Samsung Organization Structure and Human Resource Management

Samsung Organization Structure and Human Resource Management

From the perspective of organization structure, generally speaking, Samsung’s organizational structure is bureaucratic and hierarchical. To be more specific, in the first place, according to the organizational chart of Samsung that has been attached below, the organizational chart has been exclusively vertical. The chief executive officer of Samsung is under the overall control of every single business departments including consumer electronics department, IT and mobile communications department, device solution department and also corporate management department. Similarly, chief operational manager, chief accounting and financial manager and chief investment manager are responsible for taking charge of separate departments. In the second place, when it takes the South Korean culture into consideration, the reason of such a vertical and mechanical organizational structure has been apparent. As per statement of Lee (2012) who is the professor of Pittsburg State University in U.S.A., South Koreans have extremely high power distance under Hofstede’s theory of cultural dimensions, thereby contributing to a hierarchical society. In other words, in general business context, companies tend to have strict scrutiny of business procedures from upper level to lower level. As a result, Samsung has no exception. In more details, it has strong preference to company formalization and disciplines. For instance, lower position employees just follow orders from the higher level managers as they believe that decisions makings from senior management should be comprehensive and less possibly to be flawed. The last but not the least, in terms of the research, it is evident that different departments within the Samsung Group tend to be exclusive to each other.(Lee, 2012) Consequently, the communications across departments are less likely to be lateral and effective. The fact that Samsung customers’ recent years’ complaints regarding the lack of innovation in electronic products due to hierarchical organizational structure serves as a convincing illustration in this case.

When it comes to people management practices, Samsung Group has showed its initiatives to care about its employees. To begin with, Samsung Group regards employees’ safety as priority. For example, in order to ensure employees work in safe and pleasant environment, it is a must for every single manufacturing plant to acquire an “occupational health and safety management system.” (Samsung, 2016) By doing so, there will be a higher possibility that employees are able to achieve the sense of work safety, thus enhancing their loyalties to Samsung. In terms of the 2015 Samsung Electronics annual report, employees’ retention rate with 2015 financial year increased dramatically from 15.2% in 2014 to 18.26% in 2015 and low rate of work place injuries could be one of the contributing factors. (Oakland & Oakland, 2010) In addition, as has been mentioned above, since one of Samsung’s organizational cultures is hierarchical and bureaucratic management practices, senior management have strong willingness to hold the decision making power, but do not want to empower their employees. However, recent years have witnessed a subtle change in Samsung’ management style, which can be demonstrated by its people management practice, namely employees’ motivation scheme. Samsung Group has attached great significance to employees’ rewards and bonus system. With a view to motivating employees to work in the best interest of the company and strive to achieve high productivity in the workplace, Samsung has introduced a series of employees’ motivation schemes. For example, employee volunteer management scheme is established to encourage employees to perform in a management position to provide them with an opportunity to comprehend the managers’ duties and contribute to the development of sense of self-actualization and fulfillment. The last but not the least, Samsung also applies performance-based remuneration rewards system, which is established to trigger employees’ enthusiasm towards hard workings.