hankyoreh

Professor Jang Sae-jin of the KAIST School Business

"The media seems concerned with [Vice Chairman Lee Jae-yong's] managerial absence, but similar cases have been occurring for decades. I don't think it's that damaging to [Samsung] in general."

According to Professor Jang Sae-jin of the graduate school at KAIST College of Business, people shouldn't worry too much about the negative effects of Vice Chairman Lee's absence on Samsung's operations. He says that lessons from history dictate that someone will adopt the role of the Samsung Group's recently dissolved Future Strategy Office, and that the group’s professional management is lining up to help Samsung stay competitive with other firms.

The author of the book "Samsung and Sony" (2008), a compilation of interviews with Samsung's executive directors and staff, Professor Jang has devoted several years to studying domestic companies. He even gave a lecture titled, "Strategy Once Again," at one of Samsung's Wednesday Affiliates Presidents’ Meeting. As he spends half the year lecturing at the National University of Singapore, the Hankyoreh interviewed him by phone on Aug. 27.

-Professor Jang, you mentioned that Samsung needs to expand the role of its professional management.

"When companies both here and abroad do deals with Samsung, they only want to speak with Vice Chairman Lee. That creates an unfavorable environment in which professional management will struggle to grow. If people at Samsung are worried, it's time to stop relying on Lee's network and start offering opportunities to managers with extensive field experience within that network; those are the people who need to become the executive directors."

-You've also declared the necessity for reform in Samsung's board of outside directors. In the company's management reform plan announced this past February, Samsung states that affiliates will be granted greater autonomy centered around the board of directors.

"One of the universal problems among Korean companies is that the owner of the company recruits professors and lawyers as outside directors, but they're not allowed to say anything that might offend the owner in front of the board of directors. Financial institutions with company shares or the National Pension Fund should appoint outside directors or support their right to voice their opinions. The outside directors are supposed to represent the shareholders' interests, but if there are no shareholders backing them up, they have no authority."

-In that case, what do Vice Chairman Lee and his ruling family need to worry about right now?

"Realistically, transitioning to the holding company system that Samsung had planned would have been difficult under the current administration. Now is the time to pay inheritance taxes and bequeath operation of the company to the next heir, but passing down the same imperial system as before is going to be difficult. Eventually, they're going to have to forfeit it altogether. They need to know that if you push things too far [as they have in this case], you'll go to prison, and that poor leadership can drive the company into the ground–which recent events have indicated."

-You've mentioned that while the founding family can retain ownership, they need to divide key leadership roles among professional managers if they're to survive long-term.

"The inheritance of Chaebol management for three to four continuous generations is not beneficial to the Korean economy. The company founder may have been exceptional, but his second and third generation successors are just ordinary people. Handing over control of such a massive corporation to an average person is extremely dangerous. Companies in the US and Europe went through a similar process of dividing up management rights around a hundred years ago. It's now time for us to do the same."

By Lee Wan, staff reporter

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