Samsung Establishes 'Management Diagnosis Office'... Interpretation of 'Control Tower Revival' with Choi Yoon-ho's Forward Deployment

Created Management Diagnosis Office for Affiliate Diagnosis and Consulting
Former Members of Business Support TF and Future Strategy Office Making Progress
Internal Calls for a "Control Tower"

Samsung's research organization, Samsung Global Research (formerly Samsung Economic Research Institute), has decided to establish a president-level organization called the 'Management Diagnosis Office' to diagnose and consult on the management of affiliated companies. The business community interprets this as a signal for the restoration of the group's control tower. This interpretation has gained more weight especially with the appointment of Choi Yoon-ho, CEO of Samsung SDI and a former member of the Future Strategy Office, as the new head of the Management Diagnosis Office.

Choi Yoon-ho, newly appointed Head of Management Diagnosis Office at Samsung Global Research. Photo by Samsung SDI

On the 28th, Samsung Global Research announced a personnel reshuffle at the president level that included this change. The Management Diagnosis Office is explained to have the main mission of strengthening the business competitiveness of affiliated companies and securing sound management to overcome uncertain business environments and lay the foundation for a new leap forward. In this regard, there is also an evaluation that its role is very similar to that of the Samsung Group Future Strategy Office, which was disbanded in February 2017.

There is much analysis that Choi’s appointment as head of the Management Diagnosis Office carries special implications. Born in 1963, Choi Yoon-ho served as head of the Europe management support team at Samsung Electronics, worked in the Future Strategy Office’s strategy team, business support TF, and was head of Samsung Electronics’ management support office before moving to become CEO of Samsung SDI at the end of 2021. He is credited with laying the foundation for the growth of the battery business despite difficult internal and external environments. He is a financial expert with global business operation capabilities and is a key executive who enjoys strong trust from Samsung Electronics Chairman Lee Jae-yong.

Along with the establishment of the Management Diagnosis Office, the company has strengthened the organization by replacing key personnel in some departments currently performing the functions of the Future Strategy Office with personnel from the former Future Strategy Office. Since the disbandment of the Future Strategy Office, Samsung has been operating three task forces (TFs) by business sector: business support centered on electronics affiliates (Samsung Electronics), financial competitiveness enhancement (Samsung Life Insurance), and design, procurement, and construction (EPC) competitiveness enhancement (Samsung C&T).

Among these, the Samsung Electronics Business Support TF has been continuously led by Vice Chairman Jung Hyun-ho since its launch, and recently, Park Hak-gyu, who was serving as Samsung Electronics’ Chief Financial Officer (CFO), newly joined. Additionally, Kim Yong-kwan, who moved to Samsung Medison after the disbandment of the Future Strategy Office, returned to the Business Support TF in May and was promoted to president in this personnel reshuffle, taking charge of management strategy for the Device Solutions (DS) division.

Within the company, voices calling for the revival of the control tower have been continuously raised as the company faces a crisis. Last month, Lee Chan-hee, chairman of the Samsung Compliance Committee, emphasized in the foreword of the ‘Samsung Compliance Committee 2023 Annual Report’ that Samsung currently needs “the rebuilding of a control tower for selection and concentration in management decisions, the removal of barriers that hinder smooth communication within the organization, and innovative governance improvements for responsible management such as the return of the CEO as a registered executive.”