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Introduction
Current and future leaders will generate lots of priceless business strategies and other proven business secrets by studying the life of Lee Gun Hee. The study focuses on the life of Lee Gun Hee was a man of his words. The research centered on his life of making Samsung the number one product in the world. He was successful in this endeavor.
The research centers on Lee Gun Hee as an instrument in the metamorphosis of the Samsung brand from a local Korean business enterprise to the world’s number 1 electronics company. The research on the leadership style of Lee Gun Hee is very useful to current and future leaders in all industries, especially those venturing into the saturated world of the hotel and restaurant industries.
Mr. Lee Gun Hee’s Beginnings
Lee Gun Hee is the chairman of Samsung Electronics. He graduated with an economics diploma. The chairman pursued his Master in Business Administration course at George Washington University deep within the confines of the United States in 1966. He was not able to finish his master’s course.
During the same year, Lee Gun Hee was elected to be a member of the prestigious International Olympic Committee. In terms of family background, he is one of the children of Samsung’s founder, Lee Byung–Chull. Forbes included Lee Gun Hee as one of the richest men of the world.
Lee Gun Hee was convicted for bribery. Lee Gun Hee proudly accepted all responsibility as one of the officers of Samsung Company. Lee Gun Hee and asked for forgiveness for the evils he orchestrated to generate more Samsung product revenues and asking for forgiveness as he resigned from Samsung. Consequently, Lee Gun Hee was incarcerated for his participation in the Samsun Slush fund scandal.
After being released from Jail, Lee Gun Hee returned to Samsung as its chairman to bring back Samsung to its former pedestal as the manufacturer of one of the best electronics brands in the world. To accomplish this task, Lee Gun Hee hired the best minds in South Korea. To ensure the continued leadership in the world electronics industry, Lee Gun Hee hired the best marketing, finance, management, and financial minds from around the world.
Mr. Lee Gun Hee as a Stalwart in the Global Electronics Industry
Chris Rowley (1) emphasized Lee Gun Hee is one of the stalwarts in the busines industry in South Korea. Lee Gun Hee owned only 1.8 percent of the Samsung stocks. Hundai car owner, Chung Joo Youg, owned 12.1 percent of Samsun. Lee Gun Hee formerly owned 26.55 percent of Samsung. He reduced his shares to only 1.8 percent without changing his controlling share in company. He did not transfer his original authority to the other managers of Samsung.
This clearly shows that stock ownership percentage does not affect the control or management of the company. It was customary in South Korea for the chaebol officers, like Lee Gun Hee, to control Samsung, irrespective of their stock ownership (51). The success of Lee Gun Hee’s management style is grounded on diversification, heavy reliance on external sources of funds and aggressive investment in uncharted or unfamiliar market segments. The Korean market structure focuses on strong state –business relations.
The strong Korean state –business relationship that precipitated to the regulation of the market bring unprecedented profitability and viability to Samsung and other Korean companies. The Korean state controlled the variation of organizations among the Korean business organizations.
The Korean state’s control of the Korean business organizations has brought economic success to the Korean businesses, the community, and the state. The states control includes financial regulations, infrastructure, buildings, and innovations in the continually changing Korean economic landscape through preferential treatment for one or more Korean groups of business segments. The state controls the credit policies contracted between the creditors and the business organization borrowers.
The Korean business picture depicts high diversification instances and the maintenance of high debt to equity ratios. The Korean business climate is characterized as diversification and easy access to banks to precipitate high debt to equity ratios. Diversification is a necessary requirement for banks to approve the business organizations’ loan applications. Specifically, Samsung’s diversification ratio is 75 percent.
Further, Jake Plunketter (1) theorized Lee Gun Hee, vice chairman of Samsung in 1978 when his father, Lee Byung-Chull was one of the major owners of Samsung. The father appointed his third son, lee gun hee, as his successor to handle the management of Samsung. However, Lee Gun Hee only owned a 0.45 percent of the company’s stocks. In 1995, the son maintained control over Samsung eight years after his father died.
Lee Gun Hee metamorphosed the Samsung conglomerate from its humble pioneering status, under his father, to the current change-based management style. Lee Gun Hee was instrumental in making Samsung the largest enterprise in South Korea and a world-class trading organization. Lee Gun Hee was pivotal in transforming the Samsung organization from its 70 years of pioneering status to becoming a state of the art world power in the electronics and other related business ventures.
Lee Gun Hee singularly orchestrated the new ventures into the aerospace, genetics, and macro molecule industries. Other Samsung flagship projects under Lee Gun Hee included innovative products in the electronics, semiconductor, and communication market segments.
Lee Gun Hee set the organization’s main goal to be a world-class family electronic appliances and communication products provider. Lee Gun Hee instituted vigorous reforms to grab a large chunk of the global business segment. Lee Gun Hee main management strategy was to instill self –discipline among the line and staff.
Consequently, Samsung’s decision making strategies blossomed to unprecedented worldwide efficiency, effectiveness, and profitability levels. Korean employees were shipped to places around the world to manage the Samsung branches. Specifically, Lee Gun Hee promoted 217 people and transferred 38 and 17 technology and globalization experts to production and administration departments around the world. In terms of management style, Lee Gun Hee emphasized the importance of decentralization.
Decentralization was a proven success after five years of its challenging implementation. In 1988, one year after Lee Gun Hee took the harness of the Samsung Corporation from his father’s death, sales had skyrocketed to 20,100 billion won. The sales figure generated a 341.1 billion won profit.
To be more effective, Jean Lee (364) proposed Lee Gun Hee toured the countries to personally manage each Samsun branch and address Samsung employees around the world in 1993. He personally changed the mindset of each employee to be globally competitive. In a U.S. meeting with its branch line staff, Lee Gun Hee emphasized that the old Samsung had died in 1986 (death of his father). The new Samsung image is to be first class in the production, service, and marketing of its worldwide products.
According to Roberto Gomez (713) emphasized there are some factors that influence the control intensity exerted by restaurant manager on their staff. Management is often strict in terms of quality service in the hospitality industry. The hospitality industry includes serving the clients’ needs in the hotel, restaurant, and other related agencies. Management’s control intensity is greater between the audits done at regular intervals.
Often, there is a connection between service quality and number of clients frequenting the restaurant, hotels, or related facilities. More specifically, there is normally more leadership control in industries where most of the clients rarely return for a second serving or booking.
Customer variability is a very complex matter in the service industry. The service providers will stand to lose lots of returning clients if their services are found wanting. According to Bronwen Cowie (47) there are four types of customer viabilities. The types are arrival variability, request variability, capability variability, effort variability, variability in subject preference.
In addition, the research indicated there are four categories of customer variability. They are classic reduction, low cost accommodation, uncompromised reduction. The study dictates the hospitality industry players must focus more attention to the unfulfilled services provided to ensure more revenues from the same market segment.
There different leadership traits. Bronwen Cowie (47) insists another research conducted shows that leadership had been found to play a crucial role in creating a significant change in the organizations makeup. The leadership is the sole prerogative of the appointed leaders. Some of the members may act as leaders during times when the leader is at a lost.
Consequently, the leader approaches the subordinates to help contribute the success of the entire organization. The subordinate’s expertise in one facet of the hospitality management may be a useful tool in augmenting the lack in the appointed leaders’ expertise. Leadership may be inspired by one’s knowledge, dedication, loyalty, and sincerity.
A leader who notices a loyal subordinate may appoint such subordinate to contribute one’s experience in the hotel and restaurant market segment. For example, the subordinate may teach the newly hire leader the rudiments of housekeeping. The new subordinate may train the newly hired superior the best to make mixed the ingredients for a bloody Mary concoction.
There are financially straining effects of the hospitality industry relationship when the customer who does not particularly need or want the hotel’s services is being used the normal hard sell marketing strategy. The customer feels he does not need rent a room for two days because of money concerns.
Likewise, the customer may not be too enthusiastic to dine in the particular restaurant to one’s hatred for food facilities characterized by overcrowding or long lines of people eager to buy a hamburger. In addition, the high cost of the restaurant may discourage the average earner from savoring the restaurants’ sumptuous dishes. In such case, the restaurant manager may feel giving on the prospective clients.
The manager feels that would be a waste the manager’s time to talk to people on the street. The manager may feel that the prospective person has no money to pay for restaurant’s premium food prices. Likewise, some managers may feel that the client may not belong to the higher income group because one’s suit or personal appearance give a false clue that the prospective client cannot afford to pay for the high hotel room rates.
In reality, the prospective client can afford to pay for the services of the hotel as well as for the high food cost of some of the fine dining restaurant’s costly menu prices. A suspect client is a prospective client who has not money to pay for one’s purchases. Normally, the hotel or restaurant manager may presume that the jobless street beggar without any clothes on his back is such a suspect client who cannot afford to pay for the delectable dishes.
Second, Sanjay Rao reiterated (7) emphasized the prices of the competitors are lower. The company sales person must accept that clients prefer to buy products at a lower price when the benefits and quality are the same. The company will find it an uphill climb when faced with the clients’ objection such athe competitors’ products are priced lower than your products despite the similarity in the products benefits and services.
Third, William Baker (443) opined that the leaders must accept that some of the competitor’s products and services are better than the leaders’ products or services.
In similar fashion as Mr. Lee Gun Hee did not accept being a second rate copycat electronics company forever. He aspired and worked hard to produce the world class Samsung products. Consequently, the company sales person, especially the hotel and restaurant industry person must accept the reality that some of the competitors’ products are of better quality than one’s own.
For example, the smaller Japanese car runs using lesser gasoline quantities compared to the average American cars. The disparity in gasoline usage n is because the American cars are bigger than the Japanese cars. The bigger cars need more gasoline to bring them from point A to point B in the map. The sales person of a dot matrix printer must accept that the laser printers print faster and produces better quality pictures compared to the dot matrix printers.
Fourth, Usha Ramanathan (7) emphasized the competitor’s before, during, and after sales services are better. The fact remains, some products have better features than others. Current and prospective clients prefer to buy products offering better and more benefits when comparing two or more competing brands. Consequently, the company must accept that the reality that the competitors’ brands are better than their own.
For example, the electric typewriter sales person must accept that the clients will prefer to buy a personal computer to produce a word document instead of buying a typewriter. The benefits of the computer over the electric typewriter are very evident. The situation brings out a challenge to the all companies to continually innovate their products to the point where they will have the best products and the best services in the hotel, restaurant and other industries.
Fifth, Yuanquion He (197) emphasized any company’s products may have a history of poor services at one time, but not all the time. For example, the manufacturer of the Toyota car brand has been charged for the malfunction of its car computer system. Some have complained the car computer accelerates when the brakes are sometimes stepped on.
Families of car owners complained the car’s malfunctioning computer caused the lethal crash accidents. However, Toyota fixed the problem in the best possible way, the owner asking forgiveness for unintentional computer lapses.
One of the best traits of the successful leader in the hospitality industry is to include the cultural diversity of the subordinates when instruction the subordinates to do a certain task or responsibility. In this regard, the leader should allow feedback mechanisms to grow.
The feedback mechanism results will help educate the appointed leaders on the effect of each command or policy given to the subordinates. The leader may use the feedback messages to offer a sincere explanation on why one or more policies in the hotel industry or office industry. The successful leaders must have an open mind for everyone’s ideas; the subordinates have their own story or expertise to share to the leaders and owners of the hotel, restaurant, and other industry segments.
According to Scott Eacott (35), the School Strategies the leaders may use entails using strategy. Strategy means avoiding bias in the distribution of job responsibilities. The manager should not delegate jobs on the basis of one’s gender. This would be used as a ground for case of illegal discrimination. However, the leader can leadership should take into account the social, political, historical, as well as cultural factors in delegating jobs to subordinates.
Likewise, leadership includes treating each person an equal in the line and staff responsibilities. The leader must not show bias in the promotion or termination of subordinates or employees. The best leaders will show convincing authority and expertise on the subjective matter at hand. For example, the manager can demonstrate the proper way to fold a table napkin. The chef can convincingly teach the apprentice the rudiments of cooking food.
Celester Varum (19) emphasized the successful leader in a hotel industry scene can institute a quality environment from the time the prospective client walks into the hotel’s front office section to inquire amount the rates, the services, and the rules of the hotel establishment.
The hotel manager can help policy planners and other related managers in the hotel and restaurant industry to persuade prospective clients of the many benefits of checking into the hotel for a night or a week of fun and relaxation. The hotel manager must offer the best possible room service as well as other amenities of the hotel to ensure the prospective clients returns for another night or week of friendly rendezvous.
Leadership Lessons to be learned from Mr. Lee Gun Hee
There are many lessons that can be drawn from studying the leadership style of Mr. Lee Gun Hee. His philosophy of giving the best to each client can be applied in the restaurant industry. The clients can be given the best quality service well within the confines of what the client has paid. However it would not be profitable to offer services to the current and prospective clients that may result to expenses exceeding the amount paid by the clients.
In addition, Mr. Lee Gun Hee was always in the forefront of the company. He would set up meetings with the subordinates to thresh out any loopholes in the company’s marketing as well as managements plans. The leaders must emulate Mr. Lee Gun Hee. The successful leaders must also visit each branch in any part of the world to see first –hand how the branch profits are being generated.
Further, Mr. Lee Gun Hee’s theory of making each member think globally instead of locally will come a long way into modernizing the hotel and restaurant industry. The leaders of today can look up to Mr. Lee Gun Hee as the prime mover in having a selfless attitude towards work. Mr. Lee Gun Hee was not in any discomfort when he visited the company’s branches around the world.
Mr. Lee Gun Hee would personally meet with the Japanese employees of the company’s branches in Japan. Mr. Lee Gun Hee would personally talk to the American employees of the Samsung branches in the United States. In the same light, the managers of the hotel and restaurant industry should also visit the employees in branches strategically located in many parts of the world.
The leaders should emulate Mr. Lee Gun Hee in presenting a no-nonsense leadership style. The leaders can emulate Mr. Lee Gun Hee by persuading and encouraging each and every employee to go that extra mile to offer the discriminating clients the best service they can give in exchange for the clients’ hard-earned money payments.
The leaders can implement Mr. Lee Gun Hee’s style of placing importance on research and development of new products and processes. In the hotel scene, the managers can offer amenities that will make the hotel stay more comfortable. The leaders can offer privacy conditions to ensure clients will continue to return to the hotel’s and the restaurant’s premises.
Further, leaders can emulate Mr. Lee Gun Hee by never accepting being the number one company as the end of the road. Instead, the leaders must continue to outdo itself in the next accounting period. Quality production should not be implemented only when the shareholders or the superiors are around.
On the contrary, excellence in terms of hotel and restaurant service delivery should a way of life, an everyday zealous endeavor to touch the lives of the mere mortals, the clients, and make pamper them in kinglike and queenlike fashion during each day’s or each weeks’ rendezvous inside the cozy hotel and restaurant premises away from the busy hectic city life.
Conclusion
Based on the above discussion, the study of the leadership style of Lee Gun Hee is very beneficial to current and future leaders in all industries, especially those venturing into the complex hotel and restaurant world. The study shows that Lee Gun Hee was a man of vision. He devoted his life to making Samsung the number one product in the world.
He was successful in this endeavor. The research shows that Lee Gun Hee was instrumental in the metamorphosis of the Samsung brand from a local Korean business enterprise to the world’s number one electronics product Indeed, current and future leaders will generate lots of priceless business strategies and other proven business secrets by studying the life of Lee Gun Hee.
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Plunkett, J., (2007). Plankett’s Advertising and Branding Industry of 2007. New York: Plunkett Press.
Ramanathan, U.,(2011) Guest’s Perceptions on Factors Influencing Customer Loyalty in the Hotel Industry. International Journal of Contemporary Hospitality Management, 23(1): 7 -25.
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