Samsung wants to act like a start-up – good luck with that

24 Mar 2016

Samsung, the world’s biggest manufacturer of smartphones, which employs 300,000 people, wants to channel the energy of more nimble, fast-moving start-ups.

How is it going to do that? First up, the company is reducing the number of levels in its staffing make-up, and then it’s going to encourage far more interaction between the remaining levels.

Basically, Samsung thinks it’s getting lame, with sales sluggish and, as bureaucracy is at its highest point ever, operations sluggish, too.

The company held a ‘Start-up Samsung’ event at its HQ to announce the plans, with ‘excessive working hours’ as well as the number of unnecessary meetings to be reduced.

“By starting to reform the corporate culture, it means we will execute quickly, seek open communication culture and continue to innovate as a start-up company,” Samsung said in a statement.

By June, we’ll know the exact nature of the planned changes, but more holiday time is in the offing too.

Pressure everywhere

This all comes as Samsung battles against economic pressures right throughout its business models. Its smartphone channel is fighting against a behemoth in Apple at the premium end, and a never-ending supply of assorted challengers at the lower end of the spectrum.

Back in January, the company announced a 40pc drop in its Q4 profits, with smartphone sales suffering in particular.

Its semiconductor operation is under immense pressure from Chinese competition, and elsewhere there’s nothing really ‘new’ coming from the company in terms of added revenue streams, with many outsiders growing critical of the South Korean company.

Add to this the fact that company head Lee Kun-hee has been hospitalised for the last few years, with his son Lee Jae-yong in the process of taking over the business, and it makes for quite an unsettled time at Samsung.

Last year, the company hosted employee debates, which saw 26,000 take part. The numbers are staggering. Flexible hours have been introduced recently, the dress code isn’t as strict as it once was, and required attendance at after-hour drinking sessions is being phased out.

Whether a company that is the very picture of the word ‘corporate’ can indeed change into a leaner, more agile operation, though, is the big question.

Samsung image via Anton Watman/Shutterstock

Gordon Hunt was a journalist with Silicon Republic