(iTers News) – Choi Gee Sung, CEO and vice chairman of Samsung Electronics, stepped down as chief executive officer and took the helm as a head of powerful Samsung Group Corporate Strategy Office, keeping his title as vice chairman
Taking the office as a new acting and de-factor CEO is vice chairman Kwon Oh-Hyun, who is now heading Samsung’s semiconductor chip business, one pillar of the global IT empire.
The dismissal of vice chairman Choi is heralding the beginning of JY Lee’s era, heir apparent and single son of group chairman Lee Kun-Hee, because vice-chairman Choi has worked as a patronage of JY Lee who is now working as chief operating officer, COO of Samsung Electronics.
Vice chairman Choi has led Samsung’s nothing-short of miraculous rise to world leader in global TV and mobile phone markets, taking all the credit for seizing the control of the two markets from Sony Corp. of Japan and Nokia Corp. of Finland, respectively.
During his tenure, however, he has kept low-key and played a crucial patronage role in solidifying COO JY Lee’s leadership.
In a short PR message, Samsung said that new leader Kwon On-Hyun will handle corporate-wide affairs, but stressed that president Yoon Boo-Keun will remain in charge of Samsung’s Consumer Electronics Business, while president J.K. Shin will oversee IT and Mobile Communications Business.
New CEO Kwon, who won doctorate in electronic and electrical engineering at Stanford University, has no credit and experience that matches Choi’s claim to fame as ‘master of marketing and sales’, as he has been singlehandedly working as chip designer during most of his job career.
Leadership Void
Against this backdrop, Samsung said the two leaders of TV and mobile business would have no obligation to report to the new CEO, Kwon Oh-Hyun.
Given Choi’s strong influence and charismatic leadership, his resignation is sure to leave void of leadership especially for its TV and mobile phone business for a while, as the company got caught into a fierce legal litigation war with Apple Inc. on allegations that Samsung copied the designs of Apple iPhone and iPad.
Choi led the legal counter-offensive against the alleged patent infringement charges of Apple.
The No. 1 question mark is who will fill in the leadership vacuum, as COO JY Lee has successfully climbed his way up corporate ladder to somewhere near the top.
Mr. Choi at the age of 61, took office as president of Samsung‘s TV business in 2006 declaring he would beat out market leader Sony Corp. He delivered on his promise in less than one year, spearheading Samsung to zoom past Sony as new market leader. Riding on his flowering achievements, he was also assigned in 2007 to a critical mission to watch out then undisputed market leaders Nokia and Motorola.
Again, he reversed the gap with Motorola, seizing the No.2 seat from Motorola in late 2007.
His outstanding and steely leadership was rewarded in 2009 when he took the helm of Samsung Electronics as CEO to lead a whole operation from semiconductor chips to mobile phones to TVs to PCs to TFT-LCDs.
In early 2012, he also achieved his last mission, which seemed impossible, as Samsung crowned global mobile phone market as a leader in the first quarter of 2012.
At odds over business interest
Yet, his charismatic leadership started to get challenged, as Samsung’s Chairman Lee Keun Hee split the sprawling IT powerhouse into two business unities- Device Solutions for components and Digital Media and Communications for consumer products in late 2011.
Since then, Choi had led the Digital Media and Communications business, while Dr. Kwon spearheaded the Device Solutions business.
In early 2012, rumors have been circulating that Choi will soon disappear into background, because his strong stance against Apple has done more harm than good.
As Apple Inc, one of Samsung‘s biggest customers for memory chips and applications processor chips, has been threatening to shun away from Samsung and turn to other chip vendors, the rumors read, CEO Choi will have to take the blame and become a scapegoat.
True enough, Samsung business structure has been always a subject of contention, as the company has been not only supplying Apple and Sony with chips and displays, but also competing headlong with them in mobile phone and TV markets.
They are questioning the double identity of Samsung; critical components supplier, but fierce competitors.
This helps explain why Samsung split its whole empire, which was under Choi’s leadership, into two segments in late 2011–Components Device Solutions and Digital Media and Communications, reshuffling a whole of corporate business structures.
New CEO Dr. Kwon, 60 year old, joined the company as a chip engineer in 1985. He became senior executive in the memory chip business in 1992 and was assigned to lead then fledgling SOC chip business in 1998, just one year after the company suffered from Asian financial crisis as well as one of the chip industry’s worst recessions.
The Samsung Group Corporate Strategy Office is an unofficial office from which Samsung chairman Lee Keun Hee exerts unchallenged control over a group of approximately 60 affiliated companies-the sort of Chairman’s secretary office.
The secretary office once took the brunt of the blame for the country’s financial crisis in 1997, as it controlled a maze-like web of cross-investments across the affiliated companies and raised slush funds to put them to its owner’s private use.
The secretary office was criticized as a hotbed for Asia’s crony capitalism and dismantled in the aftermath of Asian financial crisis.
Under chairman Lee, Keun Hee, the Corporate Strategy Office has grown stronger back in influence and power, so that its main role is to chart out new directions for all of Samsung’s more than 60 affiliates, scrambling to carve out new growth seeds which can feed Samsung member companies even 10 years later.