Samsung Second Draft
INTERNATIONAL CORPORATE
GOVERNANCE
Samsung Corporation Case
Group 10
Student Name
Student Number
Anthony Njau
Praveen Jolly
Amol Marathe
140535
140613
140843
Edna Twumwaa Frimpong
Hassan Dirisu
140518
140797
Luis Pacheco Rojas
140519
1
The benefits, disadvantages and corporate governance issues of the Korean chaebol structure. 2
CHAEBOL :
Definition
( Korean literal meaning) Chae: wealth ; bol: powerful family
Conglomerate of companies usually owned by a single family in South Korea
CHAEBOL: Benefits
High degree of entrepreneurship:
Chaebols are aggressive in launching new products, new lines, buying and managing with existing corporations and entering new domestic and international markets which makes it economically effective
Agility in decision making: Most chaebols have official or unofficial control towers for the group, the strategy departments or the president rooms, this enhances decision making within the group
Scope and Scale of economies- Vast amount of technology, mutual assistance, knowhow, skill labor and executives flow throughout the group
Risk diversification and propensityReady to take business risks as they are resilient to sector specific risks due to the diversification of business and robustness of the organisation
Easy access to credits and
Government bailouts - Too big to fail status and the influence exerted by chaebol has left their debt paid many a time through the public money by nationalising the debt
Political influence- The sheer size of chaebol gives them unreasonable, collusive political influence. Success in political lobbying by developing social capital and raising the support of government and political leaders
3
CHAEBOL: Disadvantages
Inefficient synergies between affiliated companies: Chaebol typically focus on size and undermine the importance of harmony between its subsidiaries thus, leading to the inefficient allocation of resources between them.
Transparency and
GOVERNANCE
Samsung Corporation Case
Group 10
Student Name
Student Number
Anthony Njau
Praveen Jolly
Amol Marathe
140535
140613
140843
Edna Twumwaa Frimpong
Hassan Dirisu
140518
140797
Luis Pacheco Rojas
140519
1
The benefits, disadvantages and corporate governance issues of the Korean chaebol structure. 2
CHAEBOL :
Definition
( Korean literal meaning) Chae: wealth ; bol: powerful family
Conglomerate of companies usually owned by a single family in South Korea
CHAEBOL: Benefits
High degree of entrepreneurship:
Chaebols are aggressive in launching new products, new lines, buying and managing with existing corporations and entering new domestic and international markets which makes it economically effective
Agility in decision making: Most chaebols have official or unofficial control towers for the group, the strategy departments or the president rooms, this enhances decision making within the group
Scope and Scale of economies- Vast amount of technology, mutual assistance, knowhow, skill labor and executives flow throughout the group
Risk diversification and propensityReady to take business risks as they are resilient to sector specific risks due to the diversification of business and robustness of the organisation
Easy access to credits and
Government bailouts - Too big to fail status and the influence exerted by chaebol has left their debt paid many a time through the public money by nationalising the debt
Political influence- The sheer size of chaebol gives them unreasonable, collusive political influence. Success in political lobbying by developing social capital and raising the support of government and political leaders
3
CHAEBOL: Disadvantages
Inefficient synergies between affiliated companies: Chaebol typically focus on size and undermine the importance of harmony between its subsidiaries thus, leading to the inefficient allocation of resources between them.
Transparency and
References: April 22, 2008