[40 Years Since the Tokyo Declaration]⑤ What Are the "Tokyo Declaration" and the "New Management Declaration"?

[Asia Economy, Reporter Park Sunmi] Forty years ago, when Samsung Electronics founder Lee Byung-chul announced his decision to enter the semiconductor business in the “Tokyo Declaration,” there was strong public opposition. Critics argued, “It will fail within three years,” and, “It’s risky to pursue cutting-edge technology when we can’t even make TVs properly.” The skepticism and backlash were intense.

Such doubts were understandable, as at the time, Korea was barely capable of producing large-scale integration (LSI) chips for home appliances, let alone very large-scale integration (VLSI) circuits. The semiconductor business was considered feasible only for countries with a population over 100 million and a GNP (Gross National Product) exceeding $10,000 per capita.

However, Chairman Lee judged that the semiconductor business aligned with his management philosophy of “business patriotism.” This philosophy means contributing to and serving the nation, society, and ultimately humanity through business. Believing that the semiconductor business could change the nation’s future and contribute to the “national interest and people’s welfare,” he chose to press forward.

While the decision was difficult, the large-scale investment was executed swiftly and decisively.

With the 1983 announcement of its entry into semiconductors, Samsung chose DRAM, a memory product suitable for mass production, as its first venture. In May of that year, Samsung began developing the 64K DRAM, which was the leading product in the global DRAM market at the time. By December 1, Samsung succeeded in developing Korea’s first 64K DRAM. This achievement narrowed the technology gap with the United States and Japan from over ten years to about four years in one leap. On May 17, 1984, just over a year after the Tokyo Declaration, Samsung Semiconductor held the completion ceremony for its first Giheung plant. Korea became the world’s third semiconductor-producing country, and the first domestically.

Ten years after Chairman Lee’s “Tokyo Declaration,” the late Chairman Lee Kun-hee once again changed the fate of Samsung Electronics with the “New Management Declaration.” The trigger for this declaration was the “Fukuda Report.” The Fukuda Report, written by Tamio Fukuda, a Japanese design advisor at Samsung Electronics at the time, pointed out the reality that Samsung Electronics was busy copying others.

In June 1993, Chairman Lee read the Fukuda Report on a flight to Frankfurt and was so shocked that he resolved to undertake a sweeping transformation. Upon arriving in Frankfurt, he gathered hundreds of executives from around the world and declared the New Management initiative, famously stating, “Change everything except your wife and children.”

The core of the New Management philosophy is: ▲ to have a clear understanding of reality and self-reflection, ▲ to possess a strong will to change, ▲ to practice quality-oriented management, and ▲ to become a world-class company that contributes to humanity by providing products and services with the highest quality and competitiveness. The Frankfurt New Management Declaration sparked a sense of crisis within Samsung, leading to internal reform efforts and, in practice, sweeping changes across all areas of management.