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The business legend and controversial life created by Li Jianxi after the death of Samsung Godfather

via:CnBeta     time:2020/10/25 17:29:12     readed:211

According to Yonhap news agency, South Korea's Samsung President Lee Kin hee has died at the age of 78. Since Li Jianxi took over Samsung, he has led Samsung into semiconductor, storage, display, mobile phone and other fields, and beat Nokia, Sony, Toshiba, sharp and other enterprises to become the first in the industry. In addition to the well-known consumer electronics field, Samsung has already grown into a huge business empire covering machinery, chemical industry, finance, insurance and other fields in South Korea.


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In July, Forbes released a list of South Korea's richest people in 2020, with Lee at the top of the list, with a fortune of $17.3 billion. His son, Lee Jae Rong, Samsung's vice president, ranks fourth with a fortune of $6.7 billion. He is also known as the "economic president" because he is the top of South Korea's rich list all year round.

At the same time, after Lee zaireng took over Samsung, there was a note 7 explosion and he was involved in the "scandal of Park Geun hye's cronies interfering in politics", which made SamSung group, South Korea and even the whole world admire Li Jianxi's leadership. The financial times once said bluntly: "Li zaireng does not have the charisma of a leader like his father."

The "secretary room" of the core authority department

In 1987, on the day of the unfortunate death of former Samsung president Li Bingzhe, the board members unanimously approved the decision to appoint his youngest son, Li Jianxi, as president of Samsung. At that time, Samsung was only a manufacturing company in South Korea, and it was not famous in the world. Li Jianxi deeply knows that "although Samsung is a unique technology giant in South Korea, it is only a second-class enterprise in terms of import and export trade and imitation of Japanese similar products in the whole world.". And because of excessive expansion, Samsung's debt ratio was as high as 300%.

On the first anniversary of taking office, Li Jianxi put forward the new management slogan of "quality-oriented", abandoning the previous management line of quantity. However, it has not received the support of Samsung employees, especially some of the Samsung veterans who have followed Li Bingzhe to start a business. Li Jianxi realized that although he was the president of Samsung, he did not have the control of Samsung, which was mainly caused by the particularity of Samsung's management structure.

In the era of his father Li Bingzhe, Samsung acquired many companies in different fields. In order to solve the management problems, Li Bingzhe gave all the daily affairs to the subordinates of various departments and subsidiaries, and only made strategic decisions. In order to improve the efficiency of decision-making, Li Bingzhe also referred to Japanese enterprises such as Mitsubishi, Mitsui and Sumitomo, and set up a secretary room for Samsung to take charge of the implementation of the company's large and small decisions. In the future, the secretary room has gradually become the most powerful organization in Samsung Group, which controls the key functions of finance, personnel and decision-making.

As a result, he opened the knife to the internal system of Samsung and renovated the secretary room. First of all, the power of the Secretary's office is delegated to the level of the senior management of each subsidiary company and each department, so that the contradiction between the two originally colluding groups begins to fight. Since then, the number of staff in the Secretariat has been reduced to 100 in 1998. In 1999, the secretarial office was completely abolished, but the "structural adjustment department" was established.

In fact, the function of this department is exactly the same as that of the Secretary's office, except that all the members of this department are close relatives of Li Jianxi and only serve the Li Jianxi family. Although the "structural adjustment department" is still the highest authority department of Samsung, it only controls the salary of employees of Samsung subsidiary, and has no right to interfere with the financial operation of the subsidiary.

New management and brand image reconstruction

In 1993, Li Jianxi led a large number of Samsung executives to the U.S. Department stores. He found that his products were put in the most insignificant corner of the store, while famous brand products such as Sony, which were obviously much more expensive than Samsung, were very popular. After investigation, he found that the quality of Samsung's products was poor, and the defective rate was as high as 11.8%. Therefore, even if the price is low, it is not competitive.

Internal, launch quality campaign, quality first thought into materials, daily organization of staff learning. At the same time, in the production line to implement the stop mechanism, once found non-conforming products, immediately stop maintenance, Li Jianxi himself even on strategic issues with thousands of executives to talk; personnel reform, vigorously promote young people, Reuse skilled people. Implement 7 4 system, work at 7 am, work at 4 pm, give employees more time to live and charge.

In terms of talents, Li Jianxi has always adhered to the "talent management concept", which is to cultivate local and collect excellent talents in the world and dig talents crazily. He believes that in most cases, super top talent will create super first-class products.

To the outside world, Li Jianxi resolutely gave up the original trademark of Samsung and invited a professional team from the United States to design a more international blue oval pattern, and this logo has been used by Samsung Group to this day;

We should withdraw from Wal Mart and other large supermarkets and transfer to best buy and other professional stores for sales; we should implement the brand strategy, take back the advertising rights of its subsidiaries, and hand over to the advertising giant FCB, and spend a lot of money to join the top 10 program of the Olympic Games.

Bet on advantageous industries, reduce expenditure and prepare for the future

The new operation has established Samsung's high-quality positioning and is also a decisive turning point in its development process. By 1996, Samsung's many products, from semiconductors to computer monitors, from TFT-LCD displays to color picture tubes, have leapt to the forefront of the world.

However, Li Jianxi believes that Samsung's semiconductor only has absolute advantages in the world, but there is a big gap between other departments and the United States and Japan. Therefore, he ordered to reduce the funds by 30% and concentrate the funds on the businesses that are expected to become the first in the world in the future.

Four years later, a financial storm swept through Asia, and a large number of Korean enterprises declared bankruptcy. Except for semiconductor business, Samsung all showed a downward trend, but fortunately, it took precautions to overcome the crisis by reducing salary by 10%, reducing investment and decisively cutting down unprofitable businesses such as satellites and trucks. It also took advantage of the situation to introduce new management processes. Business week later said Samsung was the only plutocracy to survive the currency crisis.

However, the haze of the financial crisis, not long after the new year's speech, Li Jianxi put forward the concept of new business for the third time, and announced to the world that after five years, Samsung will truly become a world-class enterprise.

Since then, storage, display and other Japanese enterprises have successively defeated Sony, Toshiba, sharp and other Japanese enterprises, becoming the first in the world. In 2012, Samsung's mobile phone also reached the top.

At the same time, Li Jianxi also built a strong team for Samsung Electronics. In 2014, Samsung Electronics had 2862.84 million employees, including 5771 doctors and 69000 global research and development personnel.

In addition to the well-known consumer electronics field, Samsung has already grown into a huge business empire covering machinery, chemical industry, finance, insurance, entertainment and other fields in South Korea. It has become the first of the four major consortia in South Korea and has mastered 20% of South Korea's economy. Therefore, some people once joked that Korean people can't live without three things - tax, death and Samsung.

Samsung is also one of the largest multinational enterprise groups in the world. It is estimated that the overall revenue of Samsung Group will exceed 300 billion US dollars, surpassing German Volkswagen Group and Japan Toyota, ranking eighth in the world's top 500.

Corruption, bribery, the controversial life of chaebol Li Jianxi

It is undeniable that Li Jianxi's super leadership has brought success to the company, but Li Jianxi is a man with great controversy.

When Li Jianxi took over the chairmanship of Samsung, Samsung, whose predecessor was the Samsung trading company founded in 1938, has led many industries in the country. Through years of development, Samsung has become a model of Korean family consortia, integrating Confucianism, family relations and government influence. The background of "political and business integration" once made Lee Jianxi sought after as "economic president" by Korean people.

During Li Jianxi's term of office, the support of the government also made Samsung overshadowed many times.

In 1997, South Korean journalist Li Shanghao released the recording of a conversation between Lee Hezhu, vice chairman of SamSung group, and Hong Xixuan, South Korean ambassador to the United States. The recording revealed that Lee and Hong plan to provide 1 billion won (about $3 million) in campaign funding to South Korean presidential candidates, and to involve Samsung in a scandal of bribing prosecutors.

According to Li Shanghao, Samsung has been blocking accusations of corruption by manipulating its main South Korean media, the central daily.

After the incident, Hong was forced to resign as South Korea's ambassador to the United States, while Li Hezhu was sentenced to two years' suspended sentence for bribing the former president in another corruption case.

And that's just the beginning.

In November 2007, Jin Yongzhe, who was the chief lawyer of SamSung group from 1997 to 2004, exposed Li Jianxi's criminal behavior: embezzling about $10 billion through Samsung subsidiaries, destroying evidence, bribing government officials, and ensuring the smooth transition of power to his son.

Li Jianxi was immediately charged. Because of this case, Li Jianxi received the important attention of South Korean prosecutors. Later, in 2008, Li Jianxi was exposed to embezzlement and tax evasion, and formally resigned in April that year.

However, despite prosecutors' demands for a seven-year prison sentence and a $350 million fine, Li received only three years' imprisonment and a $100 million fine. In 2009, he was granted amnesty by then President Lee Myung Bak, and returned to Samsung in 2010 to continue to take the top position.

At that time, South Korean President Lee Myung Bak said the decision was made out of national interests. He said that Pingchang city is facing the challenge of bidding for the third Winter Olympic Games. The sports and economic circles strongly call for the participation of IOC member Li Jianxi to ensure the success of the bid. Due to the case, Li Jianxi was suspended by the International Olympic Committee.

It is the first time South Korea has granted a separate amnesty to people in the economic community, and it has also aroused widespread criticism that corrupt family consortium executives enjoy special treatment. Finally, in a voice of doubt, Li Jianxi took up the post of chairman of Samsung Electronics the following year.

Lee also lived up to expectations. In July 2011, Pyeongchang of South Korea won the right to host the 2018 Winter Olympics by beating two European cities, Munich, Germany and Annecy, France, by an absolute majority of more than half of the votes in the first round.

It is worth mentioning that Li Jianxi has been in bed coma since his heart attack in 2014. In 2018, when he was no longer in power at Samsung, the scandal of using a large number of borrowed accounts for tax evasion was exposed again. According to South Korean media reports, the South Korean police agency found that Lee Jianxi, President of Samsung Electronics, and an executive at the president level opened 260 illegal borrowing accounts in the name of 72 senior executives of SamSung group, with hidden funds of more than 400 billion won (about 2337 million yuan) and suspected of tax evasion of 8.2 billion won, and decided to file an investigation on suspicion of tax evasion. However, in December 2019, South Korean prosecutors announced a suspension of prosecution against Lee, mainly because of his poor health. According to Yonhap, the prosecution's decision actually means that they are closing the case against South Korea's richest man.

And Li Jianxi is not the last person in the business empire to fall into a controversial scandal. As the only son of Li Jianxi, Li zaireng joined Samsung Electronics in 1991, and then rose to vice chairman and joined the nine member board of directors of Samsung Electronics. It seems that it is a firm decision to inherit the business empire of Samsung.

However, Lee was accused by South Korean prosecutors for suspected rights and money transactions with Park Geun hye, and Samsung Electronics was accused of donating 20.4 billion won (about 120 million yuan), the largest amount among donation enterprises. In addition, Samsung is also suspected of spending a large sum of money to buy horses for Cui shunshi's daughter to practice equestrian. Finally, in August 2017, the South Korean court made a first instance judgment on Li Jae Rong's bribery case, and he was sentenced to five years' imprisonment. In December 2017, the Seoul High Court held a second instance closing trial of Li Zairong and four former Samsung executives. The special prosecution team suggested that the court sentence Li Zairong to 12 years' imprisonment. But in the end, in February 2018, Li was sentenced to two years and six months in prison, suspended for four years, and released in court.

Next, Li will continue to set sail for Samsung. Can the businessman who inherited his father's scandal continue his father's business legend?

Author: Zhao Jiayun and Yin Zixuan

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