What Is Samsung’s Organizational Structure? Samsung Organizational Structure In A Nutshell

Samsung has a product-type divisional organizational structure where products determine how resources and business operations are categorized. The main resources around which Samsung’s corporate structure is organized are consumer electronics, IT, and device solutions. In addition, Samsung leadership functions are organized around a few career levels grades, based on experience (assistant, professional, senior professional, and principal professional).

Understanding Samsung’s organizational structure

Samsung’s entire corporate structure revolves around products and is cemented at the company headquarters in South Korea, a country where it employs over 280,000 people.

The company has several divisions based on product category, with each division comprised of multiple business segments. These include:

  1. Consumer electronics – visual display, digital appliances, printing solutions, health and medical equipment.
  2. IT & mobile communications – mobile communications and networks, with Samsung the industry leader in developing an end-to-end product portfolio for 5G commercial services.
  3. Device solutions – memory and system LSI (large-scale integration) with a particular focus on semiconductor design. However, system LSI also encompasses multimedia card controllers, wireless LANs, and display drivers.

Each division provides a specific context in which resources, production, distribution, and sales operate. Each division is also focused on innovation that remains central to Samsung’s vision and mission.

Research and development

Samsung also has a non-product division based on research and development with a network of more than 10,000 personnel around the world. Core priorities include artificial intelligence, robotics, life care & new experiences, security, and next-generation media.

Samsung leadership structure

Despite a predominant divisional organizational structure, Samsung retains a somewhat centralized hierarchical leadership structure. As noted earlier, the corporate headquarters in South Korea is responsible for unifying the company and driving it forward. Instruction is sent down the line to executives in each division and so forth.

However, in recent years, the company has started to move away from aspects of the hierarchical structure toward a meritocratic structure where power is held by individuals who have earned it.

Samsung now has four career level grades:

  1. CL1 – assistant.
  2. CL2 – professional.
  3. CL3 – senior professional.
  4. CL4 – principal professional.

Before the initiatives came into effect, an employee was required to spend eight years at one grade before progressing to the next. As of 2019, the minimum period requirement was replaced with specific tests that would enable superior performers to move through the levels more easily.

To simplify its organizational structure, Samsung also combined the executive vice president and senior vice president roles into one position. The company also actively discourages employees from referring to colleagues by job title via removing markers of rank such as employee ID numbers. If nothing else, these initiatives provide a corporate culture more befitting of a meritocratic organizational structure.

Key takeaways:

  • Samsung has a product-type divisional organizational structure where products determine how resources and business operations are categorized.
  • Samsung consists of three product divisions: consumer electronics, IT & mobile communications, and device solutions. Each division has multiple business segments that, in combination with a standalone research and development division, help Samsung carry out its vision and mission.
  • In recent years, Samsung has moved away from a hierarchical management structure to one that associates employee rank with performance. Under this so-called meritocracy, employees can progress through various positions unencumbered by arbitrary wait periods. The company has also streamlined executive positions and improved corporate culture by discouraging employees by referring to each other based on job title.

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Organizational Structure Case Studies

Airbnb Organizational Structure

Airbnb follows a holacracy model, or a sort of flat organizational structure, where teams are organized for projects, to move quickly and iterate fast, thus keeping a lean and flexible approach. Airbnb also moved to a hybrid model where employees can work from anywhere and meet on a quarterly basis to plan ahead, and connect to each other.

eBay Organizational Structure

eBay was until recently a multi-divisional (M-form) organization with semi-autonomous units grouped according to the services they provided. Today, eBay has a single division called Marketplace, which includes eBay and its international iterations.

IBM Organizational Structure

IBM has an organizational structure characterized by product-based divisions, enabling its strategy to develop innovative and competitive products in multiple markets. IBM is also characterized by function-based segments that support product development and innovation for each product-based division, which include Global Markets, Integrated Supply Chain, Research, Development, and Intellectual Property.

Sony Organizational Structure

Sony has a matrix organizational structure primarily based on function-based groups and product/business divisions. The structure also incorporates geographical divisions. In 2021, Sony announced the overhauling of its organizational structure, changing its name from Sony Corporation to Sony Group Corporation to better identify itself as the headquarters of the Sony group of companies skewing the company toward product divisions.

Facebook Organizational Structure

Facebook is characterized by a multi-faceted matrix organizational structure. The company utilizes a flat organizational structure in combination with corporate function-based teams and product-based or geographic divisions. The flat organization structure is organized around the leadership of Mark Zuckerberg, and the key executives around him. On the other hand, the function-based teams based on the main corporate functions (like HR, product management, investor relations, and so on).

Google Organizational Structure

Google (Alphabet) has a cross-functional (team-based) organizational structure known as a matrix structure with some degree of flatness. Over the years, as the company scaled and it became a tech giant, its organizational structure is morphing more into a centralized organization.

Tesla Organizational Structure

Tesla is characterized by a functional organizational structure with aspects of a hierarchical structure. Tesla does employ functional centers that cover all business activities, including finance, sales, marketing, technology, engineering, design, and the offices of the CEO and chairperson. Tesla’s headquarters in Austin, Texas, decide the strategic direction of the company, with international operations given little autonomy.

McDonald’s Organizational Structure

McDonald’s has a divisional organizational structure where each division – based on geographical location – is assigned operational responsibilities and strategic objectives. The main geographical divisions are the US, internationally operated markets, and international developmental licensed markets. And on the other hand, the hierarchical leadership structure is organized around regional and functional divisions.

Walmart Organizational Structure

Walmart has a hybrid hierarchical-functional organizational structure, otherwise referred to as a matrix structure that combines multiple approaches. On the one hand, Walmart follows a hierarchical structure, where the current CEO Doug McMillon is the only employee without a direct superior, and directives are sent from top-level management. On the other hand, the function-based structure of Walmart is used to categorize employees according to their particular skills and experience.

Microsoft Organizational Structure

Microsoft has a product-type divisional organizational structure based on functions and engineering groups. As the company scaled over time it also became more hierarchical, however still keeping its hybrid approach between functions, engineering groups, and management.

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