Organization Change: The of Samsung Group - Case Study Example

Organization Change: The Case of Samsung Group Many companies, organizations, or processes end up being successful through a system of changes. Organization change is one of the major strategies that firms employ in order to achieve their specified goals and objectives. This paper entails the organization change, through which Samsung Corporation has gone in order to see its top position in the market for consumer electronics. Today, Samsung computers and mobile phone products have become among the most preferred brands by customers. This happens despite the company being Korean. Due to the organization change, which was initiated in 2008, the company has emerged a global icon in consumer electronics. It has managed to beat top companies like Apple and IBM after the organization restructuring. In addressing the organization change, the paper uses model and theories to strengthen the company’s organization change analysis. The sustainability of the company has been one of its central concerns since its establishment. Due to effective organization change, Samsung Group has become the largest brand in consumer electronics. The company is today a multinational conglomerate, with its headquarters in Seoul, South Korea and specifically in Samsung Town. Through the chairmanship of Lee Kun-Hee, Samsung Group managed implement a reform plan, which includes structural overhaul as well as personnel reshuffle. The organization change of the company involves efforts to eliminate any cases of corruption, poor leadership, quality improvement, increased productivity, and increased profitability among other objectives. Other than the personnel reshuffling and the structural overhaul, the company saw Lee Kun-Hee leave his position due to tax evasion changes as well as breach of trust. The organization change also led to the disappearance of the strategic planning office for the company (TRIBUNE NEWS SERVICES). This change contributed to great innovation and inventions in both computer and phone technologies. Like any other focused business organization, the organization changes in Samsung Group were meant to make the company survive, grow, and boost innovation abilities. The rapid change in the global business environment, changes in consumer preferences, and advancements in technology are some of the key motivators for organization change by Samsung. Changes in business environment and the world in general make it difficult to predict the future, due to the numerous opportunities as well as pitfalls that pass by every moment. Typically, organization change is part of an organization’s strategy just like it the case of Samsung. From the countless techniques, methods, and methods available for businesses to improve on productivity, quality, profitability, and customer satisfaction, managements have many choices for an effective organization change (Cummings and Worley). This aspect has caused a significant success to Samsung Group after a system of organization changes since it was first established. The current event The new management reform plan is one of the most remarkable organization changes in the multinational corporation. This organization change was triggered by the case of allegedly poor leadership and corruption cases under the leadership of Lee Kun-Hee. The chairman was charged with evading about $114 million in the form of taxes as wells breach of trust. It was also claimed that Samsung Group had used some subsidiary companies as a way of raising funds in order to bribe some of the most influential South Koreans. Again, it was claimed that the company had engaged in illegal deals in order to ensure that the leadership of Lee is passed to his son. These cases of mismanagement of funds and corruption deals also involved other nine Samsung executives as well (TRIBUNE NEWS SERVICES). Given that such cases could not only destroy the company’s reputation but also affect its success, a reform plan had to be structured as an organization change mechanism. This organization change was a 10-point management reorganization plan, which unveiled on April 22, 2008, within a news conference. The management reform plan concentrated on personnel reshuffle as well as a structural overhaul. The personnel reshuffle included the exit of Lee Kun-Hee as the company’s CEO. His family was also removed from the top management positions of the company. The structural overhaul conversely included disbanding the company’s Strategic Planning Office. This office was then serving as Samsung Group’s command center (TRIBUNE NEWS SERVICES). The company found the need to change given that the case of Lee was the biggest ever happening within the long history of the biggest empire in Korea. The organization change in this case could be explained through contingency theory, which is a theory of behavior claiming that the organization of an organization has hardly one way that could be considered as the best or the most effective in leading an organization or in making decisions. The theory asserts that a leadership style or even a style of making decisions that is found to be effective in specific situations may hardly be successful in other cases. This theory explains why the personnel reshuffling were considered in the organization change exhibited by the reform plans (TRIBUNE NEWS SERVICES). The optimal leadership or decision-making style according to the theory depends on contingency theory factors such as organization size, firm’s ability to adapt to its environment, managers assumptions about employees, strategies, and prevailing technologies. Samsung was very successful in all these factors implying that only change in both leadership, human resource structure, and some elements of its physical structure could have contributed to positive change. This happens in accordance with the theory (University of Twente). With regard to Samsung’s structural overhaul, contingency theory holds that there is hardly any universal way of managing an organization. The most important aspect is that both organization’s design and its subsystems have matched the environment. The same concept is supported by the Decision participation Contingency Theory (University of Twente). This model holds that decision procedure effectiveness depends on decision quality as well as acceptance, and the level of subordinate disagreements to the available alternatives among other factors (Cummings and Worley). The disbanding of the central command office was based on this aspect in which the quality of decisions made was found to be more important than the center of decision-making. Some recommendation on this organization change by the Samsung Group could be made based on the resulting benefits and the company’s competitive position today. First, the management reform plan was one of the best organization changes that the company has ever made, but the case of Chairman Lee should not have extended to his family. The best way to eliminate his corrupt deals is to have him investigated alongside any other suspected personnel. Only the involved relatives should have been removed from the management. Again, the company should run regular employee evaluation to evaluate any cases of incompetence or unfair leadership. External auditing should also be conducted regularly to avoid similar cases of corruption within the company. The reason for making such recommendations is that Samsung Group is today the global leader in consumer electronics, a position attained to the immense sacrifice and efforts of the current team or employees. The company needs to be protected to continue with its spirit of offering quality products to its customers (Cummings and Worley). The company also holds a significant position in economic and social development, which can only be enhanced through good leadership. Works Cited Cummings, Thomas and Christopher G. Worley. Organiztional Development & Change, 9th edition. Mason: South-Western Cengage Learning, 2009. Print. TRIBUNE NEWS SERVICES. Samsung prepares reform plans. 18 Apr 2008. Web. 29 Jan 2014. < http://articles.chicagotribune.com/2008-04-18/business/0804170749_1_taxes-and-transfer-wealth-nine-other-samsung-executives-chairman-lee-kun-hee> University of Twente. Contingency Theories. 26 Nov 2013 . Web. 29 Jan 2014. < http://www.utwente.nl/cw/theorieenoverzicht/Theory%20clusters/Organizational%20Communication/Contingency_Theories/> Read More