Samsung’s Financial Arms
At 8:00am on September 25, Samsung Group employees’ voices were heard through the in-house broadcast of five of its subsidiaries - Samsung Life Insurance, Samsung Fire Insurance, Samsung Card, Samsung Securities, and Samsung Asset Management. The interviewees said that their top-down meetings are blocking communication among themselves, and that they are distracted by the huge number of reports they are ordered to make. An executive member of Samsung mentioned that the tone of the broadcast was different from previous ones, and it sounded like a warming to top management.
During the broadcast that continued for 15 minutes, old practices and customs they will have to do away with to become global leading financial companies were enumerated in detail. Its purpose was to share information about what is wrong with their way of business and to seek solutions.
According to financial industry sources including the Samsung Group itself, the group’s subsidiaries in the banking sector are reforming their corporate culture to deal with fast-changing business environments as of late. The group’s chairman Lee Kun-hee has pointed out the same thing for years, criticizing financial subsidiaries for their global competitiveness, which is considered to be short of that of Samsung Electronics. The financial subsidiaries are going to send out two more broadcasts concerning their current status within this month. The second one, scheduled for October 16, will present in-depth case studies of global leaders in the financial industry.
“The broadcasts were planned voluntarily by the five subsidiaries,” said a high-ranking official of the group, continuing, “These are to deliver some messages in this era when market environments and policy are changing at a rapid pace.” One of his peers added, “Many of the interviewed employees criticized the companies’ obsession with formality, and I personally felt a lot of things hearing them say that we need to change the way we do our jobs.” New York Life Investment Management CEO John Kim, who is regarded as one of the most successful Korean CEOs in Wall Street, also joined the interview to stress the importance of a fast and transparent decision-making process.
In the mean time, the financial subsidiaries of Samsung Group are suffering from sluggish performance in the current fiscal year. The net profits of Samsung Fire Insurance, Card, and Securities decreased by 24%, 54.2%, and 83.8% each during the period, whereas only Samsung Life Insurance’s net profits slightly increased by 2.3% in the first fiscal month of April to June. Under the circumstances, they are feeling the urgent necessity of cost reduction through corporate culture reform.