Enhancing Trustworthiness through Strategic Alignment

The provided content is an excerpt from a publication by Teece (2010) titled 'Business models, business strategy and innovation.' It does not provide a direct summary of the publication. However, based on the references listed, it appears that the publication may discuss the relationship between business models, strategies, and innovations, as well as organizational structures and cultures that support sustainability and environmental management.

ESSAY

TABLE OF CONTENTS
INTRODUCTION...........................................................................................................................1
ORGANISATIONAL ENVIORNMENT.......................................................................................1
ORGANISATIONAL STRUCTURE.............................................................................................2
ORGANISATIONAL CULTURE..................................................................................................4
IMPACT OF TECHNOLOGY........................................................................................................6
CONCLUSION................................................................................................................................6
REFERENCES................................................................................................................................8

INTRODUCTION
Samsung is a multinational conglomerate company headquartered in Suwon, South Korea.
The term Samsung denotes 'three stars' in Korea. It was founded by Lee Kun Hee in 1938 as a
trading company. The organization deals and handles numerous subsidiaries and businesses
which contribute a major part in the country's economy. It offers wide range of products starting
from apparels, accessories and medical equipment to the electronics components,
telecommunication equipment, semiconductor and ships. Samsung also provides services related
to financial services, hospitality services, retailing services as well as medical and health care
services. These commodities and services are produced and consumed at the international level.
Though, it has great influence on South Korea's economy, politics, media and culture. Its vision
is to provide customer satisfactory services by implementing sustainable methods of
manufacturing products. It unifies products, people and business approaches which access
highest standard of living. The company’s head has presented a blueprint for its global success
with the declaration of “New Management” policy (Samsung Newsroom. 2016). This policy lies
focus on rational capital, technological advancement, organizational creativity and employee
empowerment as its key features. Today, with the growing international competitiveness, it is
using strategy of multifaceted integration facilities and developing global information systems.
Samsung emerging business trend highlights devotion of its people and technology to create
superior level of products and services contributing to the global society (Peng, Wang and Jiang,
2008).
ORGANISATIONAL ENVIORNMENT
Illustration 1: PORTER's Five Force Analysis of Samsung
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Company has dynamic organizational structure which creates a healthy and friendly
environment to work in. Its macro or external environment is regulated and emitted by
customers, suppliers, competitors, regulatory agencies and the society. It can be better
understood by the PORTER's five force analysis where five individual forces put its impact over
the performance and productivity of company. At first, business entity faces major threat of the
arrival of new firms and entrants like Micromax, Gionnee in mobile and smart phone market of
the company. This brings much more options for the consumers to purchase and consume same
products of different companies. .the other external force which effects the performance and
productivity of the company is wide range of substitute products in the market (Melville, 2010).
For this, group often adopts price differentiation policy to attract consumers and influence them
to purchase cheaper substitutes. Samsung customers have great bargaining power as they can
easily switch to other branded and prosperous commodities with no extra cost. Price sensitivity
and good knowledge of other substitute products by the consumer create situation of buyers
bargaining in the company. Apart from the customer’s bargaining power, Samsung faces
bargaining power of suppliers also. The suppliers accept credit worthiness and a constant
demand of raw materials from Samsung group (Kalakota and Robinson, 2001).
ORGANISATIONAL STRUCTURE
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Illustration 2: Organizational Structure of Samsung
(Source: Chun, 2015)
Organizational structure of a business entity determines hierarchical arrangement of lines
of authority, power, responsibilities, duties and roles of organizational members at different
levels of management. Various elements such as work specialization, chain of command,
departmentalization, span of control and formalization establish structure of the corporation.
Samsung has its own organizational structure for efficient working of its vast empire of
commodities and services. It adopts divisional organizational structure where business operations
are based on division of work and tasks depending upon its functional activity. Company frames
various departments on the basis of function, project, product, geographic territory and
combination approach. Samsung group is operated by Chairman and assisted by its Vice
Chairman (Kennerley and Neely, 2003). The Board of directors forms corporate social
responsibility committee to plan and discuss the organizational goals and objectives. Company is
classified into three main departments depending upon their functionality such as Component
department, Consumer electronics department and IT/ Mobile department. These are three major
departments through which different products and services are rendered by the corporation. Each
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and every department or division is sub divided into the necessary categories. Like for an
example: the consumer electronics department has sub-divisions such as visual display division,
home gadget division, medical gadget division and printing solution division. Team members
are directed by department heads and every team member is aware about his/her duties.
Adoption of divisional organizational structure is suitable for Samsung as it is suitable for its
working mechanism. Through this structure, the departmental heads are able to improve their
skills and experiences. Also, they are able to focus on other aspects of the products including
finance, sales and promotions. As every division is independent in itself, so here decision making
process is quite effective and time saving (Daily and Huang, 2001). Samsung easily launches
new products and expands its territory without disturbing existing department due to divisional
organizational structure. However, conflict between divisional heads, duplication of functions
and sense of attitude are few threats faced by the company. In this manner, working structure of
Samsung is ruled out by divisional or departmental organizational structure (Weske, 2012).
ORGANISATIONAL CULTURE
Now, report is discussing about the work culture or organizational culture which is used
by the management of Samsung. The concept of organizational culture can be defined as a
system governed by the assumptions, beliefs and values. Culture portraits unique personality of
an organization. Organizational culture maintains a specific environment which provides
guidelines and boundaries for the behavior of members working in the organization. There are
different types of organizational culturewhich are- power culture, role culture, task culture and
person culture (Kothandaraman and Wilson, 2001). Each type of culture has a strong implication
on the organization.
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Illustration 3: Role culture in Samsung
(Source; Delmas and Toffel, 2004)
Samsung formulates role culture as its unique organizational personality. Here, every
employee is delegated his roles and responsibilities according to his specialization, interest,
educational qualification and experience. Members of the organization are accountable for some
tasks and duties according to the work assigned to them. Company works with defined structure
and operations which are predictable. Employees of Samsung know their job properly and report
to their departmental heads who have similar skills of the field. Further, business activities are
performed on the basis of rules and guidelines framed by the Board of Directors of business
entity (Dinsmore, and Cooke-Davies, 2005). The power is determined by the person or group of
persons of higher position. The hierarchical structure followed by company is tall chain of
command rather than flat chain of command. Decision making process often stands painful for
the workforce as it is bureaucratic in nature. From the mentioned data, the key features of
Samsung can be understood clearly. There is hierarchical bureaucracy as company deals with a
wide range of products and services. Power and decisions are laid down by person in position
causing little scope of expert power. The power is centralized in the hands of higher executives
and directors of Samsung (Lee, 2006). Thus, it can be examined that company follows role
culture as its working culture.
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IMPACT OF TECHNOLOGY
The core components or commodities produced by Samsung deal in consumer
electronics, electronic components, medical equipment, IT, shipbuilding and many more.
Science and technology are the base for the production and manufacturing of all these
commodities. Samsung is a global leader in technology providing new opportunities and
methods to its employees. It has provided home to innovation and discoveries in the world of
consumer electronics items (Wiklund and Shepherd, 2003). Every year, it brings new technology
in the world of smart phones, home appliances, printers, cameras, personal computers, LED
solutions and semiconductor. Recently, company has developed a number of products that focus
on energy efficiency through latest technology and trend (Vorhies and Morgan, 2003). For
instance: LED lighting and eco heating pumps based on smart inverter technology. These LED
lamps replace traditional lightning system and save up to 80% of electricity. Eco heating system
heats up the buildings four times more efficiently than other forms of heating sources. Through
this economic and ecological friendly system, not only electricity cost is reduced but it emit low
level of carbon dioxide in the atmosphere. Such efforts by the company not only related to
maximize its profits but also perform corporate social responsibility (Sirmon and Hitt, 2003).
Samsung can be considered as a role model of innovations and discoveries in today's hi-tech
world.
CONCLUSION
Samsung is one of the eminent groups providing its services since 1940s in all across the
world. It has networks in 61 countries and around billions of employees working in it. Here,
there is a brief description of company's profile with its organizational environment, structure
and culture. The corporation has a dynamic internal and external environment providing
foundation to its working. Positive impact is held by various external forces of the environment.
Analysis of the macro factors of company is focused on keeping in mind the Porter's five force
theory. This theory helps to understand the current scenario of company and frame policies
accordingly. Later, organizational structure of the company is briefed which highlights the
adoption of divisional organizational structure in the company. The study also reveals the impact
of role culture on the working of company. Here, executives and department heads have clear
delegated line of authority within a highly defined structure (Kourdi, 2009). Through this type of
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structure and culture, company is establishing a better place to work with. It also reflects the
technological changes and advancement welcomed by the group in its wide range of products
and services. Hence, it can be concluded from the above report that organization is growing at a
great space by following technological developments. It has many opportunities and benchmarks
to achieve and built more trustful position in the market (Teece, 2010).
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REFERENCES
Books and Journals
Daily, B. F. and Huang, S. C., 2001. Achieving sustainability through attention to human
resource factors in environmental management. International Journal of Operations &
Production Management. 21(12). pp.1539-1552.
Delmas, M. and Toffel, M. W., 2004. Stakeholders and environmental management practices: an
institutional framework. Business strategy and the Environment. 13(4). pp.209-222.
Dinsmore, P. C. and Cooke-Davies, T. J., 2005. Right projects done right: from business strategy
to successful project Implementation. John Wiley & Sons.
Kalakota, R. and Robinson, M., 2001. E-business 2.0: Roadmap for Success. Addison-Wesley
Professional.
Kennerley, M. and Neely, A., 2003. Measuring performance in a changing business
environment. International Journal of Operations & Production Management. 23(2).
pp.213-229.
Kothandaraman, P. and Wilson, D. T., 2001. The future of competition: value-creating
networks. Industrial marketing management. 30(4). pp.379-389.
Kourdi, J., 2009. Business strategy: A guide to taking your business forward (Vol. 12). John
Wiley & Sons.
Lee, J. N., 2006. Outsourcing alignment with business strategy and firm performance.
Communications of the Association for Information Systems. 17(1). pp.49.
Melville, N. P., 2010. Information systems innovation for environmental sustainability. MIS
quarterly. 34(1). pp.1-21.
Peng, M. W., Wang, D. Y. and Jiang, Y., 2008. An institution-based view of international
business strategy: A focus on emerging economies. Journal of International Business
Studies. 39(5). pp.920-936.
Sirmon, D. G. and Hitt, M. A., 2003. Managing resources: Linking unique resources,
management, and wealth creation in family firms. Entrepreneurship theory and
practice. 27(4). pp.339-358.
Teece, D. J., 2010. Business models, business strategy and innovation. Long range planning.
43(2). pp.172-194.
Vorhies, D. W. and Morgan, N. A., 2003. A configuration theory assessment of marketing
organization fit with business strategy and its relationship with marketing performance.
Journal of marketing. 67(1). pp.100-115.
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Weske, M., 2012. Business process management: concepts, languages, architectures. Springer
Science & Business Media.
Wiklund, J. and Shepherd, D., 2003. Aspiring for, and Achieving Growth: The Moderating Role
of Resources and Opportunities. Journal of management studies. 40(8). pp.1919-1941.
Online
Chun, J., 2015. How Samsung Electronics’ Organizational Structure and Culture Affect Its
Innovation. [PDF]. Available through: <https://ibpunion.files.wordpress.com/2012/02/ot-
exam2.pdf>. [Accessed on 3rd February 2016].
Samsung Newsroom. 2016. [Online]. Available through: <
https://news.samsung.com/global/facts-understanding-the-current-state-of-samsung-
electronics>. [Accessed on 3rd February 2016].
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