On October 25, according to Yonhap News Agency, South Korea’s Samsung President Lee Jianxi passed away at the age of 78. Prior to this, Li Jianxi had been hospitalized for more than 6 years due to heart disease.
“Chairman Lee is a true visionary. He transformed Samsung from a local company into a world-leading innovator and industrial power.” Samsung said in a statement, “His legacy will be eternal.”
Lee Jianxi has been the chairman of the Samsung Group since 1987. During his nearly 30 years of leadership, Samsung Electronics has become a global brand and is by far the largest family-controlled corporate group. The company’s overall turnover is equivalent to that of South Korea. One-fifth of the gross domestic product.
Li Jianxi has 4 children: his only son Li Zairong and his three daughters Li Fuzhen, Li Xuxian and Li Yinxin. Among them, Lee Jae-yong is the established heir. He has served as the vice chairman of Samsung Electronics in December 2012, but the litigation dispute has not stopped so far.
On September 1 this year, Li Zayong was sued by South Korean prosecutors not to detain him for alleged accounting fraud and stock price manipulation. In 2017, Lee Jae-yong was sentenced to 2 years and 6 months in imprisonment, suspended for 4 years, and released in court in the second instance for allegedly bribing Park Geun-hye to seek inheritance rights to the Samsung Group.
A generation of legends has fallen, who will succeed the empire? Where does Samsung’s fate go?
From “Unrecognized Announcer” to “25 Minute Enthronement”
The predecessor of Samsung was the Samsung Trading Company established in 1938, engaged in freight business, and its founder Li Bingzhe. Li Bingzhe has three boys and five girls. Li Mengxi is the eldest son and Li Jianxi is the third son.
Due to the Korean rights inheritance tradition of “passing on the long and not passing on to the protagonist”, Li Jianxi was not the most ideal successor candidate in Li Bingzhe’s mind at the beginning. Li Bingzhe had passed on the eldest son Li Mengxi 20 years before Li Jianxi took over.
After returning from school, Li Jianxi’s first job was as an announcer at a TV station, introducing Samsung products to the audience. He did not become the vice chairman of Samsung C&T until he was 34 years old. He worked for 10 years.
In 1966, a “saccharin smuggling door” occurred at Samsung, Li Bingzhe resigned as the chairman of Samsung, and his second son Li Changxi was arrested and imprisoned. After Li Mengxi came to power, he began to squeeze out his father’s cronies, and Li Changxi launched a battle for power against Li Bingzhe after he was released from prison. Li Bingzhe was furious, imprisoned Li Changxi, and sent him to a mental hospital under the guise of having a delusional disorder.
Li Jianxi became a survivor of the family power struggle. In 1969, Li Jianxi was only 27 years old, and Li Bingzhe made a will and confirmed Li Jianxi as the successor of Samsung Group.
In fact, Li Jianxi’s ability is not weaker than the two brothers, he has a forward strategic vision. In 1974, Li Jianxi suggested that Samsung enter the semiconductor industry, but his father refused. Then he used his personal property to acquire a 50% stake in a South Korean semiconductor company, making it the predecessor of Samsung’s semiconductor division. In 1983, Li Bingzhe finally agreed with Li Jianxi’s judgment and began to continue to invest in the semiconductor business, and this became Samsung’s myth in the semiconductor field since then.
In 1987, 25 minutes after Li Bingzhe’s death, the board of directors unanimously approved Li Jianxi’s decision to become the chairman of Samsung, and Samsung entered the era of Li Jianxi. Soon after becoming president, Li Jianxi announced ambitiously that he would develop Samsung into a world-class company in the 21st century.
Except for his wife and children, everything else must change
In fact, the Samsung that Lee Kin Hee took over from his father is only a second-rate company, and its influence on the Korean economy is not as great as it is now. Due to excessive expansion, Samsung’s debt ratio was as high as 300%.
“Change” or “die”, Li Jianxi chose the former. In the second year of serving as the president, at the celebration meeting to commemorate the company’s 50th anniversary, Li Jianxi set up the banner of “new management” with the content of enhancing product quality. However, the veterans of the Samsung family entrepreneurs gathered at the time, and the inertial thinking was difficult to break, and Li Jianxi’s shouts were not widely echoed.
The real change began in 1993. In Los Angeles, USA, Li Jianxi led many senior Samsung managers to inspect the local large department stores and found that Samsung products were very cheap, but rarely visited. Although brand-name products such as Sony are more expensive than Samsung, there are many buyers. Li Jianxi also specially sent 1,000 US dollars to each manager to buy the most popular Sony products and compare them with Samsung products one by one.
After returning to China, Li Jianxi wrote the book “Samsung’s New Management” and put forward the slogan “Changes start with me”, admonishing Samsung people to create the best products and services based on talents and technology, hoping to change the prevailing ones at the time. The idea of taking quantity as the core.
“We are only 7 years away from the 21st century. How many changes will take place in the world at the turn of the century, and how Samsung will stand in the world in the 21st century.” On June 7, 1993, Li Jianxi proposed “New Management” in Frankfurt, Germany. The declaration sounded the clarion call of “new business” with the momentum of breaking the boat.
“Except for his wife and children, everything else must change.” From the slogan Li Jianxi put forward to the managers in the company, it can be seen that Li Jianxi is eager to change and has great courage.
Since the Frankfurt Conference, Li Jianxi has implemented a series of reforms to Samsung, which has completely squeezed Samsung into the world’s first-class enterprises. The core philosophy of focusing on technology, product quality, and talent has been influencing today.
For example, Samsung spends 7% of its sales on technology research and development and product design every year, focusing on technological innovation and the use of talents. After a Samsung mobile phone was complained by a customer, Li Jianxi led his employees to smash a $50 million stock mobile phone to pieces and burn it in a fire.
Lee Jianxi once said: “Samsung can have today, I think it is backed by technology. In the early days, let alone technical guidance, it was not easy to even spend money on technology. In addition, Korean operators at the time always believed that technology Workers are just craftsmen and don’t pay much attention to them. I had no choice but to stand up and sincerely ask Japanese or American technical workers little by little like I treat customers. As long as I have time, I will go to the advanced The country learns, asks technical personnel for advice, and then teaches it to our technical personnel.”
In 2012, the Samsung Group’s total sales reached 245.7 billion U.S. dollars, creating about 20% of South Korea’s GDP output value. The revenue of Samsung Electronics, a listed company under the Samsung Group alone, has reached 190 billion U.S. dollars, which is equivalent to the combined revenue of Microsoft, Google, Amazon and Facebook.
Mistakes and Storms
There is no perfect world. After Li Jianxi took power, Samsung also faced a crisis, and Li Jianxi had made wrong decisions.
Li Jianxi is an avid car enthusiast. In the late 1990s, when the supply of automobiles in South Korea exceeded demand, Li Jianxi announced his entry into the automobile industry. He spent US$3 billion to build an automobile factory with an annual output of 240,000 vehicles in Busan.
The final result is that Samsung Motor only sold less than 50,000 vehicles, most of which were sold to employees. To this end, Li Jianxi donated 2 billion won of personal property and assumed almost all the responsibility for the failure of investment in the automotive field.
The bigger crisis that Lee Jianxi and Samsung led by him are suspected of bribery, illegal transfer of business rights and tax evasion. Samsung Group was exposed to two economic scandals in September 2005. One of them, Lee Jianxi, was suspected of being involved in a political donation case that occurred during the 1997 South Korean presidential election.
A few months later, Samsung Group announced that it would donate US$1 billion “to society”, with the main donation coming from the Lee Kin Hee family property. After Kim Young Sam came to power, Li Jianxi received a special pardon from the president.
In November 2007, the former head of legal affairs of Samsung Group Jin Yongzhe broke the news in a live TV broadcast that all Samsung subsidiaries opened bribery accounts under the names of senior executives and said that there are more than 1,000 such accounts with a total amount of nearly 200 million. Dollar. The special inspection team of the Korean Prosecutors Office launched a large-scale special inspection of the Samsung Group.
“I will leave with all my past mistakes.” On April 17, 2008, five days before the official announcement of the indictment, the 66-year-old Li Jianxi read the “Apology and Resignation Statement to the Citizens” in front of TV cameras. , Announced his resignation as the president of Samsung Group and applied to the International Olympic Committee to suspend his membership.
Li Jianxi was pardoned again. South Korean President Lee Myung-bak officially announced the pardon of Li Jianxi at the State Council, saying that the main reason was that he was trying to help South Korea bid for the 2018 Winter Olympics through the pardon of Li Jianxi.
In 2010, Li Jianxi came back again, but “Lian Po is old”, Samsung’s power center gradually shifted to its only son Li Zaiyong. In December 2012, Lee Kin-hee promoted Lee Jae-yong to vice president of Samsung Electronics and finalized his successor. This appointment marks Lee Jae-yong one step closer to taking power of the Samsung Empire.
But whether Lee Jae-yong can successfully take over and continue to make Samsung bigger and stronger, I am afraid this question needs to be put on a question mark. Today, Li Jianxi has passed away due to illness, a generation of emperors have fallen, and the fate of the huge empire of Samsung has become confusing.
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