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Organizational Structure and Design Essay

1.1 Introduction

Samsung India Electronics Ltd is a subsidiary of Samsung Electronics Corporation headquartered in Seoul, Korea. The company was incorporated in the year 1995. The company is having their head office at Delhi and branch office at 16 locations all over the India. Their manufacturing facilities are located at Noida in Uttar Pradesh and Sriperumbudur in Chennai. The company is having two R&D centres in India, at Bangalore and Noida. Both the R&D centres are involved in cutting edge research and development.

The company is dealing in the business of IT, Consumer Electronics and Household businesses. They provide high technology consumer electronics. Their products in India are colour television, colour monitors, refrigerators, washing machines, mobile phones, microwave ovens etc. The company is the first in India to introduce fuzzy logic based washing machines, silver nano refrigerator and flat screen TVs. Samsung phones support five Indian languages, namely Hindi, Marathi, Bangla, Punjabi and Tamil.

1.2 Organization Strategy

Strategically the electronics industry was considered suitable for countries with poor natural endowment and high skilled labour like Korea. This industry required labour intensity, knowledge intensity but low input requirements of energy and raw materials. Samsung electronics has not only utilised status-quo resources but also developed dynamic capabilities as it rose to the top. Aggressive and risk-taking investment behaviour in search of entrepreneurial rent and the effective policy of managing technology development contributed to the extraordinary achievement of Samsung Electronics.

The company’s remarkable transformation over the last decade or so can shed light on how a firm’s dynamic capabilities, the ability to improve its O-advantages by reconfiguration, transformation and learning, contribute to its home country’s idiosyncratic development path. The company transformed itself from a sub-contractor to a manufacturer to a leading creator of many electronic components by harnessing a talented team. Samsung took quite a few risks initially to achieve its goals, it kept its winning team refreshed by constant vigilance and talent renewal.

Samsung employees put leadership ahead of excellent personal development courses and structures which Samsung Electronics evolved in the 2000s. The same quality could be seen in the company’s Suwon campus. That leadership came primarily from Yun Jong Yong and Lee Kun-hee above him. There was full inter relationship between the Samsung group and Samsung electronics which also lead to a coordinated and smooth functioning of Samsung.

1.3 Organization Structure

Samsung Electronics organizes its businesses according to its different characteristics in technology, markets and consumers as either Digital Media & Communications (DMC) or Device Solutions (DS) division, strengthening their independent operating structure. DMC is grouped into Consumer Electronics (CE) and IT & Mobile Communications (IM) divisions. The CE division took charge of the visual display business department and home appliances department. The IM division is in charge of managing wireless businesses, IT Solutions, Network business, digital imaging displays and the Media Solution Center.

This restructuring reflects changes which were made to the workforce with the hiring of soft power experts which has become more important than ever in the ‘Smart’ age. They have already announced their intention to make a paradigm shift by becoming a soft driven company and established a ‘Software’ center in order to increase their software capacity until it’s on a par with their world renowned manufacturing.

Changes in the Device Solutions (DS) division also took place including expansion of the organizations in charge of software, controller and solution development to ensure separate teams for each. The expansion of the software related organizations was done to realize Samsung Electronics vision of creating new values and experiences by combining Samsung’s existing strength in hardware design with optimized software and an emotionally appealing user interface.

Samsung Electronics also expanded the organization in charge of bio and medical device business and expanded the Bio Lab at Samsung Technology Research Center into the Bio Research Center. They also hired bio material experts to strengthen their research in this area and increased support for bio similar and bio medical research.

Organization Chart

Refer Exhibit 1 for detailed description of Samsung’s organizational chart with respect to Samsung mobile division of India.

1.4 Organization Culture

It has become increasingly important for employees to have vested stake in the growth potential of its company. People expect a participatory work environment where they can feel a sense of dignity, pride, and ownership of the organization’s vision. Samsung Electronics strives to build a creative organizational culture, and acknowledges that the investment they make in strengthening the core competencies of their employees will have a direct impact on their competitiveness. They actively promote a flexible organizational culture that allows employees to pursue a healthy work-life balance, in a dynamic, creative and challenging work environment that is not risk-averse. As an international company they embrace individuals with different background and abilities.

Work and Life Balance through Work Smart:

Establishing a Work Culture that Encourages Learning and Development:

Samsung Electronics has established a Creative Development Research Institute System to provide employees with opportunities to pursue creative new ideas that take full advantage of their talents and professional passions in a way that encourages taking risks. This new initiative encourages employees to be more entrepreneurial in developing creative ideas that can become new businesses. Once an employee’s plan is accepted, they may concentrate on the project as a member of a task force for up to one year. During this period, they will be free from their usual responsibilities and may receive a dedicated work space, development expenses and necessary equipment as appropriate. Successful outcomes are encouraged through an incentive program; however they are not subject to penalty if they don’t achieve their goals.

Some of the other key-features of Samsung’s culture are:
* Talent based recruiting of Software and Design experts
* Diversity Management
* Employees Health and Safety
* Integrity Management
* Increasing Social Contribution

1.5 Technology Employed:

The organization’s core technology is manufacturing which consists of raw material inputs, a transformation work process that changes and adds value to the raw material and produces the ultimate product or service output that is sold to the consumers in the environment.

Core Technology

On the other hand, Samsung Electronics has also a department work process that is important to the organization but is not directly related to its primary mission and that we call as non-core technology. For Samsung Electronics, that major non-core technology is Research and Development (R&D) which transforms ideas into new products. Some of the other departments of non-core technology are Human Resources, Accounting, and Marketing etc.

Refer Exhibit 2 for Samsung’s Mobile division R&D office structure in India.

1.6 Organization Size:

Samsung Electronics has a total of 196 subsidiaries around the world. As of the end of 2011, Samsung Electronics’ total employment stood at 101,973 working in Korea and 119,753 outside of Korea, with the overseas workforce surpassing the domestic workforce for the first time in the history of Samsung Electronics. Currently, Samsung’s total employment is more than 344,000 employees globally.


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