Samsung Cultural Issues
Intercultural Issues in Business and Management
Ghaliya Lulu
H00230251
The impact of cultural difference and organizational structure
Executive Summary
Samsung being one of the most successful companies now has an interesting past through which it grew out of. The culture differences and the impact on the company shows how important a country’s norms and values are. This case study is focused upon how Samsung overcame its issues and managed a cross-cultural company to become a market leader in electronics.
Introduction
As a business grows, it may develop group of diversified employees. In the business world today, it is very important for an organization or a company to highly prioritize its cultural values and differences especially
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Back in 1947, Cho Hong Jai, the founder of Hyosung group invested in a company called Samsung Mulsan Gongsa with Byung Chull Lee, founder of Samsung; the same company which is now called Samsung C & T Corporation. Couple of years later, Cho and Lee parted their ways due to differences in management style. Over the years the employees started to feel devalued and not appreciated for their creativity. The company followed an internal ranking system of seven, the seniority based performance system- Sawon ( Level 1, 2 and 3), Daeri, Chajang and Bujang. Sawon is a title given to a fresh graduate and it takes more than twenty years to get to vice president position in the company. This hierarchal system makes the executives feel inferior and underpaid when compared to people with same age at other organizations. It is crucial for a business to have effective communication to explain how each country is selling their products and services. Keeping in mind, Samsung operates in various countries like Turkey, India, Germany, US and so on. As James Humes, a speechwriter for five Presidents, once said, "The art of communication is the language of leadership” (Forbes.com, 2012). Any relationship between two individuals can solve problems if they simply have a conversation in a language that the both understand. The same theory is applied in an organization as well; any problem internally or externally can simply be solved if the right communication is made. For that, the employees need to have the freedom of talking to their superiors. According to a research conducted by Choi and Chang (2009) it is observed that organizational culture directly affects the motivation and attitude of the employees towards innovation. The Geert Hofstede cultural dimension says that South Korea has a score of 60% in Power Distance. Power Distance is defined as the extent to which
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