The Korean people see both good and bad in Samsung. It is seen in a positive light for being a world-class company that represents Korea and the company young people most want to work for. On the other hand there is a dark side to the conglomerate, such as its feudal management, the way the owning family cuts corners in passing on management rights to the next generation, the way it is becoming a power unto itself, and its refusal to allow its employees to form a union. Now Samsung is trying to rid itself of that image.
In a written statement to the country, the Samsung group apologized for issues such as the problems with the way it dealt with convertible bonds from Everland, presidential campaign funds, and the "X File," and it announced that the chairman Lee Kun Hee would be donating W800 billion from the Lee family's fortune for social concerns. It went on to say the conglomerate will withdraw its lawsuits against the government regarding the Fair Trade Law and the gift tax, and that it will making management more transparent and producing plans for supporting mid-sized companies and other companies that it works with.
That is a step in the right direction. The statement says that Lee feels the group has neglected to be responsive to the hopes and expectations of the people, and so you can see he is agonizing over what to do. You would like to believe that the motive behind it is not to get Samsung and Lee's family out of a difficult situation. It also might be worth hoping that Korean conglomerates are now going to follow the same course of action chosen by early American jaebeol like the Rockefeller family, which was criticized for tyrannical oligopoly and anti-union tactics before eventually making contributions to society. We hope it is the beginning of an evolution for Korean conglomerates.
However, it also must be realized that some observers are very unimpressed and say that Samsung is only just beginning to show that it is willing to change, having always held out no matter how controversial things became. Everyone in the country earnestly wants to see Samsung become a company that truly stands together with the people, and hoped that when it was said the group would make a major announcement after Lee's return it would be the end of the controversies. One does not want to try and spoil the party, but you still feel the need to ask questions.
The problem with Samsung originates in a management structure that uses its financial subsidiaries, hereditary transmission of management rights through illegal gifts, and the way it is a power unto itself, something stated well in the common expression "Republic of Samsung." This time around as well, it has not demonstrated sincere introspection or shown any clear proposals. It tried hard to avoid the issues of the way it rules the group through Everland and Samsung Life or its policy of not permitting unions. Lee's son Jae Yong received more than W1 trillion in fraudulent gains through less-than-legal gifts, and the figure gets really astronomical if you count the value of the basis for inheriting the group's management rights. How will the people view leaving the results of illegal activity untouched while contributing only part of what came from it for social concerns?
Instead of just apologizing, there should have been a confession about the truth behind its wrongs from the past, beginning with the "X File" affair. It would of course be hard to come completely clean, but it has to be able to satisfy society. Samsung remains limited by its desire to avoid the fundamental problems and not let go of its past.
Its announcement is still a major first step, and it has made the country expect greater things from the conglomerate. One cannot have one's fill after the first spoonful. We would like to see Samsung really look like it is changing. If the reason it did not disclose any plans for dealing with the fundamental issues was because it has not had the time to come up with any, then it still has time to do so. It needs to find some profoundly different approaches and, as the statement said, work together with mid-sized companies, partner companies, and its employees. It will gradually rid itself of its negative image it does.
The Hankyoreh, 8 February 2006.
[Translations by Seoul Selection]
[Editorial] Hoping for More From Samsung |
