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Wednesday, May 14, 2008

Samsung makes the biggest reshuffle of the year: Will it revive the company's image?

In an attempt to regain its image, South Korea’s largest business conglomerate Samsung Group made a series of replacements at executive level triggered after Lee Kun-hee, chairman of the group, resigned from his position on April 22. On Wednesday, the company declared that it replaced its chief executive. Yun Jong-yong, chief executive since 1996, will be replaced by Lee Yoon Woo, head of Samsung Electronics external relations. Yun Jong-yong will be working as a standing adviser. Samsung Electronics’ former chairman resigned after charges of tax evasion and breach of trust were brought against him. There were also serious bribery allegations but they were dropped. International Herald Tribune reports:

Lee Hak Soo, another vice chairman of Samsung Group, also quit the board in April.

Samsung Electronics is the world's biggest maker of memory chips and liquid-crystal displays. It is also the largest cellphone maker in Asia.

While Yun's resignation showed that Samsung wanted to appear serious about reform, analysts said, the changes should not mean a major difference in the way the company is run.

"Samsung is showing that it is changing and improving," said Park Hyun, an analyst at Prudential Investment & Securities. "It shows that the company wants to make a fresh start with new people."

Hwang Chang-gyu, another top executive in the semiconductor division, has been replaced. After the announcement of these replacements, the company saw a slight increase in its share price.

The newly appointed chief executive Lee Yoon-woo used to head Samsung’s Electronics’ semiconductor business form 1994 to 2004.

Samsung Group is the largest family-owned conglomerate in South Korea. For years, the organization has been accused of having opaque management. The group may have gone through a major reshuffle but many analysts believe that it will not bring any major change in the way things are done.

Related articles:
International Herald Tribune
Reuters
Chron.com
Business Spectator

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