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Daewoo

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The paradox of Samsung’s rise

Founder: Lee Byung-Chul 1938.

Samsung’s past challenges:
• Compete outside Korea: Especially in the new digital market (during the 90’s)
• Increase innovation and creativity: by improving marketing, R&D and design notably
• Maintain the old model of cost leadership and manufacturing efficiency: While shifting its paradigm from being an Original Equipment Manufacturer (OEM) to being a Leader in the industry
 answers to past challenges: hybrid management system
• Seniority and Merit-based promotions and compensation: With some individual incentives
• More open recruitment for all positions: Including foreign employees and executives. Bringing outsiders in, sending insiders out.
• More dependence on external market labor: Paid to the level of and attracted by market-based compensation
Current HRM challenges :
• Labor market flexibility (generally in Korea):
• the process of hiring or firing in a flexible manner , based on business needs;  Vs. job security and long-term employment guarantee
• Relations with suppliers and contractors and resulting HR issues: o Strikes and demonstrations; gap between office (in) and factory workers (out) o Occupational Disease victims and their claims to compensation (ongoing) o Hostility towards unions and harassment and repression of suspected union activists (suicide cases)
Opening question: Does Samsung have a true Global Mindset ?
-Maddux et al. (HBR, 2010) claim that people who lived abroad are more creative and better problem solvers, but ultimately better managers
-Black and Gregersen (HBR, 1999) tell us that the right expats should be sent for the right reasons (LG case)
-Gupta & Govindarajan (AME, 2002) insist on the importance of cultivating curiosity about the world

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