Samsung wants to be more like a start-up

The Korean electronics giant says it wants to get lean and nimble. Good luck with that.

by Jack Torrance
Last Updated: 24 May 2016

Samsung is the world’s largest smartphone manufacturer but it has a problem. In January it admitted that it will struggle to maintain profits this year after sales of its phones dropped off in 2015. While Apple has similar challenges it at least benefits from its cultishly popular brand, and Samsung has cheaper Chinese rivals Huawei and Xiaomi nipping at its heels.

But don’t panic, Seoul’s finest have got a solution. They’re going to turn the electronics giant, which employs 300,000 people and generated revenues of 200 trillion won (£121bn) last year into a start-up. ‘We aim to reform our internal culture, execute as quickly as a start-up company and push towards open communication and continuously innovate,’ the company said in a statement, according to Reuters. 

It’s not the first corporate giant that has sought to emulate its smaller competitors, and with good reason. They can adapt more quickly to changes in the market, because their lack of bureaucracy makes it easier to change things. Their costs are lower. And their workers, free from the chains of rigid corporate culture, are often happier and more productive as a consequence.

So how does Samsung plan to bring about such a shift? Its executives ‘will sign a pledge to move away from a top-down culture and towards a working environment that fosters open dialogue,’ says Reuters. So far so trite. More significantly it will reduce the number of levels in its corporate hierarchy (bad news, middle management) and hold more regular discussions between executives and employees.

Those are sensible steps, but even a determined leadership team will struggle to genuinely change the culture of an organisation of 300,000 people. Samsung will need to be careful its attempts to become more nimble don’t become just another bit of red tape for staff to deal with. More conversations between workers and management will only be worthwhile if they inspire bosses to act. And if the trendy start-up language is just cover for impending job cuts then the impact on its company culture is unlikely to be a positive one. 

Other measures the company has taken include relaxing dress codes, introducing flexible working and reducing weekend hours. All of these things could help Samsung become a more nimble, innovative company, but they are unlikely to be enough on their own.

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