Samsung Electronics Study

corporal Finance MSC in Finance

Samsung Electronics

Contents
1.? 2.? 5.? 6.? 9.? The Korean Chaebol social system Capital building : Samsung Electronics vs Intel Corporation Lee family share in Samsung Motors Samsung Electronics Board of Directors Dr Jangs allegations of self-dealing

10.? Pan-Pacific Industrial Investment

Corporate Finance 2 - Samsung For professional investors only. For discussion purposes only. Electronics - February 2012

2

The Korean Chaebol Structure (1/2)

§?? ADVANTAGES
-? Easy variegation due to brand name reputation and recognition -? economics of scope by synergy effects -? Economies of scale by large sizes -? Improvements in decision-making -? Improvements in capturing new business opportunities

§?? DISADVANTAGES
-? leave out of business transparency -?Autocratic decision making ( imperialistic centering) -?Delay in exits of unprofitable businesses -?High management costs (bureaucratic organisation) -? Inefficient resource allocation -?Lack of well-timed decision making and adaptation

Corporate Finance 2 - Samsung For professional investors only. For discussion purposes only.



Electronics - February 2012

The Korean Chaebol Structure (2/2)
G everywherenance Issues
? Largely rule by the owning family à? massive imbalance of power ? Corruption, self-dealing transactions ? Families left hand largely unchecked by other shareholders, the banks, and the government ? flower executive positions filled by family-members, with little incentive to action well à?not likely to be held responsible for unfortunate decisions ? Ignore long-term sustainability : top priority of growth over profitability + belief that the government would always bail them out
Corporate Finance 2 - Samsung For professional investors only. For discussion purposes only. Electronics - February 2012

Capital Structure : Samsung Electronics vs. Intel Corporation
Samsung
 Electronics
 
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