COMMENT: Will the Audit Of Samsung Australia Result In Big Changes?
COMMENT: The decision to fly in a Samsung Corporation audit hit squad of 13 people to audit the Australian operations of Samsung Australia appears to be a drastic move by any count or for any company.
This is not the first time that this squad has taken such drastic action when there have been allegations of corruption and non compliance with company procedures.
They did it in China and Indonesia where, in both operations, they were able uncover irregularities which in some cases involved people who had been employed by Samsung Australia at one time or another.
As former Democrats leader Don Chip once said ‘you always need something to keep the bastards honest’.
The fact that the Samsung Corporation has taken such drastic action is a credit to the company as it demonstrates that they are prepared to act in the best interest of their staff, suppliers, distributors and retailers.
In today’s marketplace it’s critical for large fast growing companies like Samsung, whose Australian operation has grown to become the largest consumer electronics and appliance firm in Australia with revenues in excess of $1.6 Billion, are seen to have in place procedures that are open, fair and, above all, accountable.
What we have done in writing on this story is demonstrate that a corporation is prepared to take action in the best interests of their brand and their reputation.
In Australia, I have seen Samsung grow from a small company whose products were originally sold by distributors to a brand that, along the way, has faced some massive hurdles in getting to #1.
It’s been obvious for some time that there were problems at Samsung despite their dramatic growth. During the past 24 months the company has lost several senior and experienced managers, people who had knowledge of the industries that Samsung compete in, as well as some excellent relationships with key buyers of their goods.
To a company like Samsung this is a vital loss. Several times over the past 24 months we have been approached by both existing staff and those leaving the firm, and every time we were approached it was the same old stories, Korean management, hidden agendas etc, etc etc.
We chose not to write on this subject, not because we were in fear of losing an advertising partner but because the claims lacked documentation or evidence to support the claims.
However, when one gets tip after tip that that a hit squad of auditors have descended on a company as large as Samsung Australia, we as a media organisation have a responsibility to report the facts. Especially as these tips came from management still working within the firm as well as from those who quit Samsung out of sheer frustration.
In the past we were told the same old story by several existing and departing employees who said “great company, liked working there” but we “can’t handle the Korean management”. “They are secretive, create divisions in the company and above all “don’t work as a team”.
We were told about private deals that managers were told to go nowhere near if they wanted to keep their job at Samsung. We have taped interviews from employee after employee, some of whom had used secret “dob” in lines to raise complaints about procedures and management.
Time and time again we heard the same story. We also heard similar stories about LG Australia and their Korean management issues.
Today most of the people who quit Samsung are senior executives in major companies responsible for multimillion dollar budgets. They play key roles in growing the operations of competitors to Samsung.
What Samsung is doing via the use of an audit team is fixing a major problem that will result in Samsung Australia becoming a better operation.
I, for one, believe that a subsidiary like Samsung Australia should be run by a local CEO who has a long history of success in a Western market like Australia. Panasonic, Sanyo and Sony are already doing this in Australia, and LG Australia, who after their own set of problems and record multimillion dollar fines, has moved in a Korean executive who speaks excellent English and has a track record of successfully running their Canadian operation.
The ideal place for Korean management in a company like Samsung Australia is in CFO and operational and logistic roles where dialogue and reporting has to be kept up with overseas manufacturing and head office divisions.
Samsung Australia is an Australian company and it needs an Australian face at the pointy end.
In today’s market, the head of a major consumer electronics company needs to be able to communicate where his company is going and why. In the past, most of the CEOs of companies like Samsung, LG or Sony have not been able communicate a vision for their company because of poor English skills and a lack of Australian knowledge.
Globally, Samsung has benefitted from the appointment of executives with Western market experience. Dr. David Steel is a classic example. Today he is head of strategic marketing for Samsung Electronics in one of their most important markets, North America.
Prior to joining Samsung, Dr. Steel worked at McKinsey & Co. and Argonne National Laboratory of the U.S. Department of Energy. Dr. Steel earned a Ph.D. in Physics from MIT, an MBA from the University of Chicago, and a BA in Physics from Oxford University.
I first met David Steel when the Samsung consumer electronic division was a fraction of what they are today. Prior to him coming on board, Samsung advertising was created in Korea for use in markets like Australia, it was boring and did not reflect our culture or lifestyle.
Steele changed all that in his role as global marketing director and Samsung has blossomed to become a powerhouse in consumer electronics.
Steel has deep experience across several Samsung business units and possesses a breadth of expertise in many product categories.
He began his time at Samsung in the Global Strategy Group, where he executed strategic projects for numerous companies within the Samsung Group. From 2002-2007, he served as Vice President and head of marketing for the Digital Media business where he established the role of marketing within the $25bn business.
Working closely with subsidiaries like Australia. He was able to strengthen the focus on key accounts, leading to sales growth of more than 300%, and develop leading capabilities in marketing communications and public relations. In 2007, he moved to the Mobile Communications Division, where he oversaw marketing strategy for the world’s number 2 maker of mobile phones.
What has happened at Samsung is not a bad thing and the fact that we have exposed the problems in such an open way, goes a long way to Samsung’s credibility as a company.
The consumer electronics media has a role to play in writing about both the good and the bad that happens in this industry, we are not here to be used as a party political broadcast machine by PR companies who simply want favourable exposure for their products and services.
We write about an industry that is today a key part of society one that has migrated from niche technology publications and trade magazines to today being every day stories on TV and in mass media publications.
I am sure that had we not exposed the events taking place at Samsung, the newly anointed Marketing Director Lambro Skropidis would not have issued a press release.
The fact that we have the contacts and the experience to write such a story would have been useless without the conviction of both current amd past Samsung employees who went out of their way to contact us in coffee shop meetings, by phone or email from private accounts.
This speaks volumes to the extent of the frustration that people have been going through at Samsung Australia, who through one audit team swoop could become an even bigger and better company in Australia.
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