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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.

Read Next: Organizational Structure.

Read Also: Samsung SWOT Analysis What Is A SWOT Analysis.

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