Samsung

SOUTH KOREAN COMPANY

Samsung, South Korean company that is one of the world’s largest

producers of electronic devices. Samsung specializes in the production of a
wide variety of consumer and industry electronics, including appliances, digital
media devices, semiconductors, memory chips, and integrated systems. It has
become one of the most-recognizable names in technology and produces about
a fifth of South Korea’s total exports.
Samsung was founded as a grocery trading store on March 1, 1938,
by Lee Byung-Chull. He started his business in Taegu, Korea,
trading noodles and other goods produced in and around the city and exporting
them to China and its provinces. After the Korean War, Lee expanded his
business into textiles and opened the largest woolen mill in Korea. He focused
heavily on industrialization with the goal of helping his country redevelop itself
after the war. During that period his business benefited from the
new protectionist policies adopted by the Korean government, whose aim was
to help large domestic conglomerates (chaebol) by shielding them from
competition and providing them easy financing.
During the 1970s the company expanded its textile-manufacturing
processes to cover the full line of production—from raw materials all the way to
the end product—to better compete in the textile industry. New subsidiaries
such as Samsung Heavy Industries, Samsung Shipbuilding, and Samsung
Precision Company (Samsung Techwin) were established. Also, during the
same period, the company started to invest in the heavy, chemical,
and petrochemical industries, providing the company a promising growth path.
Samsung first entered the electronics industry in 1969 with several
electronics-focused divisions—their first products were black-and-
white televisions. During the 1970s the company began to export home
electronics products overseas. At that time Samsung was already a major
manufacturer in Korea, and it had acquired a 50 percent stake in Korea
Semiconductor.
The late 1970s and early ’80s witnessed the rapid expansion of
Samsung’s technology businesses. Separate semiconductor and electronics
branches were established, and in 1978 an aerospace division was created.
Samsung Data Systems (now Samsung SDS) was established in 1985 to serve
businesses’ growing need for systems development. That helped Samsung
quickly become a leader in information technology services. Samsung also
created two research and development institutes that broadened the
company’s technology line into electronics, semiconductors, high-polymer
chemicals, genetic engineering tools, telecommunications, aerospace, and
nanotechnology.
In the 1990s Samsung continued its expansion into the global electronics
markets. Despite its success those years also brought about corporate
scandals that afflicted the company, including multiple bribery cases and
patent-infringement suits. Nevertheless, the company continued to make
advancements on the technology and product-quality fronts, with a number of
its technology products—ranging from semiconductors to computer-monitor
and LCD screens—climbing into top-five positions in global market share.
The 2000s witnessed the birth of Samsung’s Galaxy smartphone series,
which quickly not only became the company’s most-praised product but also
frequently topped annual lists of the best-selling smartphones in the world.
Since 2006, the company has been the top-selling global manufacturer
of televisions. Beginning in 2010, the Galaxy series expanded to tablet
computers with the introduction of the Galaxy Tab.
Lee Kun-Hee
SOUTH KOREAN BUSINESSMAN

Lee Kun-Hee, (born January 9, 1942, Ŭiryŏng, South

Kyŏngsang province, Korea [now in South Korea]), South Korean businessman
who was chairman (1987–2008; 2010– ) of the conglomerate Samsung
Group and chairman of its flagship company, Samsung Electronics (2010– ).
Lee was the youngest son of Lee Byung-Chull, who founded Samsung in
1938. He majored in economics at Waseda University, Tokyo, and earned a
master of business administration degree at George Washington University,
Washington, D.C. An active sportsman, Lee spent his leisure time riding horses,
racing sports cars on a private track, and raising dogs. In addition, he was
president of the Korean Amateur Wrestling Association and was involved with
a professional baseball team and amateur athletics.
In 1968 Lee joined Samsung, which was involved in electronics,
machinery, chemicals, and financial services. He served as the quiet
understudy of his father, who exercised absolute control over the conglomerate
and decided against making two older sons his successors. After his father’s
death in 1987, Lee became chairman of Samsung but left management to a
corporate staff. In June 1993, however, Lee launched a dramatic revolution
from the top to make Samsung—the largest Asian conglomerate outside
Japan—internationally competitive. Declaring that Samsung was “second rate”
by global standards, he called on each employee “to change everything but
your family.” Lee attributed the shortcomings of Samsung to basic weaknesses
in Korean society, including an educational system that stressed learning by
rote and an authoritarian style of leadership. He ordered radical reforms. Under
what Lee termed a “new management” concept, Samsung insisted that
subordinates point out errors to their bosses. It also stressed quality of products
over quantity, promoted women to the ranks of senior executives, and
discouraged bureaucratic practices.
Having emerged from a shy figurehead to an assertive chief executive,
Lee pushed Samsung into many new activities, such as automobile
manufacturing. Bolstered by a surge of investment, he aimed to make 20
percent of Samsung’s products outside South Korea by the year 2000.
Consequently, he built an electronics manufacturing complex in Wynyard,
England, and semiconductor plants in both Austin, Texas, and Suzhou, China.
He also acquired such companies as the U.S. computer maker AST Research,
Rollei Camera in Germany, and Lux, a Japanese manufacturer of audio
products. By 1996 Samsung Electronics ranked as the world’s leading exporter
of memory chips, and the entire group’s revenues in 1995 totaled $87 billion,
equivalent to about 19 percent of South Korea’s gross domestic product.
In 1996 Lee was also among 11 prominent South Korean businessmen
drawn into a political scandal over corporate contributions to former
president Roh Tae Woo. A court ruled that such payments—though customary
in South Korea—were bribes. In August 1996 Lee was sentenced to two years
in prison, but the punishment was suspended for three years. He was later
pardoned by Pres. Kim Young Sam. In the late 1990s, Lee guided Samsung
safely through the Asian financial crisis, and at the start of the 21st century it
was one of the largest conglomerates in the world. In April 2008, however, Lee
was indicted on charges of breach of trust and tax evasion, and shortly
thereafter he resigned as chairman of Samsung. In July he was convicted of
tax evasion, and he was subsequently fined approximately $80 million and
sentenced to three years suspended jail time. Lee was pardoned by the South
Korean government in December 2009.
In March 2010 Samsung Group executives made Lee the head of
Samsung Electronics, the conglomerate’s largest division. Later that year he
returned as chairman of the Samsung Group. However, in 2014 he suffered
a heart attack that left him incapacitated. Although Lee retained his posts, his
son, Lee Jae-Yong, became the de facto leader of the Samsung Group. In 2018
it was announced that the elder Lee was again being investigated for tax
evasion.