By Lee Kun-hee
Professor Emeritus, College of Business Administration, Ewha Womans University

Lee Byung-chull, the late founder of the Samsung Group who would later take on the pseudonym Hoam, was born Feb. 12, 1910, in Uiryeong, South Gyeongsang Province, and died at the age of 78 in Nov. 19, 1987.

At the 100th anniversary of his birth, Hoam's business philosophy, which led Samsung's emergence as the kingpin of Korea Inc. and among the world's truly great global companies, is once again garnering rapt attention from every part of the business circle and society. All this reminds me of my recent visit to Lee's birthplace on Feb. 23.

The Korean Academy of Business Historians, on a suggestion by former Prime Minister Lee Hyun-jae, now chairman of the Hoam Foundation, had announced a study reviewing the life and achievements of the late Samsung founder in November, 1997, around the 10th anniversary of his death. Lee's influence in the shaping of the nation's economy and development of the modern Korean enterprises can't possibly be exaggerated.

The late Lee had always been regarded highly for his business acumen and industriousness both here and abroad. Lee was named to Babson College's Academy of Distinguished Entrepreneurs, regarded as an entrepreneurship ''hall of fame,'' in 1979. Since its inception in 1978, the academy has been recognizing and honoring entrepreneurs who have contributed to the development of free enterprise throughout the world.

In honoring Lee, then-Babson College President Emeritus Ralph Sorenson commented that the Samsung founder always found a challenge in committing to new businesses when their market potential appeared to be at the lowest and the business environment was at its worst.

Lee's relentless pioneering spirit, and the variety of business achievements that were enabled by it, was his greatest contribution to society, Sorenson said.

Lee also received an honorary degree in business administration from Boston College in April 2, 1982, which the university designated as ''B.C. Lee Day.''

Once in a conversation with former General Electric Chairman Jack Welch, Lee summarized his career as a business executive as ''50 years of relentless effort to improve productivity, and training people and putting them in the right place to maximize their talent, instead of having them work mechanically.''

Hoam's Business Philosophy

Samsung Group has a distinctive business philosophy, as well as what it calls the ''Samsung spirit,'' that provides the basic approach, rules and ethical standards in the way the conglomerate manages its business.

Samsung's first business philosophy was first put into words in 1973, when the group cited the three principles of ''engaging in business for national service,'' ''man and talent first'' and ''pursuit of logic and reality.''

The Samsung spirit, announced in 1984, consists of five principles ― entrepreneurship, morality, pursuit of best quality, perfection and coexistence and mutual prospering of businesses.

Lee started his first business at the age of 26 in 1936. The country's liberation from Japanese colonial rule in 1945, when Lee was 36, was an experience that had him dedicated to a purpose of contributing to build a stronger nation through success in business. He later said this faith was strengthened after his personal conversations with Syngman Rhee, the first president of South Korea.

The turbulence after liberation had cemented Lee's beliefs that the most patriotic thing a business man could do was ''to establish national wealth to lay the foundation for a strong state,'' he later recalled.

Engaging in business for national service: The basic idea of ''saeobboguk,'' or the creation of a stronger nation through business prosperity, is based on the hiring and training of people and improving productivity.

The pursuit of this goal should be based on a mindset of working for the benefit of the state, the people, and eventually, mankind, Lee said. The social responsibility of a company is to contribute to the basic operation of the state through its tax payment, hiring and paying employees and sharing profits with its shareholders. The sustainment and growth of a company, therefore, is critical to national interest.

Based on this philosophy, Lee was always aware of finding and investing into businesses his country required the most and rationally managing them to fulfill this social responsibility.

After the country's liberation from Japanese rule, Lee established Samsung Mulsan, the group's international trading operation that is today merged under Samsung C&T.

He established Cheil Jedang, then a sugar refiner, and Cheil Mojik, which later becomes the group's clothing and chemical arms, in the 1950s, and invested in the fertilizer and paper-manufacturing businesses in the 1960s, industries that were key parts of the government's economic policies then.

Lee established Samsung's electronics division in 1969, and then invested in heavy industries and chemicals in the 1970s. In the 1980s, Lee committed and enjoyed success in cutting-edge technologies such as the semiconductor business.

The development course of Samsung proves that Lee put national interest ahead of business interest. Starting with trading and then moving on to light manufacturing, heavy industries and technology-based businesses, Lee always seemed to have an awareness about the phase of national economic development, and had Samsung playing critical roles in advancing the country's economy on each step.

Man and talent first: Lee once said that he spent ''80 percent'' of his life in recruiting and training people and was ''thankful'' that his employees achieved good results. The words show the passion for Lee in discovering and training talent.

The principle of ''man and talent first'' is essential in understanding Lee's business philosophy that was always tied with the national interest, as summarized in his aforementioned conversation with Welch.

Pursuit of logic and reality: It wasn't that everything Lee touched turned into gold as Hoam had his share of business failures. After sustaining losses from land investment as a young businessman during the Japanese colonial era, Lee had always committed to the principle of investing logically.

''The only way a company could win in competition is through logical decision making, which enables it to cut costs and produce affordable and good quality products. This is why it is always important to introduce systems from advanced nations and develop technologies, which are critical to improving business management,'' Lee once said.

Lee's painful experiences from his business setbacks provided the foundation for his principle for pursuing logic and reality in business decisions.

The principle not only allowed rational business decisions and maximized efficiency, but also freed Samsung from illogical business customs that plagued other companies, such as personal connections from family, regions and schools having significant effects on employment, personnel promotions and business decisions.

Responsible management: Lee's business acumen blended the strength of the American way of managing business goals and the Japanese method of focusing on working principles and ethics. Lee stressed the importance of responsibility since the days he operated the Daegu-based Samsung Sanghoe, a small trading company that first sowed the seeds of the Samsung business empire.

Samsung was the first Korean company to introduce an ''individual-based business organization,'' which focused on detailing exact company policies and business goals to every employee, giving them each larger autonomy to improve their productivity as well as larger responsibility. This proved to be an essential formula for Samsung's success as a globally great company.

Samsung's corporate culture, identified by strengths in motivation, specialization in manufacturing and sales, responsible management and precise measuring of productivity, and training of management personnel, is a reflection of this principle.

Stressing credibility: Lee was strict about maintaining the quality of products and as well as keeping a trustful relationship with suppliers. Samsung's relentless pursuit for only manufacturing or selling products of the top quality was an important factor in enabling the growth of Samsung Electronics, now the crown jewel of the Samsung empire, as the world's largest electronics company.

The focus on quality has been consistent through Samsung's development in international trade, construction, heavy industries and chemicals, electronics and technology-based businesses, and the company had always spent its corporate wealth to build state-of-the-art manufacturing facilities and improving product technologies.

Pursuit of perfection: Lee's pursuit of perfection in every aspect of the business process was summarized by his words that ''to build an insufficient enterprise is the equivalent of a crime.'' Lee's idea of perfection is based on thorough preparation and responsibility at every stage in the business process, while his pursuit of ''completion'' referred to full dedication in maintaining the quality of products, services and business management. The completion, which required autonomy and responsibility at every level, was a leading force in Samsung's corporate growth.

Lee is remembered as a pioneering entrepreneur with bursting creativity and a passion for national development. His character is defined by his move into the semiconductor business at the grand old age of 73, which was then a massive gamble for Samsung.

''If I was interested only in earning money, I would have picked another business. But I was convinced that semiconductors would become critical as a national economic engine and provide a seedbed for future industries,'' Lee once recalled.

Samsung is now earning 20 trillion won in revenue per year from its chip business, with semiconductors established as one of the country's key industries.

Lee was never obsessed about Samsung gaining the top place in the domestic industry, but focused on its competition with industrial heavyweights from advanced nations. He was also a backer of the conglomerate, although he said that big and small corporations each hold an important role in the country's economy and must find ways to complement each other and coexist.

Samsung, guided by Lee's patriotic and people-centric approach to business, grew into Korea's truly national brand. Lee believed that the ultimate responsibility for a company was in finding ways to return its corporate wealth to society. Such beliefs led to the launching of the Samsung Foundation of Culture, which has been involved in a variety of corporate social responsibility activities through public projects or donations. Lee's entrepreneurship, respect for culture and commitment to corporate responsibility was inherited by Samsung after his death, with the business group involving in a variety of education and scholarship projects as well as cultural and social welfare programs. Such efforts led to the establishing of the Hoam Foundation in 1997.

Lee created a distinctive business philosophy that combined traditional Confucian ethics and modern business rationale and creativity, which contributed greatly in the shaping of Korea's modern economy. Lee can be counted among the world's truly great entrepreneurs with his legacy as an industrial giant and distinctive entrepreneurship that reflected influences from both Confucius and Schumpeter.

lkh@ewha.ac.kr