Aug 8, 2019 in Business

Samsung Electronics Management

Business management has been in the recent past, the most researched business topic. Many companies have invested heavily in improving their management structure. This paper looks at various concepts of business management, with a case study of Samsung Electronics. The primary goal of the journal is to analyze the current situation of the company and give the appropriate recommendations. We will look at the general structure of the company, the transportation economics strategies employed and the supply chain. Also, we will describe the inventory control practices and lastly look at the uses of technology within Samsung Electronics. The paper has found out that the company has the best and most efficient organizational structure, and its supply chain aims at meeting the consumers’ needs. Also, we discovered that Samsung Electronics has the best transport strategies, and it employs modern technology in its production and managerial processes. Lastly, we have recommended that the company should ensure the people in its board of governance are well experienced. Also, the company should set aside more funds to cater for the changes in technology.


Samsung is a multinational company, which deals with a broad range of electronics. It was started in Korea, and its headquarter is in Suwon, South Korea. It has been the largest Information Technology Company in the world since 2009, where it recorded total revenue of $206.205 trillion in 2014. In 2015, this revenue income increased by 20% to $247.44 trillion. This company has assembly plants and sales channels in over 100 countries worldwide, and it employs over 300,000 people. Its major electronic gadgets which it produces include the LCD screens, mobile phones (smartphones), memory cards and hard drives. Also, its major clients are technology-related companies such as Apple, Nokia, and Sonny.

Organization Structure of Samsung Electronics

Since Samsung is founded in Korea, its organizational structure is largely influenced by the South Korean culture, since most of the decision making takes place there. Its structure is organized in a hierarchical manner, which is differentiated in vertical and horizontal substructures. The highest in the ranking is the CEO, who is the chairperson of the board of directors. His responsibilities range from leadership, managerial and he is also the primary decision maker. The second layer in management is comprised of the Device Solutions Manager and the Digital Media and Communications Manager. Under Device Solutions department, we have the LED Business Division, Memory Division and S.I.S.I Division. Under the Digital Media and Communications department, we have the Consumer Electronics (CE), IT and Mobile Communications (IM) Division. Lastly, the management ends by the following departments; Visual Display Division, Network Division, Mobile Communications Division, Digital Imaging Division, Digital Appliances Division and Media Solution Center. All these divisions have a manager who represents them on the board go governance.

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Role of Transport Economics

Transport economics is a branch of economics which deals with the allocation of the necessary funds in the transport economics sector of a company. This transport follows the demand and supply theories; hence, it is one of the most important areas in a business. It identifies and analyzes the connection of between the company and its partners which include the suppliers and customers. It also dictates the level of satisfaction of clients. Samsung has invested heavily in transport economics. In the recent past, it has been setting aside 1.02% of its total revenue in this sector. Here, we are going to look at how this transport economics division has affected the transportation decisions in Samsung.

First, transportation economics determines how the goods are to be moved from the place of manufacturing to the customers.  It offers a way of linkage between the manufacturers and consumers. Samsung, in this case, provides significant amounts of capital to this department to try and identify the places of demand and also identify a linkage between the company and the identified business gaps. This strategy has helped the company improve its sales and market share.

Transport economics can also be used to measure the overall cost of the business. It can be used in determining whether the customer satisfaction leads to profit or loss to the company. This is identified by the amount of cost involved in the transportation of goods to the client. For example, Samsung has always been operating at a profit because it always makes sure that the cost of transport from the company to the customers does not exceed the selling price of the equipment.

Lastly, transport economics helps the management in determining the actual selling price of a product. The price of a product is determined by the cost of production and the cost involved in delivering the product to the consumers. For example, a mobile phone manufactured by Samsung Company in South Korea retails at a lower price in Korea as compared to when it is sold in Africa, despite the cost of production being the same. The reason for this is that there is a higher cost involved in transporting the product to Africa, than the cost involved in transporting the product to a consumer in Korea.

Samsung Supply Chain and its Contribution to Customer Service Levels

Samsung Electronics is currently the most successful electronic company in the world. The success of an enterprise is always determined by the success of its supply chain. The success of Samsung is brought about by its outstanding supply chain, which aims at meeting the customer’s needs. In this section, we will look at how this company manages its supply chain, and how it contributes to the client service and satisfaction level.

First, Samsung makes sure it improves its customer service levels by listening to the voice of its customers. It tries to understand the opinion and the behavior of its customers towards its products by sending representatives to the conferences and MBA programs in the local universities of the selected countries. By this, the company can meet several business leaders and the companies which can be potential partners. The information obtained is taken into consideration while modifying or manufacturing new products. Also, it uses the information obtained in determining the supply gaps.

Samsung supply department also employs best practice analysis in its operation. They analyze what other compotator companies are doing, and the gradually adopt their best practices. By this, they have managed to remain at the top of their competitors and also maintain a linear growth rate. This strategy has also helped the company identify what the customers of their competitors are lacking, and they incorporate the needs in the production system.

Inventory Control practice and use of Technology within Samsung

Inventory control practices are the specific steps a company takes so as to maximize its inventories. The aim of inventory control is to gain the maximum possible profits from the least amount of inventory investment without the compromising the customer satisfaction. Samsung Electronics use this strategy regularly so as to maximize its income and profits.

Samsung Electronics has largely invested in technology to increase its productivity and to improve the quality of its products.  There are many positive impacts this company has experience since it improved its technological platform. First, improved technology has led to an improvement of the communication systems within the firm. Different departments can now easily communicate and work together. Also, technology has enhanced the efficiency of the processes within the enterprise. There has been a considerable reduction of processing time thus more products are produced within a given period.

How Transportation Economics Strategy Maximize Shareholder Value

As stated above, transportation economics refers to the organization that makes sure that there is a business link between the producer (company) and the customers or the suppliers. The value of each shareholder is determined by the success of the transport economics strategy a company is implementing. A good strategy ensures that the goods produced to reach the desired consumers within the required time. Therefore, company’s sales increase as a result of the implementation of a good strategy, and as a result, an increase in sales leads to increase in the value of each shareholder. Also, good company links with its suppliers of the raw materials reduce the production cost. Reduction in production cost lead to a reduction in the price of a product and thus increase in sales. This also increases the shareholder’s value. Therefore, the shareholders’ value is directly related to the transportation strategy. A better approach leads to improvement of the value of each shareholder.

Conclusions and Recommendations for Benchmarking

We have seen that Samsung Electronics process the best organizational structure worldwide. Despite having this, the company should ensure that the people on the board of governance have the right experience since the growth of a firm is determined by the competence of its board of management. It is also clear that the company’s transport economics structure is one of the best. This paper recommends that Samsung Electronics should try to look at the currents trends in the business environment and adjust its transport strategies accordingly. We have also seen that the company has a strong supply chain that always aims at improving the customer satisfaction level. Lastly, it is clear that the company has adopted the latest technology that is incorporated in all its processes and departments. The paper recommends that the company should set aside more funds to the technological improvement division since the world technology is changing day by day. The management should make sure that the company’s technology matches the current world technology.

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