Electronic Firm Is Trying to Raise Its Profile in Europe and the U.S.
David Steel, 35-year old Briton, was recently named to
the highest executive post ever held by a foreigner at
Samsung Electronics Co. His assignment: to help the
conglomerate act more global.
At Samsung, that challenge begins with the commute to
work. One recent winter day at 7 a.m., Mr. Steel sat on a
crowded Samsung bus with other employees heading toward
the chip maker's manufacturing comlex outside Seoul. When
the last employee walked on, the only empty seat was next
to the blond Mr. Steel. The man eyed at him nervously, and
chose to stand for the hour-long ride. "People
feel a certain discomfort sitting next to me, even though
we work in the same office," Mr. Steel laments. He
says that it is not because his colleages are unfriendly,
but they fear speaking English improperly.
It is likely a taste of that is to come for Mr. Steel,
as South Korean's biggest conglomerate seeks to adopt a
more worldly posture. Samsung's management, until recently,
was dominated by the founding family and is still filled
with career-long employees. Until three years ago, more
than 90% of its executives had graduated from Korea's
prestigious Seoul National University and had been with
the company for at least 20 years.
But this uniformity is in conflict with Samsung's
crusade to become a global electronics company on par with
Sony Corp. Until the mid-1990s, Samsung made electronic
goods for other companies. Now, it makes its own products,
from cellular phones to MP3 players, including some of the
world's top-selling consumer electronics. About 70% of its
$24.6 billion (€27.8 billion) in revenue last year came
The company's next step has been aggressively trying to
raise its profile in the U.S. and Europe by forming
strategic alliances with the likes of AOL Time Warner
Inc., Sprint Corp. and Microsoft Corp. The next step for
Samsung, which employs about 66,000 people in 50 countries,
is to teach its managers to become to be more global in
their outlook. "We want to strengthen and develop the
ties we made with our foreign partners," says Ahn
Seung Jun, a vice president at Samsung's
corporate-human-relations team. "One way we plan to
do that is by going after the best foreign talent."
Enter Mr. Steel, who started with Samsung four years
ago as a senior consultant. In January, the company's
chief executive, Yun Jong Yong, appointed him voce
president of business development. Officially, Mr. Steel,
who graduated with honors from Oxford University and
earned a doctorate in physics from the Massachusetts
Institute of Technology, is responsible for alliances and
partnerships. He is often on the road with Chin Dae Je,
the chief architect of Samsung's memory-chip business.
Unofficially, he also is responsible for helping Samsung's
executives interact more naturally with their counterparts
Mr. Steel and his six-person team, the other members of
which are Korean, will spend some time studying the
company's various departments before making
recommendations. But client relationships already is
emerging as a problem area. When Samsung executives meet
with foreign customers to discuss future purchases, for
example, Samsung's requests are often construed as demands.
"Several times, I
saw Samsung telling our clients what they should do.
… 'Your company bought this much last year, so we want
to buy that much next year'", says Mr. Steel.
That may not be considered impolitic (this word is a
new creation of the Korean editor - Jolle) in Korea, but
it is enough to worry Mr. Steel. "I told my
colleagues that we could never strengthen and build
relationships like that," he says. Mr. Steel has
begun distributing research material to his colleagues
before each trip, highlighting the client's interests and
goals. He says he has noticed that many of the people he
works with contact customers only when they need something.
He is pushing his team to write more e-mails and letters
to Samsung's clients to nurture those relationships. Every
week he asks his staff for updates.
This drive to be more attuned to other cultures and
business styles is playing throughout corporate Korea, as
once-insular companies begin to open up to new ideas. Many
companies, for instance, have moved to performance-based
bonuses rather than lockstep increases determined by
seniority. At the same time, promotions are increasingly
merit-driven. South Korea's financial sector is a hotbed
for these kinds of changes, as some of Korea's biggest
banks were taken over by foreign management following the
regional economic crisis.
"The most important thing about my recent
promotion is that it gets me a seat at the table,"
Mr. Steel says. He now attends all executive-level
meetings, where he can pitch ideas and suggestions
directly to other executives.
But Mr. Steel's early experiences show that simply
putting a foreign face in an annual report, or even giving
him a seat at the decision-making table, doesn't
automatically change a deeply entrenched corporate culture.
He remembers a recent business trip to the U.S. to meet
clients in which he entered a meeting with an entourage of
15 Samsung employees. Although
it is common among Korean companies to travel in packs,
Samsung's U.S. clients were startled. They had to scramble
to find chairs for everyone.
Since then, Mr. Steel has tried to pursuade Samsung's
executives to send fewer people to meetings at U.S. and
European companies. Mr. Steel, who speaks and reads Korean
well enough to get by without a translator, says he has
raised the matter over a dozen times at Samsung's weekly
meetings. "Intellectually, they would agree, but come
next trip, everyone ends up going," says Mr. Steel.
He confesses that his job can be frustrating and at times
discouraging. "I've learned to choose my battles,"