What do management do when they haven’t got a clue? Answer: They announce a re-org. Samsung Electronics managers seem to be no different to managers elsewhere in the world. Last week, after a summer of dramas including slipping profits, bombed-out DRAM prices, a fizzled-out non-bid by US corporate raider Carl Icahn, and the mysterious, as yet unexplained, power outage at a DRAM plant, Samsung management announced a re-org.
Well, that’s all right then. That should get senior management off the backs of the operational management for a bit.
Senior management had previously announced a cost-cutting programme. That keeps the financial analysts off the backs of the senior management. Financial analysts love cost-cutting.
So, that’s it. Now it’s back to those swishy panelled locker-rooms in the Seoul clubs, and a slug of fine old Scotch.
As everyone knows, the memory market will turn, and Samsung Electronics has 44 per cent of the worldwide NAND flash memory market and 27 per cent of the DRAM market.
When prices stiffen, and with fab utilisation rates high and climbing, prices have to stiffen, profits will return, and that will get the analysts off the backs of the senior management.
And once the analysts are off the backs of senior management, the senior managers will be off the backs of the operating managers.
Samsung, of course, rationalises the whole ritual: “In order to pursue fast decision-making and increase competitiveness in manufacturing, we took some restructuring measures,’’
Sure.
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