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Keywords
Samsung, Korean business management, manufacturing, GDP by industry, exports, GNP per capita, management structure, chaebol
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KOREA'S ECONOMIC DEVELOPMENT AND LEE'S BUSINESS EXPANSION
The name "Samsung" was used for the first time when Chairman Lee Byung-Chull established the Samsung Trading Company on March 1, 1938. The name has a two-part meaning: "Sam " in Samsung means big, abundant, and strong, while "sung" means bright, high, and eternaUy shining Hght. In November 1948, Lee changed the name to Samsung Corporation and began in earnest a trading business based in Seoul. While it began as just a small trading company, Samsung Corporation grew into one of Korea's leading trading companies in just one year.
With the estabhshment of Cheil Jedang (CJ) in August 1953, Lee began a manufacturing business. In the wake of the cease-fire agreement signed at Panmunjeom at the end of the Korean War, the situation on the Korean Peninsula was chaotic. In the midst of a massive influx of cheap aid goods, there were many that discouraged Chairman Lee from a huge investment in the manufacturing business that would take years for the investment amount to be returned. However, assured that the nation's economic development would begin with the manufacturing of substitutes for imported goods, Lee decided to make a large-scale investment and to build a factory with the money he earned through his trading business established in the ashes of the Korean War.
Chairman Lee's business expansion provides a roadmap of how the Korean economy and its industrial structure developed over time. During the Japanese colonial period from 1910 to 1945, it was difficult for Korean companies to grow under Japan's monopolization of capital and oppressive corporate environment. And with the Korean War in 1950, any green shoots of business activities and industrial facilities created after the surrender of Japan in 1945 soon turned into ashes.
The Korean economy remained in poverty until the end ofthe 1950s. In 1953, the time Chairman Lee launched his manufacturing business, Korea's GNP per capita was a mere US$67, the lowest level in the world (see Table 1). Considering the economic situation in the 1950s, Chairman Lee specifically chose to start sugar and textile businesses, both of which could...