Posted by: Ihlwan Moon on January 15, 2009
Will a new leadership shakeup inject fresh confidence into Samsung Electronics? That’s a key question many corporate analysts are asking as Samsung Group, South Korea’s largest conglomerate, prepares to announce a major leadership shakeup at its 59 affiliates, including its flagship Samsung Electronics. Spokesman James Chung at the electronics giant says an announcement will be made within days but declined to give further details.
The long-awaited leadership change at Samsung Electronics is significant for two main reasons. Firstly the new leaders will have to make key investment decisions in the face of the worst global slowdown since the Great Depression. Perhaps more importantly, the imminent announcement will give hints at who will emerge as the successor to CEO Lee Yoon Woo, who is largely seen as a stopgap figure. Lee was appointed as the CEO after both co-CEOs Lee Kun Hee and Yun Jong Yong stood down last spring in the wake of a tax-evasion scandal embroiling Samsung.
The influential Chosun Ilbo speculated today Lee Yoon Woo and Choi Gee Sung, now the head of Samsung’s telecom business, will form a “two-top” leadership. Lee is expected to head the component businesses of chips and liquid-crystal-diplay panels, while Choi is most likely to oversee set businesses such as TVs, handsets, PCs and DVDs, according to Chosun, which quoted an unnamed company source. Spokesman Chung declined to comment on the report.
Meanwhile, Samsung is expected to post its worst quarterly financial performance in a decade later this month as its memory chip and LCD divisions, traditionally major cash cows, no longer make profits because of sharp price declines. Nevertheless, Samsung will have to keep investing billions in chip and LCD facilities to maintain its leadership and increase market shares when consumers and companies start spending again in PCs, TVs and other electronic devices.
Some corporate analysts have said investors are beginning to lose confidence in Samsung in the lack of trend-setting products in the past year or so. While Lee Yoon Woo, as a 31-year-veteran of the company, has played a coordinating role, “what Samsung needs now is a stronger leader who could make quick investment decisions,” says Chang In Whan, head of fund manger KTB Asset Management.