| Samsung Electronics Vice Chairman Lee Jae-yong, left, arrives with his children at the memorial hall at Samsung Medical Center in Seoul where a memorial alter is set up for the group's late Chairman Lee Kun-hee, Sunday. Yonhap |
By Baek Byung-yeul, Kim Yoo-chul
Samsung leader Lee Jae-yong, also known as Jay Y. Lee in English, is already putting his grip on the entire conglomerate even without being named chairman. It's unknown whether the junior Lee will take up the chairman title.
In terms of the title, at least, it doesn't appear to matter because Samsung Electronics Vice Chairman Lee has been quite successful in terms of both external and quality-driven corporate growth, striking some big overseas acquisitions and addressing key legal issues such as the closure of its blockbuster patent battle with Apple.
Lee, who has an undergraduate degree from Seoul National University, a master's from Japan's Keio University, and studied at Harvard Business School, has been active in exploring future business models and ways to further strengthen businesses that Samsung already has a competitive advantage in ― memory semiconductors, smartphones and displays.
But analysts say the point is that he is asked to pursue different pathways to help the group advance to the "next level." This does not mean that Samsung should focus on seeking external growth, as today's technology industry is seeing visible signs of collaboration and a focus on improving overall business performances, in addition to innovation and corporate sustainability.
"Under the senior Lee's leadership, Samsung rose as a top-level global technology brand. While the senior Lee had been consistent in delivering the group's vision focused on promoting the best technology, the new leader's task is how to articulate and fine-tune its already-gotten strengths in accordance with a long-term strategy. We will move forward with it and I am quite confident Vice Chairman Lee is acknowledged for this," a senior Samsung executive told The Korea Times, Monday.
Given the vice chairman's rich global network ― he is known to have a constructive relationship with key financiers and those in the tech industry including Tim Cook at Apple ― Lee is tasked with presenting a detailed corporate vision on how Samsung will advance with "greater openness."
Another Samsung executive said: "One thing is Samsung should find customized ways to better protect its ownership structure while soothing some investors' concerns that its business and succession plans are separate issues. This also means Vice Chairman Lee must make sure Samsung's core businesses stay afloat despite succession-related issues. Under the new era, lots of relevant procedural steps will be underway. Most of them will be focused on improving corporate governance and transparency." Lee will have to pay billions of dollars in inheritance taxes on the occasion of his father's death.
From a business standpoint, the two Samsung executives said more acquisitions will be pursued and such forthcoming deals will focus on incorporating Samsung's strengths with other technologies which are promising and lucrative.
Under Vice Chairman Lee, Samsung participated in more than 10 acquisitions including buying LoopPay and other Google-style small deals. Its ambitious acquisition of Harman was his decision, as a means to be part of the prevailing new order in the global tech industry that is focused on all things automotive.
Given Samsung's huge contribution to the country's GDP and employment, Samsung has been a major target for politicians. Various legal risks have hit Samsung, and Lee must also address his own legal risks here.
President Moon Jae-in has visited Samsung's manufacturing facilities twice. The rare events came after Japan delisted Korea from its list of most-trusted trading partners. Tokyo's move followed it asking Moon's government to overturn a Korean Supreme Court ruling that ordered Japanese companies to compensate surviving South Korean victims of wartime forced labor before and during World War II.
Do business and politics mix?
This is a complicated question for Samsung. But given the tech giant's significance on multiple fronts, it is not an exception to other companies, most of which are facing an increasingly polarized political climate.
Specifically, understanding the outstanding risks and possible rewards of taking a stance on political issues could be difficult, if not impossible. However, Samsung has been asked to respond to various political issues in Korea. "This is the unique culture that all companies in South Korea are facing," said a Samsung watcher.
"Because Samsung is a Korean company, it has to improve communications with a lot of interested parties. Sometimes but not all the time, Samsung needs to outline strategies to help navigate the complex relationship with the political circle based upon its belief that the relationship will be positive for the national interest."
The senior Lee received a presidential pardon from the former President Lee Myung-bak so that he could help the country with the bid to host the 2018 Winter Olympics in PyeongChang. Given President Moon's "engagement-centric policy" toward the North, the junior Lee "may have a significant role" in helping him win the administration's ambitious bid to win the 2032 Summer Olympics.
Lee's late father was a member of the International Olympic Committee (IOC) and the vice chairman recently returned from a trip to the Netherlands and Switzerland. Upon his arrival at Gimpo International Airport, he remained tight-lipped over his detailed whereabouts and meetings in Switzerland, home of the IOC.