The First Step Toward Realizing 'New Samsung'
Focus on Organizational Restructuring and Generational Change
With Samsung Electronics Chairman Lee Jae-yong having finally put an end to nearly a decade of legal risks, attention in the business community is now shifting to organizational restructuring and personnel appointments within the Samsung Group. Analysts believe this will mark the first step for Chairman Lee to fully imprint his management style and realize his vision for a 'New Samsung.'
According to industry sources on July 18, Samsung is expected to soon begin in-depth discussions on the direction of its organizational restructuring and personnel changes, with the outlines of these changes likely to emerge as early as the second half of the year. One industry insider commented, "Considering that Chairman Lee took office in October 2022 while still facing legal risks, the true 'Lee Jae-yong era' is only just beginning now."
Until now, Chairman Lee has been viewed as having taken a cautious approach to personnel renewal. Organizational restructuring and appointments have largely favored stability, with key figures from the existing leadership being retained. In contrast, there has been little boldness in generational change. Both business and legal circles have interpreted this as a consequence of the lingering legal risks. Analysts have suggested that, in order to minimize the risks that could arise if Chairman Lee were to be detained and the leadership position left vacant, he had no choice but to rely on familiar personnel. However, now that Chairman Lee is completely free from legal proceedings, he faces no restrictions in his management decisions. It is widely seen that the environment is now set for him to pursue a genuine renewal of personnel.
There is growing speculation that organizational restructuring will be the top priority. The key focus is whether Samsung will rebuild a 'control tower' similar to the former Future Strategy Office. Both inside and outside the company, there has been a persistent call for a control tower capable of responding swiftly to the global business environment and providing clear strategic direction.
However, some believe that the current organizational structure may be maintained as is. At present, Samsung Electronics has a Business Support Task Force and a Management Diagnosis Office, which share the functions of a control tower. If Chairman Lee determines that these existing structures are sufficient to fulfill the control tower role, he may opt not to take the risk of creating a new organization. An industry insider noted, "Because the Future Strategy Office was at the center of the 2016 political scandal, it is unlikely to be revived in name or in its previous form any time soon."
If organizational restructuring takes place earlier than usual, the annual executive reshuffle?typically held between late November and early December?could also be moved up. Attention is focused on whether new faces will be promoted to usher in a generational shift. Personnel changes may also be made to further strengthen Chairman Lee's influence over management. Currently, the heads of Samsung Electronics' major business divisions, who serve as de facto CEOs, are leading the company. However, with the legal shackles now removed and previous management constraints lifted, Chairman Lee may seek to tighten his grip on business operations and fully establish a 'founder-led management' style with himself at the forefront.
Another point of interest is whether Chairman Lee will return as a registered director. He was appointed as a registered director in October 2016 but stepped down in October 2019 following the political scandal, and has not returned to the position for six years. If he does return, it would signal his commitment to responsible management and could serve as a foundation for management stability. Registered directors participate in the board of directors, which is the company's legal decision-making body, and have the authority to directly explain management issues at the general shareholders' meeting.
Currently, the internal directors serving on Samsung's board are TM Roh, President and Head of the Device Experience (DX) Division; Jeon Younghyun, Head of the Device Solutions (DS) Division; and Song Jaehyuk, Chief Technology Officer (CTO) of the DS Division?three in total. It is reported that even if Chairman Lee were to return as a registered director immediately, there would be no issues with the company's articles of incorporation. However, there are also expectations that Chairman Lee will not rush his return to the board. With a pressing need for a turnaround in the semiconductor business and other operations in the second half of the year, there are concerns that an early return could worsen internal sentiment. Accordingly, some analysts believe that the most likely scenario is for Chairman Lee to focus on improving performance and stabilizing the company in the second half, and then return as a registered director ahead of the shareholders' meeting in March next year.
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