[THE INVESTOR] Since joining Samsung Electronics in 1991, Lee Jae-yong has undergone trials, the latest of which is the mixed reviews on his leadership as he is set to officially enter the boardroom.

After earning a Master of Business Administration at Keio University in 1995, Lee rose to the assistant vice president position of the company’s strategic planning team in 2001, where he had his first taste of control, and consequently failure.




Lee set up the so-called “e-Samsung” by merging 14 software firms, believing software would be the core of Samsung’s future competitiveness.

However, Lee’s software dream did not materialize, as e-Samsung left nothing but around 20 billion won ($17.6 million) in deficit. As other Samsung affiliates shared the deficit of Lee’s software unit, the failure was buried. But it remains a painful experience of the heir apparent of Samsung and poses questions about his business management capabilities. 

After the unsuccessful attempt, Samsung refrained from investing in software development and even rejected investing in the Android operating system in 2003, which was acquired by Google in 2005.

Meanwhile, Samsung’s efforts to develop its own software continued as Lee became the chief operating officer of the tech mogul in 2007.

The company unveiled the Bada operating system in 2009, but it failed to hit the market.

By the end of the year, Lee was promoted to vice president. And in less than a year, he became the president of the most powerful arm of Samsung in October 2010, as Chairman Lee Kun-hee, who returned to the group after a slush fund scandal in 2008, began a de facto inheritance process.

In 2012, the only son became the vice chairman of Samsung Electronics and he has been steering Samsung in the absence of his father, who has been hospitalized since 2014.

“The vice chairman has been extremely silent, but has completed a handful of big deals,” said a senior manager at a Samsung subsidiary.

For the past two years, the scion of the founding family has made clear what to focus on and what to abandon, in an attempt to quell the skepticism surrounding him.

While selling the group’s defense and chemical units to Hanwha in 2014 and its petrochemical unit to Lotte last year, Lee focused on enhancing investments in biotechnology and artificial intelligence.

“It is true that our bio unit has received some spotlight under the JY leadership,” the manager said. “While some continue to question his management capabilities or leadership, there is widespread understanding that there has been some (positive) steps taken.”

Lee also decided to hand over the printing business of the electronics unit to HP, which will be put to a vote at the board’s meeting Thursday along with his nomination.

The ongoing restructuring of Samsung affiliates is expected to accelerate after his nomination passes through the board. With the electronics unit -- smartphones, semiconductors, display panels and home appliances -- at the top of the group, Samsung is forecast to foster bio, automobile parts and AI-based software as new core businesses. 

Lee also seems to be making efforts to change Samsung’s rigid, top-down corporate culture by simplifying corporate ranks and seeking a horizontal organization similar to smaller information technology startups.

“There have been some vibes felt by employees that the atmosphere is about to change,” said a rank-and-file employee at Samsung Electronics. 

“We hope for better communication and softer but firm leadership.” 

By Song Su-hyun/The Korea Herald (song@heraldcorp.com)