China News Service, October 25 (Ho Luman) Comprehensive report, on October 25 local time, Samsung Group Chairman Li Jianxi passed away at the Seoul Samsung Hospital at the age of 78. As South Korea’s most successful entrepreneur, how did Lee Jianxi create the “Samsung Republic”? After his death, the “New Samsung Era” led by his son Lee Jae-yong has officially kicked off. What challenges will he face?
Start a new business era:
“Except for my wife and children, everything must change”
Li Jianxi was born in Gyeongsangnam-do, North Korea, Japan in 1942. After returning from studying in the United States in 1966, he joined Samsung’s Toyo Broadcasting Corporation. Two years later, he served as Director of Toyo Broadcasting. In 1978, he was promoted to Vice Chairman of Samsung C&T, and the following year to Vice Chairman of Samsung Group. President.
Data map: Lee Jianxi, President of South Korea’s Samsung Group.
In 1987, after the death of his father Li Bingzhe, Li Jianxi took over as the chairman of Samsung Group.
In February 1993, Li Jianxi called out in Los Angeles. Los Angeles was the first stop he led hundreds of senior executives of the group to a global advanced company for a six-month inspection. In the large supermarket he came to accidentally, he was stimulated-the position in front of the booth was completely occupied by the products of Japan’s Sony and NEC, while Samsung’s products were covered with dust and were abandoned in the back corner.
In the great transition period at the end of the century, if Samsung does not take innovation, it is tantamount to going to the end. The sense of crisis that emerged at this moment of life and death led Li Jianxi to publish the “Frankfurt Declaration”-“Except for his wife and children, everything must change.” He asked the whole company to reform and start a new era of business.
In 1994, Samsung launched its first mobile phone, which laid a solid foundation for the launch of the smartphone Galaxy. Samsung is reborn as a global manufacturing company.
Under his leadership, the company has achieved an all-round leap forward in quality and design management. Samsung’s total market value has also increased from 1 trillion won in 1987 to 390 trillion won in 2012, a 40-fold increase, and its total assets are 500 trillion won. Samsung thus became South Korea’s largest economic group, and Lee Jianxi himself became South Korea’s most successful entrepreneur.
A sense of crisis permeates the business method:
“There can be no hesitation for a moment, only forward”
Management experts believe that the key word that runs through Li Jianxi’s management method is “crisis.”
Data map: Samsung Electronics Building in Seoul, South Korea.
In 1996, it achieved an average annual growth rate of 17%. When the company was excited about it, Li Jianxi, who was visiting the Tijuana Electronics Complex in Mexico, urgently convened the president team to San Diego, USA. He reproached, “I thought I had gained some profit from selling a little semiconductor, but I forgot where I was, just blindly proud and complacent.” As a result, Samsung employees immediately began the “Expenditure 330 Campaign” to reduce costs and expenses by 30% in all business areas over a three-year period.
In addition, Li Jianxi’s “sense of crisis” is also reflected in the changes in personnel policy. In 2010, 68-year-old Li Jianxi proposed a new way of appointment of personnel. He broke the long-standing tradition of “year-end personnel changes” and began to replace the presidents and executives of major subsidiaries responsible for the decline in performance at any time.
He told the staff: “In the next 10 years, most of Samsung’s industries and products will disappear. We can’t hesitate for a while, only move forward.”
Value female talents:
“Suppressing women’s ability is the company’s loss”
“Just imagine, if you let men take on their careers and family, they will probably run away, including me.” In April 2012, Lee Kin-hee once invited female senior staff for lunch in the office on the 42nd floor of the Samsung Electronics Seocho office building. Yes, and talked about the role of women.
Data map: People stand outside the showroom of Samsung Electronics headquarters in Seoul, South Korea.
He asked: “Women hide powers that men don’t have. How do they handle work and family affairs well?”
Li Jianxi said: “Women have the power to conceive in October and can easily overcome the pain of childbirth. Maternal love is different from father’s love. It is a very powerful force.”
He believes that “if the ability of women is inhibited, it will undoubtedly be a loss for the company and the country.”
Li Jianxi pointed out: “I will pay more attention to female talents in the future and further increase the current female recruitment rate of about 30%.”
Controversy over merits and demerits?
Leading the South Korean stock market’s rich list for many years, has been individually amnesty
According to statistics from CEO SCORE, a corporate management evaluation website, as of December 30, 2019, Li Jianxi’s stock assets were 17.6213 trillion won (approximately RMB 105.2 billion), a year-on-year increase of over 4 trillion won, leading South Korea for 5 consecutive years The stock market rich list.
In addition, in the 2019 global billionaire list released by the US “Forbes” magazine, Li Jianxi ranked 65th with $16.9 billion.
However, as the most successful entrepreneur in South Korea, although Lee Jianxi has received a lot of attention, he has also been subjected to various investigations and even sentenced for a time.
Data map: Lee Jianxi, President of South Korea’s Samsung Group.
On August 14, 2009, Lee Jianxi was sentenced to 3 years in prison, suspended for 5 years, and a fine of 110 billion won by the Seoul High Court for illegal bond transactions. But because Pyeongchang was facing the challenge of bidding for the third Winter Olympics, the sports and economic circles strongly urged that IOC member Li Jianxi must come forward to ensure the success of the bid.
On December 29 of the same year, the South Korean government reviewed and approved the Lee Jianxi pardon at the State Council. At the meeting, then President Lee Myung-bak said that the decision was made “out of national interest considerations.”
This is the first time that South Korea has granted a separate amnesty to members of the economic community. At that time, the Ministry of Justice stated that the upcoming International Olympic Committee meeting in February 2010 is a very important opportunity to bid for the 2018 Winter Olympics. If Li Jianxi is not pardoned, he may lose his membership of the International Olympic Committee and be unable to participate in the Pyeongchang bid.
Li Jianxi has been a member of the International Olympic Committee since 1996 and won the Olympic Medal in 1991. After being admitted to the hospital in 2014, he could not continue to participate in the activities of the IOC members. In August 2017, the IOC accepted Li Jianxi’s request for resignation.
In addition, in February 2018, the Korean Financial Supervisory Service and police investigations found that more than 1,000 Li Jianxi’s borrowed accounts were suspected of tax evasion.
Korean media pointed out that Li Jianxi is a strong leader who never relaxes. In response to the coming crises, through decisive investment, he cultivated Samsung into the world’s largest company. Although there is controversy surrounding his merits and demerits, no one doubts that without his extraordinary ability and leadership style, there would be no Samsung as a global brand.
The curtain was opened in the era of Li Rong:
The right to operate is not passed on to the children, and change to the “new Samsung”?
After Lee Jianxi was hospitalized with a heart attack in 2014, his son Lee Jae-yong became the actual head of Samsung and joined the Samsung Electronics board of directors in October 2016. After the death of Li Jianxi, the Samsung era led by Li Jayong officially kicked off.
After Li Zairong is fully responsible for the management, he has been seeking a change in his face. However, the comments pointed out that the “Lee Jae-yong system” could not be fully established due to the previous Li Jianxi’s bed sickness and Samsung-related investigation and trial risks. Therefore, he may devote himself to the transition to the “new Samsung” in the future.
Data map: South Korea’s Samsung Group Chairman Lee Jianxi and his eldest son Lee Jae-yong.
On September 1, 2020, Lee Jae-yong was sued for allegedly manipulating stocks, violating capital market laws and external audits, and violating trusts, as well as accounting fraud during the IPO of Samsung Bioproducts, thus succeeding Lee Jae-yong. The group creates a favorable environment.
This is also the first time he has been involved in lawsuits after three and a half years since he was prosecuted for illegal bribery during the scandal involving former South Korean President Park Geun-hye’s “girlfriends’ politics” in February 2017. In addition to Li Zaiyong himself, 10 former and current senior executives of Samsung have also been prosecuted for similar charges.
The analysis pointed out that among the allegations involving Li Zairong, the core and highest sentencing allegation was whether illegal means were taken in order to successfully complete the inheritance.
However, Lee Jae-yong said that many external disputes about Samsung originated from inheritance matters. From now on, he will invest all his energy in improving the value of the company and promised that he will not be triggered by heir issues. The dispute, “I will make it clear that I have no plan to hand over the right to operate the company to my children.”
This means that from the founder Li Bingzhe to Chairman Li Jianxi, and then to Li Zairong’s grandfather and grandson, the three-generation family management blood succession model has ended.
Samsung Group Profile
Founded: In 1938, Li Bingzhe established the “Samsung Chamber of Commerce”, the predecessor of Samsung Group
Total market value: 519 trillion won (July 2020)
Field: The business involves electronics, finance, machinery, chemistry, etc.
Ranking: The total market value ranks first among the 30 largest Korean groups