Management Style Changes in Global Organizations: Samsung

This essay delves into the dynamic shifts in management styles adopted by global organizations, particularly focusing on Samsung's transition from its home market to the international arena. The essay examines the impact of these changes on organizational success, highlighting the adoption of a hybrid management system that integrates the best practices of Eastern and Western management styles. The discussion covers key management functions, the application of the Systems Approach, the connection between organizational purpose and structure, and the components of transformational leadership. The case of Samsung is used to illustrate how the company incorporated merit-based systems, embraced cultural diversity, and fostered employee development to navigate the complexities of the global market. The essay concludes that cultural diversity, flexible work structures, and open communication are instrumental to global success.

Running head: Marketing and Management
Change Management in Global Organizations
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1Marketing and Management
Thesis Statement- In this essay, the changes in the management style embraced by a global organization
when they shift bases from their home country to a global market and the impact of these changes on the
success of the organization is discussed with a special reference to Samsung.
Introduction
Several Contextual factors like globalization, markets driven by customers, technological process,
competitiveness in the marketplace and demands for work-life balance have compelled business
organizations to embrace changes in the nature of work(Madsen & Walker, 2015). Business
organizations have changed their rigid and hierarchical organizational structure and have adopted a flatter
and flexible structure (Booth, 2015). The business culture of Asian countries is very different from that
of Western nations. In this essay, it is discussed how an organization can adopt a hybrid management
system to implement the best practices of the Eastern and Western management styles and work culture
(Keller & Lewis, 2016). For instance, Samsung introduced the merit-based compensation system instead
of the seniority based compensation system which was an integral part of the work culture of the
organization.
Discussion
The functions of the management
According to Henri Fayol the functions of management are planning, organizing, leading and
controlling. According to Peter Drucker, the task of management is to fulfill the long-term vision and
mission of the organization while making the workplace productive and fulfilling social responsibilities.
Lee, the chairman of Samsung has incorporated the best practices from the Western business
organizations and entwined these practices with Japanese management system to ensure to launch a high-
quality, high -margin products in the marketplace while preserving its core competency of being a
traditional low-cost manufacturer. The organization focuses on continuous improvement as well as on
innovation. The organization had a homogenous workforce but was not skeptical about introduction of
outsiders in its workforce who were unfamiliar with the culture of the company. In sharp contrast with the
Confucian tradition, Samsung vested authority to some young people over elders and introduced the merit
pay and promotion system. Samsung was highly successful in its home market by introducing the
business system with tight integration but it had to incorporate the best management practices of the
Western business world to secure success in the emergent global market (SAMSUNG PARADOX, 2017).

2Marketing and Management
The systems approach
The Systems Approach has reconciled the human relations approaches and classical approaches.
The relationship that exists between behavior and structure, the total work organization and the range of
variables that prevail in an organization are considered in the Systems Approach. The organization is
considered as an open system in the Systems approach (Dent & Bozeman, 2014).
Samsung adopted the best practices of General Electric and Hewlett Packard and introduced the
merit-based compensation model in the beginning of 1997 which was incompatible with its pay structure
based on seniority. The entire rank and file of Samsung got the opportunity to participate in the process of
Six Sigma which was in alignment with the culture of continuous improvement for the organization. The
management of human resource is practically and theoretically significant (Aust, Brandl & Keegan,
2015). A socialized profit-sharing program was adopted by Samsung modeled after many western
companies like HP where all employees were eligible for a bonus on the basis of a percentage of their
salary. Samsung has sent its employees to Japan pursue degree of advanced engineering, to the United
States to pursue higher education in marketing and management and in Singapore, New York and Hong
Kong to be trained in higher degree of finance. These employees filled important positions and acted as
change agents for the organization by implementing their knowledge into practice. Thus, the Systems
approach was adopted by Samsung (SAMSUNG PARADOX, 2017).
Connection between organizational purpose and structure
The organizational purpose can be connected with the organizational structure, for instance,
advertising agency or promotional agency has a fluid and loose structure while multinational company in
branded goods have coordinated structure to manage major linkage and issues related to resources. For
example, the hierarchical organizational structure of modern organizations like Samsung is changed to a
hybrid organizational structure with best practices of the Western countries and the Eastern nations to
gain success in host countries (Nedelko & Potocan, 2013).
Components of transformational leadership
A transformational leader engages in the vision of the organization, fosters loyalty, trust and
justice. Idealized influence which is the leadership charisma admired by followers, motivation which is
the leadership behavior that inspires followers and makes work meaningful and challenging for them,
intellectual stimulation where leaders consult followers for novel and creative approaches of work and
individualized consideration where leaders focus on the developmental requirements and growth of
followers are components of transformational leadership.

3Marketing and Management
Managing cross-cultural diversity is a strategic initiative undertaken by global organizations (Li,
2016).Lee wanted to improve the S-level recruitment quality of Samsung and adopted transformational
leadership to enhance the receptiveness of the S-level recruits inside the company. In order to increase
familiarization with the Western talent, Lee sent Internal Recruiting officers (IROs) abroad. Newcomers
were encouraged to be familiar with their colleagues and culture of the company before taking up their
position in the organization. Samsung’s effort to recruit non-Korean MBAs and PhDs faced resistance
from language barrier and cultural, political and social tensions. Thus managing diversity becomes
essential for global organizations (Verma, 2015). In 1997 the group headquarters of Samsung was ordered
by Lee to incorporate a unit of management consulting called the Global Strategy Group (GSG). Its
members were foreign nationals who were top graduates in business and economics who worked for
companies like Goldman Sachs and Intel and it was compulsory for them to learn rudimentary Korean
before taking up their posts in Samsung. Transformational leadership can be linked with creativity of
employees (Jyoti & Dev, 2015). A language training course for duration of 12 week was organized by
Samsung for its young and talented employees after whom these employees got an opportunity to spend
one year abroad for global exposure. During the first six months, these employees made themselves
familiar with the language and culture of the country and engaged in networking by befriending people of
the foreign country and in next six months they could undertake a project of their choice (SAMSUNG
PARADOX, 2017).
Conclusion
It can be concluded that the management paradox is prevalent in the management style of modern
global organizations like Samsung. The business culture of Eastern countries prefer to adopt a
hierarchical organizational structure but to be globally successful, an organization must implement the
best management practices of the Eastern countries and the Western nations. Cultural diversity, flexible
work structure and open-communication model can be instrumental for the global success of an
organization.

4Marketing and Management
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