Samsung

The Samsung Group, based in Seoul, South Korea, is the world's largest conglomerate by revenue ($174.2 billion in 2007), and internationally is best known for Samsung Electronics, the world's largest electronics company and most popular brand of consumer electronics. The name Samsung is Korean for “three stars,” describing the core of the group—Samsung Electronics, Samsung Engineering & Construction, and Samsung Heavy Industries, one of the world's foremost manufacturers of ships, specialpurpose vessels, and off-shore vessels. Collectively, the Samsung Group companies are responsible for more than a fifth of South Korea's exports.

In South Korea, conglomerates like Samsung are called chaebol (or jaebol), “business families.” Despite being powerful multinational corporations, chaebol are still traditionally controlled by their founding family, in contrast with corporations run by a professional class of management executives. Chaebol—others include Hyundai and LG—are partially government sponsored, and the government-chaebol relationship was at the root of South Korea's rapid industrialization and transformation from a domestically focused agricultural economy to a modern manufacturing and export economy during the rise of the East Asian Tigers (beginning in the 1960s). Though a third of the largest chaebol collapsed during the Asian financial crisis of the late 1990s, Samsung survived and continues to thrive.

Until recently, the Samsung Group was headed by the Lee family. Currently, the chief executive officer (CEO) of Samsung Life Insurance, Lee Soo-bin (no relation), is running the chaebol in the aftermath of Lee Kun-hee's April 22, 2008, resignation amid an investigation into bribery allegations, according to which Samsung maintained a slush fund to bribe political figures in South Korea. It's not clear how long Lee Soo-bin's tenure will last, and whether the founding Lee family will resume direct [Page 692]control of the company through another family member. Members of the Lee family also control the Joong-Ang newspaper, the CJ Corporation, the Hansol Group, and the Shinsegae Group, all major South Korean corporations, but are not formally part of the Samsung Group.

The patriarch of the Lee family, Lee Byung-Chull, officially established the Samsung Corporation in 1951, having been forced to abandon previous business holdings (also named Samsung) because of the Communist invasion. After the war, Samsung's sugar refinery was South Korea's first postwar manufacturing facility, and the company began to diversify into a number of different areas, including insurance and securities.