Change of Leadership at Samsung Electronics Co (KRX:005930)

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By Stefan Larson on November 6, 2014 Technology & Software

Samsung Electronics Co (KRX:005930) has had a tough year so far, and is expected to go through tougher times in future . Samsung Electronics Co (KRX:005930)’s chairman May Lee Kun-hee is currently indisposed because of a heart attack he suffered in May this year.

His son, Lee Jay Yong is already assigned as a top official in the company, even though his leadership abilities are unknown to the management and executives. However, this is not the actual issue. The problem is that he hasn’t been formally announced to take over. But since Samsung Electronics Co (KRX:005930)’s annual business makes up the quarter of the country’s economy, it is speculated that a delay in the decision could prove too costly.

Lee Jay has been the vice chairman of Samsung Electronics Co (KRX:005930) since 2012, and has been part of the company since 1991. Although Lee has seen glorious days, when Samsung Electronics Co (KRX:005930) ruled over the smartphone market, he will be facing a task which is quite strenuous. The smartphone market has toughened up, with Apple (NASDAQ:APPL) being the toughest contender. That has now become the least of Samsung Electronics Co (KRX:005930)’s worries, as other companies entering into the smartphone market are equally good and a serious cause of concern for the company.

In addition, the latest Chinese brands with their inexpensive phones, have caused Samsung Electronics Co (KRX:005930) even more dismay. Samsung Electronics Co (KRX:005930) Galaxy 5 sales have not been as positive as anticipated and that has taken its toll on the overall profit of the company.

Samsung Electronics Co (KRX:005930)’s investors are curious about the performance of the vice chairman. There is not much of a track record that can be relied on to judge his work ethics in crisis situations. However, the investor’s anxiety can be put to rest if he is able to deal with Samsung Electronics Co (KRX:005930)’s current predicament in an effective way.

According to recent reports, several corruption scandals surfaced, based on Samsung Electronics Co (KRX:005930)’s management and merit policies. The company hasn’t released a statement to confirm or deny these allegations.

Corruption in the company isn’t the pressing situation at hand. Samsung Electronics Co (KRX:005930) must overcome the 75% losses it suffered at the hands of local Chinese smartphone companies. It’s too late for Samsung Electronics Co (KRX:005930) to argue over leadership, what matters is how Lee Jay is going to take Samsung Electronics Co (KRX:005930) out of its constantly declining position, and what strategies has he devised to better the overall company situation.

Lee Jay must be aware of the facts that gone are the days when Samsung Electronics Co (KRX:005930) was flourishing under his family’s management. The company has come under his leadership at a time when the company’s ship is in turbulent waters, and the situation is expected to get worst. It’s a great chance for Lee Jay to prove himself as a formidable leader, if he manages to get Samsung Electronics Co (KRX:005930) out of this tough hurricane.