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The three-star empire, the old king died.
On October 25, 2020, Samsung Group Chairman Lee Jianxi passed away at the age of 78.
In response, Samsung issued a statement of condolences:
When Li Jianxi died on Sunday, his family, including his son and the company’s royal leader, Li Jae-yong, were by his side.
President Li is a true visionary who transformed Samsung from a local company to a leading industrial and innovative powerhouse in the world … His legacy will last forever.
Furthermore, Lee Jae-yong, Lee Jianxi’s son, also publicly stated:
All of us at Samsung will cherish your memory and thank you for the journey we have traveled together.
It can be said that Li Jianxi’s life went through most of Samsung’s company development. As head of South Korea and even the world-class chaebol, Li Jianxi’s life story of integration with Samsung is quite legendary. .
Become Samsung’s “second-generation boss”
Li Jianxi is the son of Lee Bingzhe, founder of Samsung Group and second generation family leader. He was born on January 9, 1942. After Li Bingzhe’s death in 1987, Li Jianxi took over as the second chairman of Samsung Group.
Although he managed to take over in the end, Li Jianxi’s path to the top was very bumpy.
Li Jianxi ranks third in the family, with two older siblings: the oldest son Li Mengxi and the second son Li Changxi. In the early days of the search for successors, Li Jianxi, who was still studying abroad, was not the first candidate.
It is worth mentioning that at that time, the continuation of rights and the inheritance of wealth in South Korea still adhered to the tradition of “passing forever and not passing prostitute.” Therefore, the eldest son Li Mengxi is indeed the first choice to succeed.
Later, Li Mengxi and Li Changxi enraged Li Bingzhe due to incidents such as scandals at chemical factories and struggles for rights. In the end, Li Mengxi was incarcerated in a psychiatric hospital on the pretext of being delusional.
On the other hand, Li Jianxi, after returning to China, was hired to work at the grassroots level and worked step by step. He was only promoted to vice president of Samsung C&T Co., Ltd. in 1978.
On the day of Li Bingzhe’s death, the group’s board of directors unanimously approved Li Jianxi’s decision to become president of Samsung; this also opened the “Li Jianxi era” of Samsung.
Build a Samsung empire
When Lee Kin-hee took over Samsung, Samsung already had a fundamental position among Korean companies, but at that time Samsung’s industry was largely based on manufacturing and imitation, and lacked innovation. It can be said that Samsung at that time was just a knockoff manufacturer.
After Li Jianxi took office, he began to reform and introduce the concept of “new business”, and told the employees: change everything except your wife and children.
Under the rectification, Li Jianxi not only solved Samsung’s 300% debt ratio, but also brought Samsung to the world and became the world’s leading industrial and technological empire.
First, Li Jianxi started in the spirit of “emphasis on quantity but not quality”.
Regarding poor quality and substandard products, Li Jianxi ordered the public destruction of 15,000 poor quality wireless phones. It also led the company’s top managers and employees to smash these phones to pieces with sledgehammers, then burn them in a fire, personally go into battle, and strictly control quality. .
In addition, Li Jianxi also attaches great importance to technological innovation. Every year, 7% of sales are used for technology research and development and product design.
In addition to technology, talent is also one of Li Jianxi’s reforms.
One genius can feed millions of people, and creativity is the most important driver of business success, so we must hire the best talent.
Li Jianxi wrote in the book “Samsung New Management”. To attract high-quality talents, Lee Jianxi took the lead in implementing the annual salary system and the performance system in South Korea.
It is worth mentioning that Li Jianxi still has a long-term strategic vision in the company’s operations. Already in the late 1970s, he persuaded his father to get involved in the semiconductor industry and made this business number one in the world. Now, there is no need to mention the importance of the semiconductor business for Samsung.
Additionally, Samsung announced in May 2010 that it will invest 23.3 trillion won in new industries, including solar cells, rechargeable batteries for electric vehicles, LEDs, biopharmaceuticals, and medical equipment.
In Li Jianxi’s view, by 2020, these five future growth engines will generate around US $ 44 billion in revenue. However, now he has not been able to see the results of this investment with his own eyes.
Under Li Jianxi’s reforms, Samsung’s total production value accounts for more than 20% of South Korea’s GDP. It has 18 publicly traded companies, including electronics, retail, theme parks, financial services, product engineering, life sciences, and many other companies.
In the newly launched 2020 Fortune Global 500 companies, Samsung Electronics ranked 19th, with revenue of $ 197,704 billion.
Additionally, Samsung’s global market share of nearly 20 products ranks at the forefront of global companies, and “Fortune” magazine selects three subsidiaries as the world’s top 500 companies.
Reuters once wrote in the article: Samsung chairman Lee Kin-hee coughs and all of South Korea will catch a cold, so it seems like it’s not a lie.
At the same time, Li Jianxi also sits firmly on the throne of the richest man in South Korea, and his value in 2020 will continue to reach $ 17.3 billion even after his separation. On the Forbes 2020 World Billionaires List, Li Jianxi is ranked 75th.
Samsung “Heirs”
Now, after Lee Jianxi’s death, the Samsung heir has become another focus of public opinion.
There are four children under Li Jianxi’s knees: the only son Li Zairong, the eldest daughter Li Fuzhen, the second daughter Li Xuxian, and the youngest daughter Li Yinxin (who died in 2005).
It is reported that to avoid repeating the battle for the position, Li Jianxi has made inheritance arrangements for her children. Among them, Li Zairong manages the financial and electronics business, Li Fuzhen is in charge of the hotel and chemical business, and Li Xuxian is in charge of the clothing and advertising business.
From the perspective of commercial distribution, the most basic electronic business is in the hands of the only son, Li Zaiyong.
In 2009, Lee Jae-yong was appointed Vice President of Samsung Electronics in the Samsung Group and was promoted to President a year later. In May 2014, after Lee Kin-hee was admitted to the hospital for a sudden myocardial infarction, Lee Jae-yong took over Samsung.
Judging from all aspects of the conditions, Li Zayong should be the most suitable successor. However, in recent years, Lee Jae-yong has been frequently “treated” by South Korean prosecutors due to negative incidents such as “bribery”, financial fraud and improper transactions, and has even been jailed for a year for “bribery” , and the case is still on trial. .
In the vortex of many times, it is not impossible for Samsung to inherit and change.
Also, according to a report issued by Ernst & Young, South Korea’s inheritance tax is among the highest in the world, with a minimum tax rate of 18% and a maximum tax rate of 50% for more than US $ 25 million. By this calculation, the heir can face a US $ 7.6 billion inheritance tax, and paying a huge inheritance tax can complicate the Lee family’s hold on the Samsung Group.
However, no matter who takes over in the end, it is important to be able to hold the wheel of the great Samsung ship. After all, the bigger the ship, the greater the chance of hitting an iceberg. Who can rule is particularly important.
Finally, may the deceased rest in peace.
Red Lei Feng Red Lei Feng Red Lei Feng(Public account: Leifeng.com)
Reference materials:
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https://mp.weixin.qq.com/s/3IXuv1MDvbJmwWxMn_VDjQ
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https://finance.sina.com.cn/tech/2020-10-25/doc-iiznctkc7507979.shtml
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https://finance.sina.com.cn/tech/2020-10-25/doc-iiznezxr7928498.shtml
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