With the death of Lee Jianxi, where will the Samsung empire go?
Editor’s note: This article from the public micro-channel number ” chief Business review “(ID: CHReview) , author: old knife.
In the summer of 1973, Li Bingzhe called Li Mengxi (the eldest son) over, and seemed to indifferently ask: “How many titles do you have?” “I don’t know exactly, there are probably a dozen.” “You can do it all.” Come on?” Li Mengxi obviously felt that his father was a little unhappy, and Li Mengxi replied, “You can’t do everything well.” Li Bing nodded and said flatly, “Then do what you can.”
Even so, Li Mengxi still did not understand what his father meant. A few days later, Li Bingzhe asked his son to write down all his titles and titles on paper. On that small piece of paper, the vice presidents or executives of 17 companies including Samsung Electronics, Joongang Daily, Samsung C&T, CheilJedang, Shinsegae, Oriental Life, Anguo Fire, and Cheil Industries , Director and other positions.
Li Bingzhe
Li Bingzhe picked up a pen and drew lines on these titles one by one. “Is it difficult to do this?” “Yes.” “That’s not okay, right?” At this time, Li Mengxi understood, and thought: “Oh! So my father is
Lee Mengxi went to Japan after spending 6 months idly. This time I went to Japan not because I had something to deal with, but because I was ordered by my father to take a rest. Of course, Li Mengxi didn’t know that this vacation would be his eternal vacation.
Although Li Mengxi went to Japan according to his father’s order, there is no doubt that he has complaints against his father in his heart. The following year, Li Bingzhe visited the Japanese branch, but Li Mengxi did not pick up the plane from the airport. This was the first time Li Mengxi publicly raised the flag of rebellion to his father.
At the meeting of the Japanese branch, Li Bingzhe thought that his eldest son was already working in the Japanese branch, so he chatted for a while, but the resentful Li Mengxi took the opportunity to raise his temper and said: “I came to Japan to rest, why do you want Go to the branch? I don’t have to go to the branch to work!”
In the spring of 1975, Li Mengxi returned from Japan, but he did not have a job that he could do. In today’s words, he was “snow hidden” by the company.
1 “Wooden Chicken” Succession
Li Jianxi is the third son of Samsung Group founder Li Bingzhe. He was raised by his grandparents since he was a child. At that time, Li Bingzhe’s successor was the eldest son Li Mengxi.
However, Li Mengxi was stubborn, arrogant, and very general in business ability. In the end, Li Bingzhe had to give up and choose Li Jianxi.
1979 2On the 27th, Li Bingzhe announced that Li Jianxi was promoted to the vice chairman of Samsung Group and officially announced his status as the heir of Samsung.
Before Li Bingzhe established his third son as heir, he wrote in his will: “The eldest son Mengxi’s mind is not about business. The second son, Changxi, doesn’t like to manage many companies. This cannot be ignored. Third son Jianxi also gave in at the beginning, but there was also the idea of ”Although the ability is not enough, you can try it.” For these reasons, I named the heir of Samsung Group as Jianxi, so the future Samsung will focus on Jianxi Continue to lead, and hope that the chairman of the “Central Daily News” Hong Ji will support Jianxi’s succession.”
After getting the notarization from the lawyer consultant, Li Bingzhe put the will in his safe. At that time, the public part of the will, Li Bingzhe announced that he would divide all his 15 billion won worth of assets, including shares and real estate under his name, into three parts, each of 5 billion yuan, one of which would be donated to the Samsung Cultural Foundation; To direct children and meritorious employees; the last 1 billion won was donated to establish the Employee Freemasonry Fund, and the other 4 billion won was temporarily kept by myself and will be disposed of later. Part of the content that is not disclosed is the candidate for the next chairman of the Samsung Group.
Li Jianxi was sent to Japan by his father to study when he was 11 years old. The second brother Li Changxi is 9 years older than Li Jianxi, so the childhood Li Jianxi is destined to be lonely.
In Japan, Li Jianxi repeatedly begged his father to let him return to China, but he was refused every time. Li Bingzhe said to him, you have to become as unwavering as a rock in the lake.
So, since childhood, Li Jianxi has been a very taciturn person. In the Korean business community, he got the nickname “Wooden Chicken”.
Li Jianxi later recalled that since I was born, I lived separately from my family, my personality became very introverted, and I didn’t have any special friends, so I always thought about problems alone… and at the most sensitive age, I have a deep understanding of ethnic differences, anger, loneliness, and missing my parents…
At home, my nickname is ‘the person without words’ and I am the most boring person. In 20 years, I and my family will eat out two or three times together . I go home every day, change into my pajamas and stay in my room, and almost never come out. The children get used to my temper and come in every other time and call Dad for another five minutes at most.
2 Establish status
On November 19, 1987, 12 hours after Li Bingzhe passed away, the Samsung Presidents Group held an emergency meeting in the Samsung headquarters building. The meeting decided to elect Vice President Li Jianxi to succeed the chairman. Ten days later, Li Jianxi’s inauguration ceremony was held. More than 1,000 people including the Samsung president group and all senior management attended the inauguration ceremony.
Li Changxi (left) Li Jianxi (middle) Li Mengxi (right)
At the inauguration ceremony, Li Jianxi delivered his inauguration speech in a trembling voice. At that time, Lee Kin-hee proposed that Samsung will carry out a “second venture”, through its own forward-looking business methods, before the advent of the 21st century. Star builds into a world-class enterprise.
But, just boarded the Throne The new head, with a shallow foundation, how can he realize his rhetoric? The business system that Li Bingzhe built in Samsung Group during his tenure as chairman is impeccable, and Li Jianxi cannot control Samsung at all with his status as a legal heir.
The system that Samsung has fixed for more than 50 years was established during Li Bingzhe’s period from top to bottom, and it is not easy to change, let alone young Li Jianxi. If Lee Jianxi wants Samsung Group to truly belong to him, he must solve the problem of the management system.
Although Li Jianxi had already announced the implementation of the “second entrepreneurship” when he took office, he did not correctly point out the situation at that time. Therefore, both the group executives and the employees at the bottom regarded his “second entrepreneurship” as unrealistic Meaningful slogan. With slogans alone, it is difficult for people to realize that the Samsung Group is in a transitional period of change.
How to truly realize the second entrepreneurship, and more importantly, how to get rid of the shadow of his father, this requires a test of Li Jianxi’s wisdom and his courage.
In order to let people understand the situation clearly, Li Jianxi chose the method of frontal attack and pointed the finger at the core of Samsung Group’s power: the secretary room.
The Samsung Secretary Office was established when Li Bingzhe served as the chairman. In 1967, the status and authority of the secretary office within the group have been greatly improved. During Li Bingzhe’s chairmanship, the most important task of the secretary’s office was to convey the guidelines and business directions of the chairman’s instructions to the subordinate companies, supervise and direct the business activities of each subordinate company, and collect and analyze relevant information of each subordinate company and at home and abroad. , And report the analysis results to the president.
In this way, Li Bingzhe consolidated his management system through the secretary office. During Li Bingzhe’s chairmanship, the secretary office was equivalent to his avatar in the Samsung Group. At that time, Samsung’s secretary office was very similar to the Ming Dynasty’s cabinet or similar to the Qing Dynasty’s “Military Office”, where it handled memorials, issued orders, and supervised the emperor.
Su Binghai was appointed as the head of the secretary office by Li Bingzhe in August 1978. At that time, the secretary office had 15 departments and more than 250 employees. Su Binghai had great power within the Samsung Group, and Su Binghai was equivalent to Li Bingzhe’s clone.
In 1990, Li Jianxi began to implement his plan to isolate the secretary office. At the beginning of the year, Li Jianxi reduced the number of departments in the secretary office from 15 to 10, which to a large extent weakened the authority of Su Binghai, the director of the secretary office. By cutting the secretg_000″ data-refer-type=”2″ href=”https://36kr.com/projectDetails/107515″ target=”_blank”>Sugar Collection group. Shinhan media included Lee Chang-hee’s wife Lee Young-ja and Li Changxi’s son, Li Jaekuan.
Li Jianxi got Samsung Life Insurance Co., Ltd. In addition, Li Jianxi also bought shares in Samsung Life held by other family members.
Through these actions, Li Jianxi first firmly controlled the shares of Samsung Group to prevent siblings from competing. In addition, through the suppression of the old system and the old officials, it established its own management system within the group. The Samsung Group has truly entered the era of Li Jianxi.
3 Second Entrepreneurship
But in fact, Samsung was already facing a huge crisis at the time.
In January 1993, Li Jianxi boarded a plane to Los Angeles. At this time, the media is reporting that “Samsung Electronics has developed the world’s first 8mm video tape recorder”, and everyone is immersed in joy.
After Li Jianxi arrived in Los Angeles, he decided to conduct a one-month market survey on Samsung Electronics’ development in the United States. He first led the executives of electronics-related companies to inspect the situation of several major stores in Los Angeles, hoping to understand the reputation of Samsung products in the stores and consumers.
In the home appliance hypermarket, what Li Jianxi saw was the glamorous world-class products such as HP, GM, Sony, Toshiba, and Philips. In sharp contrast, Samsung products were piled up in the corners and covered with dust, no one cares about them. Li Jianxi and the executives who accompanied him were shocked. They discovered that the Samsung products, which had always been self-reliant in South Korea, had fallen into such a desperate situation in the world market.
Li Jianxi ordered on the spot that from February 18th to February 21st, Samsung Group executives held a meeting at the World Plaza Hotel in Los Angeles. The theme of the meeting was to compare Samsung products with the world’s major electronic products in terms of design styles and product quality. And evaluation.
When reporting the situation, a director from the Americas Electronics Division said plausibly: “The responsibility for the decline in exports in 1992 did not lie entirely with America Electronics. Other subsidiaries should also bear part of the responsibility…” The words made Li Jianxi very angry. Before the director finished speaking, he shouted at him: “Please leave here immediately.”
Li Jianxi is usually reticent, and in the eyes of the group executives, he is a person who rarely loses his temper with others. Li Jianxi said that he did not need to continue to listen to such reports, and repeated the “let this director out” again.Then, he forced the director out of the venue.
On the day of the Los Angeles meeting, after expelling the director, Li Jianxi also reprimanded other senior executives of Samsung Group. Li Jianxi pointed out profoundly at the time:
Since 1986, Samsung has begun to show a trend of decline. Now, Samsung is no longer in the period of hard work, but the moment of life and death. If it cannot become a world-class enterprise, it will not continue to survive. Samsung’s televisions and video recorders have almost become synonymous with cheap goods abroad, and Samsung products have suffered discrimination overseas and have even been piled in corners.
Li Jianxi took the Los Angeles Conference as an opportunity to start the reform process in an orderly manner, starting the journey of breaking the old forces, breaking the old ideas, and reshaping the second entrepreneurship of the enterprise.
On March 22, 1993, the 55th anniversary ceremony of the Samsung Group was held. Tens of thousands of Samsung executives and employees gathered. Li Jianxi delivered a famous speech entitled “Second Entrepreneurship-5th Anniversary Message”.
Li Jianxi’s words are full of anger, hardship, and Laggards and other inflammatory words, for the whole The speech added a sense of momentum. He urged executives to put aside the superior psychology of Samsung Group as a top-ranking company in South Korea, recognize the development status of Samsung products abroad and the development trend of globalization, and safely take Samsung Group away from the fork in the road of life and death, so that it can embark on it. The right way forward.
In that year, Lee Kin-hee launched the “New Business Campaign” throughout the Samsung Group. Lee Kin-hee uttered the thought-provoking sentence that has been in Samsung Group and the entire Korean business circle: “Except for his wife and children, everything must change!”
Li Jianxi’s fire is very prosperous. After the Asian financial crisis, many companies have suffered a lot of headaches, but Samsung Group has achieved an impressive net income of 3017 trillion won. Li Jianxi’s victory in this reform has won him applause in the entire group.His position of authority has also begun to be truly established in the entire Samsung Group.
4 Overbearing King
Li Jianxi said in “Samsung New Management” by Samsung employees: “It’s almost okay to be a person’s ability, but it must be human.” Regarding the beauty of human nature, Li Jianxi said: “No matter how busy we are, as long as we are on the road When you see a child falling down, you should stop your hurried pace and help the child up is the right reason. Because this is human nature.”
After Lee Kin Hee took over the Samsung Group, he introduced a series of new systems, including the famous “7-4 system.” The so-called “7-4 system” is to implement a new work system that starts at 7 o’clock in the morning and leaves at 4 o’clock in the afternoon. Although this system is limited to the Samsung Group, the daily schedule of work and rest throughout Korea has changed based on this standard. In 2003, Lee Kin-hee took the lead in implementing a 5-day work week in South Korea. This system has gradually become a new living habit of Koreans.
In 2010, the Samsung Group led by Lee Jianxi contributed 20% of South Korea’s GDP. In South Korea, Lee Kin-hee has a special honor. He is called the “Economic President” by South Koreans, while the US “Newsweek” said he is South Korea’s “King behind the scenes.” Taciturn, he doesn’t like to expose to the flash too much, but as long as “he speaks”, “no one dares to say no”, as long as he coughs, the entire South Korea catches a cold, and even South Korean government officials avoid three points. Some people think that without Lee Kin-hee, Samsung can’t imagine now; without Samsung, South Korea’s future would be unimaginable.
Everyone in Samsung knows that their president is calm and low-key, and employees rarely stay in the headquarters. See him in the building. In company meetings, as long as Li Jianxi attends, he sits quietly in the chairperson’s position. However, as long as he speaks, it will always cause high-level commotion. Because of his high position and iron-fisted management style, Li Jianxi, who had not talked much before, exuded a kind of majesty.
In 2010, Guangzhou, China hosted the Asian Games and Li Jianxi was invited to attend. Samsung employees in China specially set up a “chairman reception group” in order to receive Li Jianxi. The work of the group is not to lead the chairman to inspect the business, but to study what Li Jianxi loves to eat and what to play. To this end, they tried hundreds of restaurants in Guangzhou to see which flavor would suit the president’s wishes. At the same time, in order to make Li Jianxi stay comfortable in the hotel, he even re-decorated the hotel!
However, the “emperor” did not accept the generous treatment given to him by Samsung’s subjects. Apart from staying in the hotel, he did not enjoy the delicacies he had tried. On the 60th anniversary of the founding of the Samsung Group, Li Jianxi left only one sentence for Samsung: “For the company, life, property, and even reputation can be discarded.” A short sentence of Li Jianxi made the entire Samsung Group from Asia Finance Hope is seen in the gloom of the crisis, filled with strength.
In 1995, mobile phones produced by Samsung Group were complained by consumers. Faced with this situation, many entrepreneurs will ignore it, and people from other departments will naturally deal with the crisis. However, Li Jianxi was unable to turn a deaf ear. After serious consideration, he called the manager of the marketing department and ordered him to recall all 150,000 mobile phones produced by Samsung, and all costs and losses were borne by the Samsung Group. His courage to recall and burn mobile phones and his awe of quality have impressed many entrepreneurs.
In the 1990s, Li Jianxi invested hundreds of millions of dollars in the automobile industry to build Samsung Motors, trying to enter the world automobile market. However, in the end, due to investment errors, the Samsung Group was facing a great crisis. Lee Kin-hee was devastated by this mistake. He couldn’t make Samsung Group and Samsung employees pay the bill. In order not to affect the entire Samsung Group, he donated 2 billion won of personal property to repay debts. He is therefore respected by Samsung employees, the entire South Korea and the world. American “Fortune” magazine praised him as “CEO who takes responsibility for wrong investment decisions.”
5 “Three Worlds” bumpy
How big is Samsung and how severe is its impact on the entire Korean business?
In Korea, the chaebol leads the entire economy and determines the development of the entire Korean economy. The Samsung Group is one of the oldest and largest chaebols in South Korea. As the leader of the largest chaebol, some people say that Lee Jianxi kidnapped South Korea’s economy. It is no exaggeration to say that the Samsung Group under his name controls South Korea’s economic lifeline..
If Li Jianxi no longer leads Samsung, it is hard to say whether the Samsung Group can achieve the current results. And if the Samsung Group collapses, the Korean economy will be paralyzed.
Samsung has more than 80 subsidiaries and legal entities, and has established branches in nearly 70 regions of the world. The industries involved include electronics, finance, chemistry, machinery, hotels, construction, clothing, amusement parks, and military weapons. Research and development, daily chemical, etc., the total number of employees worldwide has reached more than 300,000. In addition, Samsung Electronics of the Samsung Group is the largest chip manufacturer in Asia and the largest mobile phone manufacturer in the world.
On October 25, the Korean media broke the news that Lee Jianxi, the second-generation head and former chairman of the Samsung Group of South Korea, died in the hospital due to illness at the age of 78.
The curtain call for a generation of strongmen, the scepter of the head of Samsung, was handed over to Li Jianxi’s only son, Li Jae-yong. From Li Bingzhe to Li Jae-yong, this is three The “third life” of the Star King Dynasty. There is an old Chinese saying that the rich is not the third. Will Samsung go to such a bad luck?
On May 6, 2020, Samsung Electronics Vice President Lee Jae-yong apologized at the Samsung Electronics headquarters in Seocho-dong, Seoul, saying that he did not intend to inherit the power of corporate management to his children.
If what is said is true, then the family heritage of the Samsung Empire will come to an end in the third generation. Unlike his father’s image as an iron-fisted entrepreneur, Lee Jae-yong, 51, was once described as an aggressive reformer in the Western world. In South Korea, he is always full of controversy.
In June 2017, Lee Jae-yong experienced a difficult time at the Seoul Central District Court.
He was charged with several crimes, including bribery of 43 billion won (approximately 250 million yuan) to Choi Soon-sil in exchange for Park Geun-hye’s government to support the merger of Samsung C&C, a subsidiary of Samsung Group, and Cheil Woolen Company.
Although he admitted to bribery, LiZai Rong denies that this is political black money: “The president is forced to make capital contributions. I am the victim. Who can refuse the president’s request?”
Two months later, Li Zairong was sentenced to five years in prison. After spending a year in prison, he was released on probation.
In the past two years, the Samsung Group was faltered under the double attack of the “Blast Door” and the “Bribery Door”. Although it achieved record profits in 2017, the group is facing a series of challenges, especially Samsung Electronics. . In 2017, chip manufacturing drove its sales surge, but experts warned that this “money tree” would soon dry up.
On the other hand, due to the ambiguous relationship between the Samsung empire and power and the market-monopoly chaebol system, domestic opposition has grown stronger. As early as the 2017 South Korean election, Moon Jae-in said that without reforming chaebols and large companies, real growth would not be possible. He specifically proposed to focus the reform on the four major groups of Samsung, Hyundai Motor, SK and LG.
6 Can the Samsung Empire create another miracle?
Li Jianxi’s time is over, but the Samsung miracle he created and his dominance in the semiconductor industry continue. In the world, Samsung is still one of the largest mobile phone manufacturers, and it is also the world’s largest consumer electronics company. It is the world’s top-tier in TVs, memory, display panels and other products.
Samsung’s counterattack came from the repeated frantic investments in the semiconductor industry in the era of Li Jianxi. The reason is that South Korea is short of resources and should develop high-value-added cutting-edge industries. At the same time, it also comes from Li Jianxi’s emphasis on talents, breaking hereditary, kinship, and geographic relationships, vigorously promoting young people, reusing skilled people, and breaking the formalist modern management system.
Li Jianxi’s legacy is far more than Samsung, it is also an inspiration to global managers, semiconductor industry practitioners, and especially Chinese companies that are concentrating their efforts to conquer the semiconductor industry.
However, for the current three Xinglai said, is the future promising or uncertain?
The successor, Lee Jae-yong, must be a difficult pathEspecially with his father’s brilliant achievements, whether Lee Jae-yong can show the same wisdom and courage as his father back then will be a great challenge, and it will inevitably affect the future of Samsung and even the entire South Korea.
Reference material:
1, “King fearless: Samsung president Lee Kun-hee and his business empire”, author: Qingyun, China Financial and Economic Publishing House, October 2014
2, “Samsung empire”, author: literary mind, the modern Press, January 2014
3, “Samsung’s Lee Kun-hee and Empire”, author: Bronze, Daily Press, March 2014
4. Time Weekly, “Lee Jianxi passes away, where is the “postmaster” Lee Jae-yong leading the Samsung Empire? “, October 25, 2020