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Samsung Electronics’ International Business Strategy Samsung Electronics’ International Business Strategy 1 International Business Management 46K01 3 Group 4 GROUP 4 Danang, 42022 INTERNATIONAL BUSIN.
Samsung Electronics’ International Business Strategy DANANG UNIVERSITY OF ECONOMICS Faculty of International Business GROUP 46K01.3 INTERNATIONAL BUSINESS STRATEGY OF SAMSUNG ELECTRONICS COMPANY Academic Advisor: PhD Huynh Thi Dieu Linh Danang, 4/2022 International Business Management_46K01.3_Group Samsung Electronics’ International Business Strategy TABLE OF CONTENTS INTRODUCTION I General information about Samsung Electronics Corporate profile The process of formation and development Core business values Products description 10 Samsung Electronics’ SWOT analysis 12 II The strategy of international business 17 Strategic positioning 17 Value creation activities 18 Global Expansion 20 Choosing the international business strategy of Samsung Electronics 21 III The organization of international business 23 Organizational structure 23 Control systems and incentives 24 Organizational culture 25 IV The entry strategy 26 Penetration strategy 26 Reasons to choose the strategy 26 Implementing strategy 27 Result 29 V Global production and supply chain management 31 Key criteria 32 Six Sigma 33 DMAEV 34 VI Global human resource management 35 Staffing policy 35 Training and management development 39 Compensating expatriates 42 International Business Management_46K01.3_Group Samsung Electronics’ International Business Strategy International labor relations 42 CONCLUSION 44 REFERENCES 45 International Business Management_46K01.3_Group Samsung Electronics’ International Business Strategy TABLE OF FIGURES Figure Logo of Samsung Company Figure Samsung LCD QLed 10 Figure Samsung Glaxy Z Flip 11 Figure Samsung’s camera 12 Figure Organizational structure of Samsung Electronics 23 Figure Market share of TV LCD Vietnam in March 2008 (Source:GFK) 30 Figure Profit from Samsung Vina Joint Venture in billions VND (finandlife.com) 30 Figure Export revenue of SEV 2010-2013 in billions USD (finandlife.com) 31 Figure Reason for early return 37 International Business Management_46K01.3_Group Samsung Electronics’ International Business Strategy INDIVIDUAL CONTRIBUTION EVALUATION GROUP – 46K01.3 Student name Class Number % Contribution Lê Thị Hà An 46K01.3 02 100% Trần Đình Đình 46K01.3 08 100% Nguyễn Thị Thùy Dương 46K01.3 10 100% Nguyễn Nhật Lam 46K01.3 18 100% Đinh Thị Phương Thảo 46K01.3 26 100% Hoàng Thị Tường Vy 46K01.3 39 100% International Business Management_46K01.3_Group Samsung Electronics’ International Business Strategy INTRODUCTION When it comes to business, every company seeks to go forward with a view to reaching the highest level of growth and achieving its own goals Nevertheless, being the market leader is not simple for any business To outperform all of its competitors, a company must adopt a unique style of thinking Additionally, in the age of globalization, the world economy has witnessed an integrated and interdependent trend, evidenced by a significant increase in international business activities Reduced tariffs, improved communications and higher capital mobility have made it possible for enterprises to connect to international markets and grow globally As a result, companies increasingly have a tendency to conduct business internationally and grasp these opportunities to achieve their objectives, leading to a rapid rise in the concept of international business management among companies The primary purpose of this report is to analyze the international business activities of a multinational company based on the knowledge obtained in an international business management course As a result, our group decided to choose Samsung Electronics Co Ltd as the research object Samsung Electronics is a well-known multinational electronics company with operations in a wide range of geographic areas all over the world In detail, we would investigate how Samsung Electronics achieved significant success in expanding globally through its strategy of international business, organizational architecture, entry strategy, global production & supply chain management and global human resources management International Business Management_46K01.3_Group Samsung Electronics’ International Business Strategy I General information about Samsung Electronics Corporate profile Company’s name: Samsung Electronics Co Ltd Website: www.samsung.com Overview: Samsung Electronics Co Ltd (Samsung) is a South Korean multinational electronics company which specializes in consumer electronics, information technology and mobile communications, and device solutions Figure Logo of Samsung Company Headquarters: Seoul, South Korea Year established: 1969 President & CEO: Kyung, Kye Hyun Vice Chairman & CEO: Han, Jong Hee Business philosophy: Samsung Electronics devotes its talent and technology to creating superior products and services that contribute to a better global society To achieve this, Samsung sets a high value on its people and technologies Mission and value: “Samsung is committed to complying with local laws and regulations as well as applying a strict global code of conduct to all employees It believes that ethical management is not only a tool for responding to the rapid changes in the global business environment but also a vehicle for building trust with its various stakeholders including customers, shareholders, employees, business partners and local communities With an aim to become one of the most ethical companies in the world, Samsung continues to train its employees and operate monitoring systems, while practicing fair and transparent corporate management.” In addition, Samsung Electronics has its operations in a number of different geographic areas, including the Americas, Europe, Africa, the Middle East, and Asia-Pacific International Business Management_46K01.3_Group Samsung Electronics’ International Business Strategy The process of formation and development As a company with a long history in the electronics industry, the process of establishment and development of Samsung Electronics went through main stages (Samsung n , n.d.), specifically listed as follows: 1969 - 1979: Diversifying in electronics Samsung Electronics was first established in 1969 and quickly became a major manufacturer in the Korean market During this initial period, the company witnessed a burst of growth from burgeoning home electronics and started exporting its goods for the first time Additionally, Samsung Electronics purchased a 50% share in Korea Semiconductor, enhancing its position as a market leader in the production of semiconductors 1980 - 1989: Entering the global marketplace At this stage, Samsung Electronics has entered the international market Two research and development (R&D) institutes were established as a result of Samsung Electronics' increased focus on technology, which helped the company further its reach into the fields of electronics, semiconductors, optical telecommunications, and new areas of technological innovation like nanotechnology and advanced network architectures The combination of Samsung Electronics and Samsung Semiconductor in 1980 marked a significant turning point 1990 - 1993: Competing in a changing technology world In the early 1990s, high-tech companies faced several challenges Competition and consolidation were thriving while mergers, alliances, and buyouts were frequent At this time, rethinking technology and service offerings were essential for businesses Additionally, several businesses started to cross national and corporate boundaries As a result, Samsung Electronics took advantage of these chances by adjusting its corporate strategy to better meet consumer needs 1994 - 1996: Becoming a global force In the mid-1990s, Samsung Electronics revolutionized its business by putting a priority on creating goods of the highest quality, ensuring complete customer satisfaction and acting ethically as a company During this time, 12 additional items attained the top market position in their respective categories, and 17 other products - ranging from semiconductors to computer monitors, TFT-LCD screens to color picture tubes - climbed into the top five products for worldwide market share International Business Management_46K01.3_Group Samsung Electronics’ International Business Strategy Being No.1 also includes maintaining corporate social responsibilities, whether they relate to environmental protection, social welfare, sports, or cultural activities In order to achieve this, Samsung Electronics actively engaged in sports marketing As a result of these efforts, in July 1996, the company's chairman, Kun-hee Lee, was elected as a member of the International Olympic Committee (IOC), considerably enhancing the company's reputation as a major supporter of international athletics 1997 - 1999: Advancing the digital frontier Thanks to Samsung Electronics’ leadership in digital and network technologies and its consistent focus on electronics, finances, and associated services, Samsung Electronics was one of the few firms that continued to develop despite the 1997 financial crisis that had an impact on almost Korean enterprises 2000 - 2004: Pioneering the digital age International business has experienced revolutionary innovation and potential thanks to the digital era Samsung Electronics has adapted by utilizing cutting-edge technology, offering goods that are competitive and continuously innovating 2005 - Present: Fortune global top company, Samsung With its success in the electronics industry, Samsung has positioned itself as a technology sector leader and is currently among the top 10 worldwide brands Core business values According to Samsung, success in business is a result of upholding strong values For this reason, Samsung Electronics prioritizes every decision the company makes on the following core values along with a strict code of conduct ● People: A firm is, in essence, its people The goal of Samsung is to provide as many chances as possible for each employee to develop to their full potential ● Excellence: Everything action taken at Samsung is driven by an unyielding passion for excellence and an unfaltering commitment to developing the best products and services on the market ● Change: Since the company's foundation, Samsung Electronics set its sights on the future, anticipating market needs and demands so it can steer the company toward long-term success ● Integrity: Samsung Electronics was built on a basis of moral behavior They always engage with fairness, respect for all stakeholders, and complete transparency as the company's orientation International Business Management_46K01.3_Group Samsung Electronics’ International Business Strategy ● Co-prosperity: Samsung is dedicated to becoming a socially and environmentally responsible corporate citizen in all of its communities all over the world Additionally, in 2005, Samsung Electronics introduced the "Five Samsung Business Principles" as a statement of its dedication to Corporate Social Responsibilities (CSR) as a global leader in the industry The principles act as the framework for its worldwide standard of conduct, which ensures conformity to moral and legal obligations as well as the fulfilment of its corporate social responsibilities Five Samsung business principles include: ● Comply with laws and ethical standards ● Maintain a clean organizational culture ● Respect customers, shareholders and employees ● Care for the environment, safety and health ● A socially responsible corporate citizen Products description The company's product portfolio consists of televisions (TV), refrigerators, washing machines, air conditioners, medical devices, printers, monitors, computers, network systems, and digital cameras Additionally, it produces LCD and LED panels, cell phones, smartphones, tablets, and associated accessories Samsung Electronics also offers solutions to retail, hospitality, healthcare institutions, finance, education, transportation, and government sectors In details: Televisions ● In 2007, Samsung officially launched the "Internet TV" - a device that allows users to watch traditional television shows while simultaneously receiving information from the Internet Afterwards, Samsung created the "Smart LED TV" which enables extra installed smart television apps ● In 2009, Samsung held the greatest market share in the globe for a fourth consecutive year thanks to sales of almost 31 million flat-panel Figure Samsung LCD QLed televisions 10 International Business Management_46K01.3_Group Samsung Electronics’ International Business Strategy - Focus on risk management for sustainability: responsible supplier work environment management and conflict mineral transparency Human Resources Capacity - Strengthen professional procurement capabilities to develop global procurement experts and leaders - To provide free training programs, use the training facility dedicated to educating supplier employees Six Sigma Samsung's supply chain management consists of several operational core processes, each with its own complex design Yang el (2007) examined some of Samsung's business practice approaches, including SCM Six Sigma and DMAEV (define, measure, analyze, enable, and verify), SCM's collaborative relationship concept necessitates the integration of key business processes that enable information sharing and group planning within and across the supply chain network of suppliers, retailers, manufacturers, and consumers (Yang, Choi, Park, Suh, & Chae) There are numerous approaches and systems available today for process innovation Six sigma and supply chain management (SCM) are two techniques that aim to improve processes and quality while also synchronizing a company's value chain, from inbound logistics to sales and customer service Why Samsung chooses SCM six sigma? Despite extensive use of SCM solutions and process innovation to improve global business operations, the company felt there was still significant room for improvement in its supply chain operations in 2004 The Group's senior management decided to capitalize on the potential synergy between SCM and six sigma in the early 1990s, which they believed was based on four key areas: - Project discipline: Six sigma would impose a more disciplined approach to SCM projects and ensure that SCM projects were rigorously defined and methodically executed - Sustaining results: Six sigma supplemented by Samsung's own centralized system of capturing and tracking all of its projects beyond their completion ensures that improvements are sustained 33 International Business Management_46K01.3_Group Samsung Electronics’ International Business Strategy - - Well-established HR framework: People are a key area for potential improvement in CM activities at Samsung The company is constantly short of trained, qualified, and talented employees to maximize the potential of its systems and processes Quantitative strength: There was an abundance of quantitative data about operational activities and performance, but it was not used effectively for problem solving or decision-making Samsung SCM six sigma Six Sigma is a cross-functional business innovation and growth strategy that maximizes profits by offering products and services that meet the needs of customers SCM and Six Sigma have been critical enablers of management innovation and growth at Samsung However, Samsung recognizes that its SCM operation has significant room for improvement As a result, the effort has been focused on combining SCM and six sigma and developing a proprietary six-sigma-based methodology to improve its SCM operation Samsung's efforts and investments have borne fruit Their SCM six sigma program has produced highly qualified and talented SCM specialists who are now training other members of their organizations in the methodology and leading SCM projects SCM projects are being prepared and carried out with greater discipline, and their outcomes are being continuously monitored and shared via Samsung's six sigma repository Samsung's pursuit of global optimum is ongoing, and SCM six sigma is expected to play a supporting role DMAEV The resulting method is known as DMAEV (define, measure, analyze, enable, and verify) Samsung also used five design parameters (process, operation rule and policy, organizational role and responsibility, performance measure, and system), techniques for process modeling and value chain mapping, as well as SCM-related investment value analysis methods The SCM Business Team (SBT) at Samsung recognized that the success of the DMAEV methodology in driving SCM innovation would be dependent not only on the methodology's strength, but also on relevant business and organizational factors The following design principles were developed to guide SCM six sigma projects through all DMAEV stages based: Global optimum 34 International Business Management_46K01.3_Group Samsung Electronics’ International Business Strategy - All ideas for improvement must be aligned with global rather than local goals Two mechanisms were used to ensure global optimization: A flow-down tree of critical-to-quality KPIs (CTQ-Y) and a bottom-up check to ensure that global KPIs are not impacted Process KPI mapping - Process KPIs adhere to the SCOR Model and are used to define objectives and monitor the process's progress toward meeting improvement plan objectives Systematization - At Samsung, systematization is viewed as a critical component of an SCM initiative - Samsung makes extensive use of systems to effect behavioral and process changes Five design parameters - DMAEV employs five design parameters to characterize the changes that must be managed throughout the DMAEV process stages: process changes, operation rule & policy changes, role & responsibility changes, and performance VI Global human resource management Staffing policy a Kind of staffing policy - The geocentric staffing policy Samsung Electronics applies the geocentric staffing policy to seek the best people for key jobs throughout the organization, regardless of nationality With this policy, all parent country nationals (PCNs), host country nationals (HCNs), third-country nationals (TCNs) are used for key positions because the approach's goal is to select the best person regardless of nationality Therefore, it is proposed for Samsung Electronics to appoint among all PCNs, HCNs, and TCNs according to their required ability In fact, Samsung employs a small percentage of non-Koreans inside Korea but hires a higher percentage of non-Koreans outside of Korea (MBA Student of Sultan Azlan Shah University, 2016) Currently, Samsung's investment projects in Vietnam are directly attracting 16,500 qualified and technically skilled workers To select the best quality human resources, Samsung also cooperates with universities and colleges in localities where factories are located to organize training programs, recruitment and bring useful activities such as Solve for Tomorrow, (Chiến lược quản trị nguồn nhân lực Samsung, 2021) This policy helps Samsung Electronics Vietnam build a highly coordinated international team of executives, effectively allocating human resources, which meets the requirements of global 35 International Business Management_46K01.3_Group Samsung Electronics’ International Business Strategy standardization and a transnational approach strategy Therefore, Samsung makes use not only of unique local knowledge and understanding of markets but also the varied skill sets, and knowledge presented by a global workforce to undertake R&D Besides, it is easier for Samsung's subsidiaries to learn and apply the orientations from the human resource management strategy in Korea (Chiến lược quản trị nguồn nhân lực Samsung, 2021) Additionally, the multinational composition of the management team in Samsung Electronics would also reduce cultural myopia and enhance local responsiveness However, at Samsung, obstacles to cross-cultural communication arise when employees feel they are not appreciated The number of young workers joining the company has been increasing and employees who are competitive and not have disciplinary reports will be promoted regardless of seniority and may receive higher salaries (MBA Student of Sultan Azlan Shah University, 2016) This makes some staff feel they are not appreciated and underpaid compared to employees of their level in other companies To sum up, by employing the geocentric approach, Samsung Electronics gains a lot of benefits to overcome the cultural and institutional barriers and can use human resources effectively At the same time, staff has more growth opportunities when ideas are more widely and easily exchanged, fewer barriers to promotion, and opportunities to develop global leaders, b Expatriates management With a geocentric approach, the expatriates need not be home country nationals and the firm does not base transfer decisions on nationality Expatriates, or international assignees, refer to employees who are working and temporarily residing abroad Samsung Electronics uses expatriate managers for multiple purposes expecting the various benefits they will bring to the company However, managing expatriates is not an easy task because it is usually associated with high costs and a great deal of preparation Expatriate Failure Dispatching expatriates is a double-edged sword for MNCs in general and for Samsung Electronics in particular Because it has both the potential for bringing large profits and causing significant losses It is a high-risk activity, with an average of 16% 40% of overseas assignments failing and the costs of approximately $1 million per failure (International Staffing and Expatriate Management:A Case of Samsung Electronics, 2022) 36 International Business Management_46K01.3_Group Samsung Electronics’ International Business Strategy Expatriate failure is defined as the staff who return home before the agreed end of an IA, because of personal problems and/or poor work performance According to Shay & Tracey and Yeaton & Hall, expatriate fails according to some reasons such as: - - - The failure of the expatriate or his/her family to adapt: This may not be a problem for the manager, who can make friends at work But it can be difficult for the spouse who might feel trapped at home The problem is often exacerbated by immigration regulations that forbid a spouse from taking a job Besides, language barriers and housing needs can become more complicated when the entire family needs to adapt to a new culture defining the success of the assignment Inadequate knowledge of the host culture: This element requires cross-cultural adjustment such as coping with culture shock, speaking in foreign languages, interacting with local nationals, and embracing different laws and customs, Inability to cope with larger overseas responsibilities: Expatriate managers have to adjust to a new work environment and the challenges that bring Therefore, trying to manage local staff can often be difficult Larger overseas responsibilities can lead to increased stress, physical exhaustion, and emotional impacts such as anxiety, frustration, and anger Besides, there are a few other reasons such as lack of technical expertise; personal or emotional immaturity, Figure Reason for early return 37 International Business Management_46K01.3_Group Samsung Electronics’ International Business Strategy Expatriate failure is very costly as it causes both direct and indirect costs Direct costs include airfares, training, and the expatriate’s salary, Indirect costs are invisible costs and it is hard to quantify in monetary terms The SE’s relations with clients, host government officials, and local businesses might be damaged In addition, the company could lose its market share, and employees’ morale and productivity can be damaged Expatriate selection The Expatriate selection process at Samsung is very rigorous Going through many new processes can choose the most typical candidates Candidates after passing the qualifying round will continue to take the GSAT survey (Global Samsung Aptitude Test) conducted by the organizers After that, candidates who will continuously go through rounds of interviews can become Samsung's official employees (Samsung Việt Nam tổ chức kỳ thi tuyển dụng GSAT cho 2.400 kỹ sư cử nhân đại học, 2022) Besides, to reduce expatriate failure, Samsung Electronics improved selection procedures Four dimensions that seem to predict expatriate success are: - Self-orientation: Expatriates with high self-esteem, self-confidence, and mental wellbeing were more likely to succeed because they were able to adapt their interests in food, sport, music, their interests outside of work that could be pursued and were technically competent - Others-oriented: When expatriate managers from their home country or other subsidiaries join SEV in Vietnam, the more effectively the expatriate interacts with host-country nationals, the more likely he or she will succeed - Perceptual-orientation: This is the ability to understand why people of other countries behave the way they do, which avoids the problems and frustration for expatriate managers when they treat foreign nationals as if they were home-country nationals - Cultural-orientation: It refers to the relationship between the country of assignment and how well an expatriate adjusts to a particular posting Global mindset A global mindset may be the fundamental attribute of a global manager and it's often acquired early in life A global mindset increases the likelihood of action in the company and its effectiveness does not dampen over time Besides, implemental mindsets can also help solve anxiety and negative emotions effectively First of all, in the staffing process, Samsung has a different value of selection which mainly focuses on hiring new entry-level employees throughout their recruitment process GSAT test assesses candidates’ ability based on creativity, sense of judgment, and 38 International Business Management_46K01.3_Group Samsung Electronics’ International Business Strategy flexibility of thinking In addition, they also encourage prospective employees to have the ability of global talent, specialization for the job that will be assigned, and a strong sense of challenge Training and management development The human resource management tactic has helped Samsung have a staff that is extremely flexible and quickly adapts to any situation (Shih, Chiang, & Kim, 2005) Samsung has gradually trained an extremely elite and international team of personnel, few corporations can catch up a Training for expatriate managers Samsung shall conduct pre-departure training to provide expatriate managers with a better understanding of their workers’ rights and their working conditions before signing the employment contract in the sending country Samsung shall furthermore conduct postarrival training before commencing the employment of expatriate workers in the receiving country in their native language If Samsung is unable to conduct the pre-departure training in the sending country, the recruitment agency shall conduct the pre-departure training according to the training materials provided by Samsung Cultural training Culture has an important role in behavior, and it is no wonder that culture also plays a significant role in business because it is the individual manager who makes decisions based on their different cultural backgrounds Cross-cultural training has grown out of the need to ensure the success of the expatriate manager by bridging the gap among cultures Based on experience, Samsung Electronics is aware that most expatriates face significant problems when adapting to their new environment, making it difficult for them to operate and manage effectively (Brewster and Harris, 1999) Regarding Samsung Electronics Vietnam, Vietnamese culture values power distance and collectivism more than assertiveness and gender equality The Vietnamese highly appreciate leaders with charismatic, team-oriented, participative, and autonomous behaviors By contrast, they negatively associate self-protection with outstanding leadership Therefore, the company provides training courses to help expatriate managers adjust rapidly to the new working environment and be more effective in their new roles Expatriate workers from their home country or other subsidiaries are highly recommended to learn about Vietnamese culture 39 International Business Management_46K01.3_Group Samsung Electronics’ International Business Strategy and some specific characteristics in the workplace, in communication, and in managerial styles to get better performance and a smoother experience abroad in Vietnam (Tu, 2014) Language training English is the language of world business and it is quite possible to conduct business all over the world using English However, exclusive reliance on English diminishes the ability of Samsung's expatriate managers to interact with host country nationals Samsung expatriate managers willing to communicate in the language of the host country, even if they are far from fluent, can help build rapport with local employees and also improve the manager’s effectiveness When offering foreign language training for expatriates, Samsung Electronics believes it will improve their employees’ effectiveness and enable them to relate more easily to a host culture, which fostered a better image of Samsung in the host country A Samsung manager in China said: "I attend Chinese classes three months before my assignment here" (Shih, Chiang, & Kim, 2005) Practical training Practical training is aimed at helping Samsung's expatriate manager and their family ease themselves into day-to-day life in the host country A support network of friends for the expatriate is one critical need in practical training activities In this case, the expatriate community can be a useful source of support to help the family adapt to a foreign culture easier To effectively exchange tacit knowledge through Arisam groupware, Samsung SDS Co opened a new cyberspace which was called Forum, where an individual or group can exchange views and knowledge As for tacit knowledge, it opened up an integrated Q&A session in Smart Community, where a person or organization can ask questions and participants can advise each other on different issues To promote further the exchange of tacit knowledge, K-Village and Knowledge Mall were set up for experts and community groups to help exchange knowledge acquired at work, and various ideas (Lee, Chae, & Suh, 2014) Besides, there are other types of cross-cultural training such as: Immersion experiences can range from to months of training assignments to more extensive cultural learning programs The Overseas Area Specialist Course which was initiated by South Korea's Samsung Group in 1991 is an example of an extensive program Every year, over 200 carefully screened trainees selected one country of interest and underwent months of 40 International Business Management_46K01.3_Group Samsung Electronics’ International Business Strategy language and cross-cultural training Then, they spent a year in the chosen country devoted solely to understanding it Trainees had no specific job assignment and were not allowed to make contact with the local Samsung office While abroad, they were encouraged to use modes of travel other than airlines to achieve a deeper immersion in the local culture At the end of the immersion period, trainees returned to headquarters in Seoul (Korea) and reported on their experiences during the months debriefing period (Gupta & Govindarajan, 2014) → In general, the training program of Samsung nearly fully provides employees with skills and knowledge Effective learning and development programs empower staff to gain new skills and cultivate new knowledge https://sci-hub.hkvisa.net/10.2307/4165818 b Repatriation of expatriates Overseas assignments can often be enjoyable, financially lucrative, and careerenhancing experiences for employees However, some surveys have shown that the biggest problem faced by most of these companies over the last few years has been the management of repatriation According to the Migrant Worker Policy of Samsung Electronics (Samsung, Migrant Worker Policy, 2020): ● Expatriate workers shall not be responsible for their repatriation cost upon completion of the employment contract or early termination of the employment contract if adequate notice as required under applicable local laws and regulations has been provided and in line with the RBA Code of Conduct and the RBA Trafficked and Forced Labor – “Definition of Fees” policy ● Samsung shall consider providing for expenses related to foreign migrant workers returning to the sending country if foreign migrant workers resign without timely and reasonable notice due to extenuating circumstances such as critical illness or incapacity ● The costs of repatriating foreign migrant workers in cases of termination for misconduct (including criminal activities), obtaining other employment or termination of the employment contract voluntarily of their own volition in the receiving country, or involuntary termination for cause by internal disciplinary procedures will be borne by the foreign migrant worker The notice period required by law for these terminations will be observed 41 International Business Management_46K01.3_Group Samsung Electronics’ International Business Strategy Compensating expatriates National different compensations in the geocentric staffing policy are very real Whereby, the home-based policy is the most common approach that MNEs use (the balance sheet approach) With this approach, expatriates' base salary is determined by the salary structure It creates equity between assignments and between expatriates of the same nationality, facilitating expatriates’ re-entry and being easy to communicate The compensation scheme of Samsung Electronics is mainly based on compensation without discrimination and compensation for performance to ensure both internal impartiality and external competitiveness On top of it, individual performance for productivity-based outcomes is the only indicator to determine individuals’ rewards throughout the year According to the Migrant Worker Policy, some components of Samsung's compensation (Samsung, Migrant Worker Policy, 2020) are: - Salary: Samsung shall pay wages directly to its employees which are not less than the minimum wage prescribed by applicable local laws and regulations The wages shall not be paid based on piecework - Health and Safety: Appropriate workplace health and safety training shall be regularly conducted in the native language of migrant workers Besides, Samsung Electronics shall also provide appropriate and well-maintained personal protective equipment to expatriate workers which have been approved by authorities and meet the safety standards in their industry - In the case of dormitories provided by Samsung for expatriate workers, the dormitories must be maintained clean and safe and equipped with emergency exits, hot water for bathing and showering, adequate heat and ventilation, reasonable personal space along with reasonable entry and exit privileges Dormitory facilities shall have all relevant official permits related to health, safety, and security, including fire protection, sanitation, electrical, mechanical, and structural safety International labor relations About subsidiaries in Vietnam SEV Trade Union was established in 2012, and two years later, SEVT Trade Union was also officially established SEV Union and SEVT Trade Union were established under the management and responsibility of the Bac Ninh Provincial Labor Confederation and Thai Nguyen Provincial Labor Confederation: The President of the Trade Union of SEV and SEVT are both members of the Executive Committee Provincial Confederation of Labor 42 International Business Management_46K01.3_Group Samsung Electronics’ International Business Strategy Starting from 2016, officially unifying the name is SAMSUNG SEV/T UNION Now, SAMSUNG UNION is the name that applies both internally and externally (Tổ chức cơng đồn Samsung Việt Nam – Bạn biết…?, 2019) 43 International Business Management_46K01.3_Group Samsung Electronics’ International Business Strategy CONCLUSION Based on knowledge attained in the International Business Management course, our group could analyze Samsung Electronics Co Ltd‘s global operation in five main dimensions respectively: the strategy of international business, organization of international business, the entry strategy, global production and supply chain management, and global human resources management In summary, Samsung Electronics is one of the largest multinational companies in the world By dominating the global market, Samsung demonstrates its essential role and effect on contemporary technology-oriented consumers Samsung Electronics is widely recognized across the world for its remarkable workers, superior service and design, and dependable product innovation Its global business network includes dozens of sizable subsidiaries Samsung's capacity to operate on such a huge scale is obviously significant and the business consistently reports profitable figures from year to year despite company size The international business strategy of Samsung Electronics combines aspects of the global strategy with the transnational strategy In the first stage, this company used a global strategy since the quality of manufacturing is core to Samsung Electronics’ products, customers can be sure they will receive the same flagship phone, television, or home appliance wherever they choose to purchase it However, when it comes to international business, a variety of issues related to customer demands occurred In reality, there are some markets where expensive smartphones are not economically viable for an average consumer As a result, Samsung Electronics had to find ways to meet the demands of consumers from these areas by developing a specific line of goods that are somewhat less competent than the flagship line but still offer the customer enough features This may be regarded as a successful international business strategy since it allows the company to increase brand awareness without attempting to market premium goods to those who cannot buy them Additionally, the consistency in the organizational architecture, international business strategy, entry strategy, global production & supply chain management, and global human resource management would also contribute to the success of Samsung Electronics in expanding globally Last but not least, to sustain its leading position, Samsung Electronics must concentrate on the continuous creation of new business strategies in consideration of the rising competition challenges 44 International Business Management_46K01.3_Group Samsung Electronics’ International Business Strategy REFERENCES 20 năm "đổ bộ" vào Việt Nam, Samsung làm gì? 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International Business Strategy I General information about Samsung Electronics Corporate profile Company’s name: Samsung Electronics Co Ltd Website: www .samsung. com... daily life better (Chiến lược quản trị nguồn nhân lực Samsung, 2021) 24 International Business Management_46K01.3_Group Samsung Electronics? ?? International Business Strategy Samsung Electronics holds... reach out to customer service representatives from Samsung Electronics (Analysis Samsung Electronics Company, 2018) Information systems Samsung Electronics has different management systems from