Article published in English

Article: Samsung: an original case of knowledge transfer in economic organizations

Rang-Ri PARK-BARJOT

Doctor in Modern Economic History at Paris-Sorbonne (Paris IV) University

Abstract

Samsung, also known as the “three star company”, was established in 1938 by Lee Byung-Chull. Samsung’s success was the result of two generations of family business. Under the impulse of Lee Byung-Chull and, later, his son, Lee Kun-He, the firm adapted both to changes in worldwide demand and the preferences of Korean society. It achieved a successful fusion of Asian neo-Confucian capitalism and the American model of the multidivisional and managerial firm. It invested in human capital to fill the technological gap between Korea and the USA and Western Europe and went on to assume leadership within the accelerated flow of innovation that characterizes the “digital era”.
From 1953 to 1986, despite the pressure of an unpredictable market and growing costs, Samsung grew rapidly, and improved its performance through more productive labor, significant investments to improve the global productivity and a strong desire to obtain new technologies. This strategy proved highly efficient and led to a steady increase of return on equity in the group. As founder, Lee Byung-Chull created an original system of management, with its origins in neo-Confucianism. The result was a strong enterprise culture, rapid development of the R&D department and of an efficient network of subcontractors.
After the death of Lee Byung-Chull, in 1987, the group was re-launched by Lee Kun-Hee. Despite the 1997-1998 financial crisis, Samsung Electronics became the leading firm of the group. The firm’s diversification toward new technology and exports coincided with substantial gains in productivity, a reinforcement of financial independence and an increase in self-financing. Samsung Electronics provided the group with the means to increase its global leadership.