
Korean society for being too authoritarian
and stringent. |
He came under investigation again last year when it was discovered that over three million shares of Samsung Life have been transferred to his son at a paltry US$7.50 per share when the company’s advisers have valued the shares at US$583 each.
Large gestures and controversies, however, seem to be the indelible mark of Lee. Last year, in a move that drew both praise and criticism, the chairman of Samsung Group paid off the company’s debtors with US$2 billion of his own money. At the same time, as a member of the International Olympic Committee, he handed out the 100-meter gold medal to Marion Jones at the Sydney Olympics.
A man whose stature is very much larger than life, Lee is not one who will go unnoticed as he acts upon the world-stage at large. – Thomas Chen, ZDNet Asia