Organizational Development and Change at Samsung
Organizational
development is an exceptionally huge and pivotal process. It includes every
part of business activities. Change is a significant factor in developing,
exceptionally aggressive business environments. Speculations of progress depict
the viability with which organizations can adjust their methodologies,
procedures, and structures. Organizational development principally includes
making the arrangement and reconciliation between different organizational
exercises and enhancing the present procedure of achieving the goal on the
standard premise.
Without
change and change management, the dangers of missing opportunities, losing
profitability, or complete business failure all increase and undermine a
business' future.
This report discusses the importance of
organizational development and the importance and benefit of appropriate
models. Different elements identified with organizational development have
additionally taken into consideration. This report discusses an organizational
change that took place in the Samsung Company and the theories and models that
relate to the change. It also mentions some elements and models in order to get
a better outcome from the change management process.
In the previous eighteen
months, Samsung, an organization that makes everything from dishwashers to cell
phones, has turned out to be one of the most ground-breaking and unmistakable
names in tech.
Samsung
In the previous eighteen
months, Samsung, an organization that makes everything from dishwashers to cell
phones, has turned out to be one of the most ground-breaking and unmistakable
names in tech.
Samsung
is a multi-national South Korean company founded in 1938 by Lee Byung Chull (History,
n.d.) .
It started as a local business dealing dried fish, fruits and vegetables and
such and was originally meant to be a trading company. Samsung started creating
electronic items, TVs and cell phones in the late 60s. After the death of the
company founder, Lee Kun-Hee took over the chairmanship in 1987. (Steve , 2013) .
Samsung
is currently delivering world famous TVs, Mobile telephones, and Video Cameras.
Watching out for the present market patterns, Samsung is currently fabricating
high quality PDAs and gadgets to contend its greatest market rival Apple.
Organizational Structure at Samsung
The
company’s Structure is divided into three major divisions. They are IT and
mobile communications, consumer electronics, and device solutions. The method
of reasoning behind the decision of divisional organizational structure relates
with Samsung's vast product range and contrasts among the products and services
the organization offers to the market (Dudovskiy, 2017) .
Each
of Samsung’s division is managed separately in accordance with the features of
their product, marketing and selling, and other business aspects.
The
device solution division is headed by Kinam Kim, who joined the Company in 1981
and is an IEEE individual and famous specialist in semiconductors, having
filled in as the manager of Samsung Advanced Institute of Technology; CEO of
Samsung Display; leader of the Memory, System LSI Businesses and as of recently
was in charge of the general semiconductor business. Hyunsuk Kim Heads the
consumer electronics division who is a renowned expert in display products,
having assumed a noteworthy job in the Company accomplishing the best position
in worldwide TV deals for the eleventh successive year with various display
innovation breakthroughs and the IT and mobile communications division is
headed by Dongjin Koh who has as of late delivered strong outcomes in the
portable business, having supervised the development of its Galaxy smartphones with differentiated
products and services, in view of his huge experience as the past head of
mobile R&D (Samsung news room, 2017) .
Aside from three divisions, Samsung
Organizational structure additionally coordinates corporate Management office
and Samsung Advanced Institute of Technology (SAIT). Corporate management
office works with general administration of the company and furthermore has
managerial obligations. SAIT is Samsung Group's R&D center point, set up as
the incubator for the improvement of new products and services.Organizational Development of Samsung
Samsung
Group represents over 20% of South Korea's exports and is the pioneer in
numerous domestic businesses, for example, the financial, chemical, retail and
media outlets (Ullah , 2017) . Samsung's history goes
back to 1938 when Samsung General Stores opened in North Kyung-sang Province,
Korea. The company focused its trade business until the 1950s, when it turned
into a maker of basic products, for example, sugar and fleece (Grant, 2001) . In 1958, Samsung
wound up engaged with the insurance business by fusing a local fire and marine
insurance agency.
The
1970s were a pivotal period in molding present-day Samsung. Its qualities in
the semiconductor, data and telecommunications businesses developed from the
huge speculations made amid this period (Mathews, 1995) .
Samsung
stepped toward heavy businesses by venturing into aircraft manufacturing,
shipbuilding and constructions, and also synthetic industries. By the 1980s,
Samsung extended its endeavors into exploring the bigger markets abroad. The
Samsung group started adding to foreign economies by building facilities in the
US, the UK and Portugal. Samsung also put extensive assets into cultivating
Korea's rich legacy by supporting an extensive variety of social and artistic
exercises. "The last decade of the twentieth century saw the advancement
of Samsung’s new way of management.
Change
is important because without change, organizations would almost certainly lose
their competitive edge and fail to address the needs of what most hope to be a
developing base of loyal customers. Dave Ulrich gives us a perspective of where
strategic commitment of human resource management to value creation is going.
He expresses that in conditions like, for example, technological change,
customer diversity, new competition, and globalization, HR is required to
contribute directly to competitive achievement and to create value for the firm (Galavan,
Murray, & Markides, 2008) .
Changes in the management of Samsung
In
1987, founder and executive, Byung-Chull Lee died and Kun-Hee Lee assumed
control as chairman (Samsung chairman Lee Kun-Hee wins
inheritance case, 2013) . This was the start of a few changes
inside Samsung. Lee’s wise vision and the introduction of the "New
Management" in 1993 recognized the need to change management philosophy
with the end goal to stay aware of the quickly changing global market and
economy.
"New Management" execution started
by urging workers to initially make improvements within themselves, endeavoring
to think about others and to behave morally. The "new management"
incorporates intellectual capital, organizational creativity, employee
empowerment and technological advancement. The company had grown quite a bit
between 1993 and 1998 making the executives think that things were working. Lee
however, wanted to go global.
Lee
changed the basic strategy and procedures that the Organization has previously
utilized hence initiating a transformational change. This type of change cannot
be handled within the existing standard or organizational routine. Where an
organization has drifted strategically to such a degree, to the point that it
is never again competitive, it is compelled to actualize a transformational
change ( Helen & Hunt, 2005) . Back in 1993, the
brand recognition and product quality of Samsung was almost at the bottom in
global market. Before Lee became the chairman of Samsung, the Samsung Group was
overseen as an exceptionally centralized firm, with the basic leadership
control being with Lee Byung-Chul and Samsung Secretariat, concentrating on
quantity driven management.
Initially, the Samsung Group was micro-managed
by executive Lee Byung Chul, the first founder of the firm, and was
subsequently to a great extent a centrally planned company where a considerable
number of the decisions were made at the very top. Be that as it may, Samsung,
under Lee Kun-Hee, had advanced to an association where the decision making
power was passed on to the individual executives of each partner under the
Samsung Group. The leadership changed from an autocratic, centralized, and
family managed leadership to a more democratic and decentralized leadership. In
a democratic leadership the leader involves team members in the decision making
process. He consults them and gives instructions on what to do and does not
keep a close eye on them (Robert & Christopher , 2009) .
Lee
Kun Hee emphasized to the executives, “Change everything but your wife and
children” (waiting in the wings: samsung,
2014) .
He believed that the employees needed to change in an essential way, down to
the core. Extreme measure were taken to bring this behavioral change. (Kotter, 1988)
Change Management
Roles of Managers and leaders in Organizational changes
In a
firm, Leader and manager assume a critical role in overcoming resistance to
change by actualizing right strategies in the company yet not change their
identity and behavior (Kotter, 1988) . Manger ought to
impart the confidence to those members by motivating and giving satisfactory
information and training. This pushes them towards development and they feel
comfortable with change.
Lee Kun Hee exemplifies the characteristics of
strategic, democratic and charismatic leadership. Samsung was known for its
high numbers and low quality and he took it to high numbers and high quality.
It first takes a cognizance of the industry and the powers following up on the
organization. With that understanding it is then conceivable to look advance
into new markets and product offerings as sound designs are set down. The more
a leader comprehends about their business, the more they can influence change
for the better.
Kotter's 8 Step change management Model
The
first step of this model is establishing a sense of urgency. Inspecting
the market and identifying potential crisis or major opportunities. In the late
1990s, at the point when the organization was a struggling producer of consumer
electronics. Samsung’s chairman, Lee Kun-Hee, perceived there was no future for
cost drove, volume producing in South Korea as the nation's cost base expanded
and rivalry increased from China. The brand recognition was next to none. He demanded
the association and support of the industry executives, key partners and
clients on the issue of change. In 1993, Lee Kun Hee encouraged his executives
to go on a tour around the world to see how Samsung was doing because of which
it became apparent that things were worse than expected. The significance
basically showed to help other people to comprehend the requirement for change
with the end goal to that they will be persuaded towards quick action. As a
leader, one needs to accept accountability for distinguishing potential risks,
create proper solutions, and gives a dynamic and convincing motivations to
inspire others to pursue.
The
second stage is to build guiding teams. This deals with building a team
with enough capacity to lead and organize change, and to urge all members to
fill in as a team. In this case, the manager should take up as group building,
and to keep on making a feeling of urgency around the requirement for change.
Lee Kun Hee, with proper use of incentives and capitalism, he confided in the
executives to settle on the decisions independent from anyone else. He
distinguished the weak areas in the groups and guaranteed that the group
includes numerous compelling individuals from different cross functional
divisions and working in various levels in the organization.
The
third step is to develop core values and a vision for change and
determining a strategy for realizing the change. “Change everything except your
wife and children”. These were the bold words of Lee Kun Hee to his team of
executives in 1993. His vision for the organization was apparent by his
continuous emphasis on quality over quantity. The manager has a duty to have a
straight and clear vision and thinking to encourage the employees and different
members comprehend the work they do. In the meantime, to make a methodology to
actualize this vision, which will fill in as a sort of profound sustenance all
through the change procedure.
The
fourth step is to clearly communicate the vision to be realized. Upon
reviewing the work conditions and how the production was going, Lee called the
Samsung secretariat and continued to emphasize on his vision. He had asked the
secretariat to record the call and dispense it to the rest of the group. The
objectives were clarified to devote technology and employees to create super
products and services to contribute better in the global society. In June of
1993, While Lee Kun Hee was in Germany at the Fleckenstein Grand Kaminski Hotel
in Frankfurt, he brought in Samsung's many executives for a major gathering. He
gave three day discourse spreading out his vision for the eventual fate of Samsung
and what the organization needed to do to wind up successful.
The
fifth step is to empower employees and executives to act on the vision.
Managers should start in passing changes. Additionally, ensure the hierarchical
structure, sets of expectations, and execution and remuneration frameworks to
guarantee these components is reliable with the corporate vision. On the
philosophy that “a company is its people”, Samsung attracted, developed, and
enhanced high quality people from around the world. All employees attended a
one month orientation program to be educated and understand the core value of
the company, its strategic direction and vision. Samsung also provided career
development programs for the worthy employees. Samsung implemented “priority of
human resources” which led it to become a national company representing Korea.
The
sixth step is to create short term wins. The taste of winning can
inspire and motivate employees. Samsung’s R&D projects and employee
evaluation were shot term oriented. Employees were provided with incentives
accordingly. These motivated employees to starve for more.
The
seventh step is to building on the change. Regular surveys were
undertaken to search for chances to gain from and expand on past victories.
The
final step is to make it stick. Teams should be ready to keep improving
the organization. Samsung stuck with its “new management” and has become an
exceptionally successful company Samsung Group's goal is to get supportable
development. In the procedure of change, the job of the leader is steady
advancement and transformation. Communicators, rules, correspondence, chiefs,
pioneers and obstruction manager and directors keep up a reasonable vision and
key arranging has laid a fruitful change management. Since Lee’s appointment as
chairman in 1987, the company’s total sales has increased 702 times and net
income 25 times.
Recommendations
John
Kotter's eight stage model vigorously impacts current reasoning on
organizational change. However, more often than not, the change management
requires models to be customized accordingly with the organization and its
change. The problem with John Kotter’s eight stage model is that all steps must
be followed. Ignoring or skipping a step is not possible if it were to work.
Unforeseen events might unfold in the process of change and when it comes to
Kotter’s model, it is difficult to change the direction of the change process.
It focuses on buying-in of employees and sometime the possibility of wrong
assumption is high.
Leadership
In
order for the change to be more effective and fruitful, the company needs
leaders who can work as a unified team. Leadership style is indispensable in
change procedure of organizational change. Transactional leaders are engaged
with remunerations and disciplines with workers to empower the execution of firm (Bass, 1985) . Through this type
of leadership the stakeholders for change process. The
partners/stakeholders(staff groups, managers, and top level executives) utilize
three techniques for motivation in change process, playing it straight, going
around the formal system and utilizing interpersonal organizations (Virginia
& Larry , 1988) . The "playing it straight"
clarifies the need of changes by giving information and how these progressions
can make advantage the specific partners. The second part "interpersonal
organization" frames unions and alliances with key chiefs, great people,
groups, and with casual and formal contacts for getting the information. The
third part "circumventing the formal framework" is presumably
slightest utilized strategy including dodging formal systems and structures.
The Kurt Lewin's Model
This
model is widely accepted in implementing change. The execution of change
includes the present condition of organization to be changed into a desired
state, yet this will not happen rapidly however simultaneously.
Unfreezing
Before
a change can be actualized, it must experience the underlying step of
unfreezing. Since numerous individuals will normally oppose change, the
objective aimed out of the unfreezing stage is to make a familiarity with how
existing conditions, or current level of acceptability, is upsetting the
organization somehow.
Changing
This changing step, additionally alluded to as
'transitioning' or 'moving,' is set apart by the actualization of the change.
This is the point at which the change becomes real. It's additionally,
therefore, the time that the vast majority struggle with the new reality. It is
a period set apart with vulnerability and fear, making it the hardest step to
overcome. Amid the changing step individuals start to take in the new
practices, procedures and mindsets. During this process, employees should be
reminded why this change is occurring and how fruitful it is going to be.
Refreezing
Many refer to it as the
name to symbolize the demonstration of strengthening, settling and hardening
the new state after the change. The changes made to organization's procedures,
objectives, structure, contributions or individuals are acknowledged and
refrozen as the new standard or the present state of affairs. Lewin observed
the refreezing advance to be particularly essential to guarantee that
individuals don't return to their old mindsets or doing before the usage of the
change.
Samsung
Company had to introduce changes to its business process. The change procedure
has been effective and wonderful outcomes have been accomplished, however there
is as yet far to go. This report has provided strong points that suggest the
type of leadership strongly affects the change management process of a company.
Samsung’s chairman Lee Kun Hee has proved to be a successful leader and has
successfully implemented change using what could be said Kotter’s 8 step change
model. With the company’s change in the 1990s it has become one of the most
successful companies in the world. This report has discussed the possibilities
of using other change models and elements for a more fruitful change process.
