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Samsung's 'constant crisis' culture throws up questions

business Updated: Sep 05, 2012 02:22 IST
Miyoung Kim

In his 1997 book, Samsung Chairman Lee Kun-hee wrote that a successful company needs a "heightened sense of crisis", so that it always looks ahead even when it's doing well, and needs to be able to respond to change.

This credo has driven Samsung Electronics to become the world's biggest technology firm by revenue - it sells more televisions, smartphones and memory chips than anyone else - and makes the group a must-visit case study for a stream of Chinese firms seeking to tap the secrets of Korean success.

But, after last month's damaging US patent ruling, which Samsung said it will appeal - the Korean group was fined over $1 billion after a jury found it copied key features of Apple Inc's iPhone - the group's top-down command structure and decision-making is accused of stifling creativity.

What's been good for getting things done quickly, such as making bold decisions on big investments in chips and display screens, may not now best suit a company that needs to shift from being a 'fast follower' to an innovator.

Within Samsung, where some designers feel overlooked and undermined, there are calls for a change of tack.

The 'constant crisis' has worked well, helping Samsung overtake Japanese technology brands Sony, Sharp and Panasonic in chips, TVs and displays, end Nokia's decade-long supremacy in handsets and overtake Apple in smartphones.

But that has come with a big reputational hit - that Samsung makes knock-off products.