Since Lee took control of Samsung in 1987, sales have surged to $179 billion last year, making it the world’s largest electronics company by revenue. That makes Samsung Electronics the world’s largest electronics company by revenue. For all its global reach, though, the company remains opaque. We all know the story of Steve Jobs and Apple (AAPL), Akio Morita and Sony (SNE). But Samsung and Lee Kun Hee? People may bring up the South Korean government’s support of local champions and access to easy capital, but within the company it all goes back to Chairman Lee and the Frankfurt Room.
It doesn’t look like much: early 1990s vintage décor and a large table with a fake flower centerpiece. But the Frankfurt Room is to Changjo Kwan as the Clementine Chapel is to St. Peter’s Basilica: an extra-special place inside an already special place. Photography is forbidden; people whisper when inside. It’s a meticulous recreation of the drab conference room in the German hotel where, in 1993, Chairman Lee gathered his lieutenants and laid out a plan to transform Samsung, then a second-tier TV manufacturer, into the biggest, most powerful electronics manufacturer on earth. It would require going from a high-volume, low-quality manufacturer to a high-quality one, even if that meant sacrificing sales. It would mean looking past the borders of South Korea and taking on the world.
Photograph by Tony Law for Bloomberg BusinessweekSamsung’s Human Resources Development Center
More than 50,000 employees pass through Changjo Kwan and its sister facilities in a given year. In sessions that last anywhere from a few days to several months, they are inculcated in all things Samsung: They learn about the three P’s (products, process, and people); they learn about “global management” so that Samsung can expand into new markets; some employees go through the exercise of making kimchi together, to learn about teamwork and Korean culture.
From businessweek.com
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