The Glory and Stupidity of the Three-Star Dynasty

In the past 2016, Samsung was in a quagmire.

The highly anticipated Galaxy Note 7 not only failed to bring Samsung's mobile phone business back to its peak, but instead became the beginning of a series of nightmares for the company due to constant battery explosions.

While the sound of Samsung Note 7 exploding is still ringing in our ears, Samsung Group's "crown prince" Lee Jae-yong has been dragged down by his bad teammates and is deeply involved in Park Geun-hye's "bribery scandal."

On the 16th, the special prosecutorial team responsible for investigating the "cronyism" incident in South Korea applied to a Seoul court for an arrest warrant for Lee Jae-yong. Although Lee Jae-yong escaped after nearly four hours of interrogation, when the news of Lee Jae-yong's arrest was exposed, Korean media made comments saying that "Samsung's bribery scandal is a shame for South Korea."

Since its founding by Lee Byung-chul in 1938, Samsung has been around for nearly 80 years. After three generations of the Lee family's efforts, Samsung has now become one of the most successful family businesses in the world. Its unique "built-in family office" structure is also praised by people, and the power struggle within the Lee family is as bloody as Korean dramas.

1. A Samsung Empire You Never Knew

The invisible Samsung Group

"There are three things a Korean cannot live without in his life - death, taxes and Samsung."

This statement shows the importance of Samsung Group to South Korea. At its peak, the value created by Samsung accounted for 25% of South Korea's GDP. It can be said that Samsung single-handedly supported South Korea's dream of becoming a powerful country.

The Samsung Electronics we are familiar with is just the tip of the iceberg of the Samsung Group. Currently, Samsung has 59 unlisted companies and 19 listed companies, and its business scope is staggering.

For example, several world-famous landmark buildings have Samsung's blood flowing through them. For example, the Petronas Twin Towers in Kuala Lumpur, the Burj Khalifa in Dubai, and Taipei 101 were all built by Samsung C&T. Even more amazing is that Samsung also participated in the construction of the UAE's $40 billion nuclear power plant.

Samsung Heavy Industries, a little-known company, is also a major industry of Samsung Group. Its business involves shipbuilding, solar energy, wind energy and power plant construction. Samsung Heavy Industries has branches in Ningbo, Zhejiang and Rongcheng, Shandong, China. Samsung Heavy Industries' annual profit exceeds the total profit of 80 major Chinese shipyards.

Samsung Group not only has outstanding performance in the chemical and industrial fields, but also has a presence in the fashion industry. You must know the world brand BEAN POLE in the fashion market. BEAN POLE is a well-known brand under the Korean Cheil Industries, which is the largest clothing manufacturer in Korea under Samsung. The reason for Lee Jae-yong's arrest this time was the merger of Cheil Industries.

In addition to the above, Samsung also has many industries, such as the five-star Shilla Hotel, Samsung Everland, Samsung Life Insurance, Samsung Fire, Samsung Securities, Samsung Card, Samsung Hospital, Samsung Pictures, Samsung Trust, Samsung Sugar, Korea JoongAng Ilbo, etc.

The entire Samsung Group is like a weathered invisible giant ship, carrying every Korean's dream of becoming a strong country, but what we usually see is just its flag flying on the sea.

Three generations of inheritance created the "Samsung Empire"

The establishment and development of Samsung Corporation is inseparable from the talented Lee family.

Samsung founder Lee Byung-chul's advanced awareness laid a very good foundation for the development of Samsung. On March 1, 1938, Lee Byung-chul, the former chairman of Samsung, established the "Samsung Chamber of Commerce" in Daegu, South Korea with 30,000 won. Lee Byung-chul's main business in the early days was to export Korean dried fish, vegetables, fruits, etc. to Beijing and Manchuria, China.

You have to know that in wartime, there was no time to escape, but some people were "not afraid of death" and made war fortunes. Lee Byung-chul was such a person. The first pot of gold he "mined" at the risk of his life paved the way for him to establish Samsung C&T Company and later development in various industries.

Wise leaders often have unique visions. The establishment of Samsung Electronics in 1969 was an important turning point for Samsung. This move was opposed by many people, but Lee Byung-chul judged that the electronics industry would be a prosperous road based on Korea's technology, labor, added value, export expectations and other aspects at that time. Of course, you and I know today that Lee Byung-chul's insight was very sharp and his judgment was very accurate.

The second generation leader of Samsung is Lee Kun-hee, the third son of Lee Byung-chul. In 1988, when Samsung celebrated its 50th anniversary, Lee Kun-hee led Samsung to start a "second venture". In order to abandon the second-rate product image, he said: "Except for my wife and children, everything must change." This shows Lee Kun-hee's determination to reform. In 2001, Samsung Electronics' sales reached 24.7 billion US dollars and its profit was 2.2 billion US dollars. It ranked first in the world in the memory chip and ultra-thin display markets.

Samsung's third-generation leader, now Lee Jae-yong, is the hero who brought Samsung's mobile phone division back to life. After he took office, the Samsung Galaxy S6 had great improvements in chips, screens and appearance, giving Samsung phones a chance to challenge the iPhone again.

The efforts of three generations of the Lee family have made Samsung a success. From the historical development of the Samsung Group, no matter what strategic deployment and development plan, it is inseparable from the advanced business awareness of the three generations of the Lee family. Whether it is Lee Byung-chul's establishment of Samsung Electronics, Lee Kun-hee's "second entrepreneurship" or the rebirth of Samsung's mobile phone business under Lee Jae-yong, the success of the Samsung Group is inseparable from the courage and wisdom of the Lee family.

For ordinary Korean people, becoming a member of Samsung is like passing the civil service exam in China and getting a golden rice bowl. Samsung has created 20% of South Korea's GDP and 1% of jobs, which is also an indelible contribution of the three generations of the Lee family.

Unique family office

The reason why people call Samsung an empire is not only because of its huge size, but also because its strict internal operating system is very much like a miniature country.

Generally, all decisions of a large enterprise are made by the board of directors, but Samsung is different. There is a "secretary office" above the board of directors. The status of the secretary office in the Samsung Group can be described in eight words: "under one person, above ten thousand people". Even the seal of the chairman is kept in the secretary office. The instructions issued by the secretary office are equivalent to the instructions issued by the chairman.

This is a bit like the combination of the eunuchs holding the pen and the eunuchs holding the seal in the Silijian of the Ming Dynasty in my country. They have great power, but most of the eunuchs in the Ming Dynasty have little education, while the secretarial office is composed of industry elites. The chairman formulates strategies according to the long-term interests of the company's development, and the secretarial office makes reasonable resource allocations based on the strategies, which are then implemented by the subsidiaries.

The secretarial office has played a very important role in the development and growth of Samsung. The secretarial office originates from the enterprise, but is also higher than the enterprise. It not only strengthens the family's control over the enterprise, but also handles family affairs.

The investment and operation of public companies often involve dividend distribution for the purpose of maximizing the short-term interests of shareholders, which means that many companies do not invest in long-term interests. Even professional managers will find it difficult to make reasonable decisions in the event of a corporate crisis because of the high returns they can get in the short term. The Samsung Secretariat is the "avatar" of the holding family. Whether in terms of the cross-shareholding structure or the operating structure of the group, the control and executive power of the Samsung Group are highly concentrated in the hands of the chairman.

The secretariat is also the information and decision-making hub of the Samsung Group, with extraordinary information collection capabilities. The outbreak of the Gulf War in the 1990s, the death of Kim Il-sung, and the import of cash registers from Russia were all obtained by the Samsung secretariat in the first place. Its role in business can be seen in the story of the Rothschild family in the 19th century, who relied on their information advantage to make crazy money in the bond market.

When family businesses are still the main assets of the family, the successful inheritance of the business is the foundation of the family's prosperity. Serving both the family and the business, Samsung's secretarial office plays a vital role in the inheritance of family businesses. First of all, it must determine the inheritance of management rights. For the Samsung Group, which has such a complex equity structure, the built-in family office is undoubtedly the best institution to implement the inheritance plan.

The most obvious example is that when Lee Jae-yong inherited Lee Kun-hee's estate, he escaped the inheritance tax of up to 1 trillion won. Through capital operation, he only paid 1.6 billion won in tax. This shows the significance of the "secretary's" careful planning to Samsung. The secretarial office is adept at both political and business circles, and its strong public relations ability created a policy environment that was conducive to Lee Jae-yong's inheritance of Samsung. Through the manipulation of equity transactions, the secretarial office allowed Lee Jae-yong to obtain control of Samsung Everland at a very low cost, laying a solid foundation for taking over the entire Samsung Group.

2. Success is due to family, failure is also due to family

A power struggle comparable to a palace drama

As Samsung became a business empire, the Lee family was also promoted one after another. As we have seen 5,000 years of history, we are very familiar with what happens in the imperial family. The question of whether to establish the eldest son or the most capable son has troubled China for thousands of years, and we have seen too many dramas of patricide and fratricide.

When Samsung's business was booming, it also encountered misfortunes in the family, with endless fights between father and son, brothers, and father and daughter. Lee Byung-chul had three sons and five daughters. Lee Maeng-hee and Lee Sook-hee were the eldest son and the second daughter respectively. The third son was Lee Chang-hee, the second son. Lee Kun-hee was the third son and the seventh among all his brothers and sisters.

Lee Byung-chul began to consider the issue of succession in the mid-1960s. At first, he thought that the three sons would share the business equally, but later, in accordance with tradition, he handed over the management rights to his eldest son, Lee Maeng-hee. However, Lee Maeng-hee's qualifications were limited, and the company was in chaos under his management.

But what made Lee Byung-chul determined to depose the crown prince was the saccharin smuggling incident in 1966. In 1966, Korea Fertilizer, a subsidiary of Samsung, disguised saccharin as building materials and smuggled it. Lee Maeng-hee reported this to the Blue House and wrote a letter to the president, exposing his father's smuggling of saccharin, tax evasion and foreign exchange evasion. The second son, Chang-hee, stepped forward and took the blame for his father, serving a six-month sentence. After this incident, Lee Maeng-hee was deprived of his management rights and was expelled from the family, and the crown prince was deposed.

After the smuggling case, Lee Byung-chul's third son, Lee Kun-hee, took over the "family business" and became the de facto "head" of Samsung. After being in prison for half a year, Lee Chang-hee launched a war to seize power. In 1973, he collected information about his father Lee Byung-chul's "illegal" behavior, wrote a petition and submitted it to the South Korean president, accusing his father, who had taken over Samsung again, of "having illegal assets overseas." After the incident was exposed, Lee Byung-chul used "family law" to imprison Lee Chang-hee.

The eldest son Lee Maeng-hee and the second son Lee Chang-hee, who lost the battle for power, had the same fate as the eighth and fourteenth sons in the TV series "Startling by Each Step". After being kicked out of the house, Lee Maeng-hee never recovered and lived in seclusion in Beijing. After Lee Byung-chul's death, Lee Maeng-hee did not receive a penny of the inheritance. However, his wife Sun Bok-nam allowed his son Lee Jae-hyun to become the president of CJ. However, Lee Kun-hee did not intend to let his sister-in-law and nephew go. Later, when CJ was acquiring Korea Express, Samsung interfered, resulting in CJ's final acquisition at a high price of 2 trillion won.

In fact, when it comes to the internal fighting in the Samsung family, the second daughter Lee Sook-hee has also become a key point, which originated from her marriage to Gu Ja-hak, the third son of Gu In-hui, the founder of LG. Although the marriage was decided by the founders of the two companies while playing golf, Samsung's move into the home appliance industry angered LG's Gu In-hui, leading to a falling out between the two families.

Just when everyone thought the internal fighting in the Samsung family was about to come to an end, in 2012, Lee Maeng-hee and his sister Lee Sook-hee filed an appeal to recover their equity property, involving a sum of $810 million, because they discovered that Lee Byung-chul had a large "hidden inheritance". In February 2013, the Seoul High Court made a first-instance judgment, dismissing Lee Maeng-hee's lawsuit.

Lee Kun-hee has three daughters and one son, son Lee Jae-yong, daughters Lee Boo-jin, Lee Seo-hyun, and Lee Yoon-hyung. After graduating from college, Lee Yoon-hyung went to New York University to study art management. Before going to the United States, she decided to marry her Korean boyfriend of ordinary origin, but her parents opposed it and she suffered from severe depression. In 2005, she committed suicide in her Manhattan apartment with an electric wire. Samsung's spokesperson announced her misfortune as a car accident.

Five years after Lee Yoon-hyung committed suicide, another member of the Lee family chose to commit suicide by jumping off a building. He was Lee Yoon-hyung's cousin, Lee Jae-chan, the son of Lee Chang-hee, the second brother of Lee Kun-hee. According to the police, in 2000, the Shinhan Media run by Lee Jae-chan fell into trouble and was eventually dissolved after being sold and liquidated. After that, Lee Jae-chan had almost no job. It is estimated that he committed suicide by jumping off a building due to financial pressure and depression.

The curse of the leader cannot be broken: interfering in government affairs has become a Samsung tradition

The South Korean Special Prosecutor's Office recently requested the court to arrest Lee Jae-yong for allegedly offering huge bribes. The prosecutors believe that Lee Jae-yong is suspected of being deeply involved in Samsung's bribery of Choi Soon-sil with 43 billion won (about 251 million yuan) on the condition that the government strongly supports the merger of Samsung C&T and Cheil Industries. The prosecutors also believe that Park Geun-hye and Choi Soon-sil have common interests in the economy. After the news came out, Samsung Electronics' closing share price on the day was 1.838 million won, down 0.27%.

Lee Jae-yong's arrest is not the first Samsung leader to be taken away by South Korean prosecutors in history.

In April 2008, Lee Kun-hee was prosecuted for allegedly establishing a secret fund, illegally transferring company management rights and bribing government officials. On August 14, 2009, the Seoul High Court sentenced Lee Kun-hee to three years in prison, suspended for five years, and fined 110 billion won (about 620 million yuan).

But on December 31 of that year, Lee Kun-hee was pardoned by the South Korean president in the name of "helping South Korea bid for the 2018 Winter Olympics." On March 24, 2010, Lee Kun-hee returned to Samsung's management and led Samsung to compete with Apple, and succeeded.

It can be seen that whether it is group interests or family interests, a business empire as huge as the Samsung Group also needs the support of government power. Although it often puts itself at a disadvantage, exchanges are still inevitable and interests are linked and it cannot stay out of it.

The Twilight of the Samsung Empire

In addition to family issues, Samsung Group completely "failed" in a series of tests in 2016, casting a shadow on the future of the Samsung empire.

Samsung's sixth-generation large-screen flagship, which was originally highly anticipated, skipped the number Note6 and was named Note7 in order to block iPhone 7 from all sides.

Samsung originally planned to sell 11 million Note7s by the end of the year, but this plan was aborted by an explosion in South Korea. The situation that followed was even more drastic, from endless reports of explosion accidents, to unprecedented large-scale recalls, to machines marked as safe also joining the army of explosives, to a complete ban by airlines, and finally to the official discontinuation of the Note7, Samsung's "shortest-lived" flagship model withdrew from the stage of history.

As for the cause of the explosion, Samsung held a press conference on the morning of January 23, 2017, and for the first time released the results of the investigation by Samsung and several third-party organizations into the Galaxy Note7 safety incident. The investigation showed that the Note7 explosion had nothing to do with the design of the phone, but was simply caused by the design and production defects of the battery.

Samsung also disclosed information about its battery foundry to clarify the issue of "differential treatment" in China. The Note7 batches sold by Samsung in mainland China are indeed the same as the batches after the replacement in the United States, and both are provided with batteries by ATL, but it turns out that ATL's batteries are just as unsafe as SDI's. It's not that Samsung deliberately deceived mainland consumers.

Unfortunately, this conclusion cannot undo the damage done to Samsung's brand and reputation by the Note 7, which was largely due to Samsung's PR tactics, which were so bad that they could be included in business school textbooks.

When faced with safety incidents involving its flagship products, Samsung's methods of dealing with the situation include monetary silencing, threats of force, ignoring the incident, and of course the so-called "external heating" statement that aroused public anger.

As an East Asian company, Samsung is different from the flamboyant Apple in California, USA. It has always been very low-key and has always been vague in the public's impression. However, this "explosion gate" incident has outlined an image of Samsung that does not care about anything, ignores consumer interests, and is capricious and arrogant in people's minds. It is probably difficult to reverse this in a short period of time, and the far-reaching impact on Samsung's future strategic development will gradually become apparent.

Samsung will have to "pay the debt" for today's mistakes in the future, and industry insiders can see this clearly. When the Samsung Note7 was first announced, it was considered a killer to snatch the iPhone 7's high-end mobile phone market share, but after the "explosion incident", Samsung even began to be compared with Motorola, Nokia, Ericsson, and Kodak. The four-character comment "prosperity and decline" seems to have been destined to be written into Samsung's history.

We mentioned earlier that Samsung's business covers a wide range, and although Samsung Electronics is only one of them, its revenue accounts for more than 90% of the Samsung Group, and its importance is self-evident. However, Samsung Electronics is sinking rapidly at a speed visible to the naked eye.

Samsung executives have always been known for their arrogance. In 1995, the Sun Tianshuai incident, in which an employee was fired for refusing to kneel before a Korean female executive, is still fresh in everyone's memory. Later, the Korean executive poured wine into his shoes and gave it to the dealers as "loyalty wine", which also caused a sensation. However, times have changed, and now Samsung executives have to kneel before Chinese dealers in order to increase orders.

In fact, today's Samsung is very similar to Sony 20 years ago. At that time, Sony was in high spirits and achieved great success in the fields of home appliances, imaging, audio, film and television, games, etc. It even attracted die-hard fans like Steve Jobs. Jobs has publicly expressed many times that he wants to build Apple into a company like Sony. To some extent, Apple has indirectly inherited Sony's mantle.

Jobs and Apple's insight into user experience is admirable, but Sony at the time, like Samsung today, had too many battles to fight and resources to sustain. Moreover, both companies are technology-driven enterprises that are accustomed to showing off and being self-satisfied in product design, but turning a blind eye to user needs.

The common problem of hardware companies is that they often fall into the trap of industrial thinking, which makes them unable to adapt to the Internet era and make it difficult for them to reach the top. On the contrary, companies with software genes such as Amazon, Google, Microsoft, and Apple firmly occupy the upstream of the industry chain.

Samsung is now facing the same problems as Sony did back then, with Apple at the top and small and medium-sized manufacturers challenging it from below. One of the manifestations of Sony's decline is that it has to reduce its product line, such as selling its PC business. Coincidentally, there has been a lot of news recently that Samsung will sell its PC business, and the buyer may be Lenovo, the Chinese junk king.

From all angles, this year is an important year for Samsung, and it is entirely possible that Samsung will never recover from this setback. This is also related to the shortcomings of Samsung's built-in family office.

On the contrary, the family drawbacks of the centralized management of the "Secretary Office"

Unlike American companies that tend to separate ownership and management rights and reduce the risk of excessive asset concentration by diversifying investments, Korean chaebols are more willing to let family members take control of the business and ensure the continuation of the business through a family inheritance model.

It was under this family management model that Lee Kun-hee led Samsung from an imitator of home appliances to a global giant in televisions, smartphones and memory chips. However, with the gradual development of the market economy system and the increasing globalization of the economy, pure family businesses only have limited survival and growth space in certain industries and within a certain range, and cannot become the real protagonists in market competition. When the market changes faster and faster and the competition becomes more and more fierce, the disadvantages of closed family management that is completely controlled by family members become apparent.

Generally speaking, the first is the division of money, honor and disgrace, and ranking among family members, which has become a common problem that hinders the healthy growth of the organization and becomes the fuse for family members to turn against each other. The secretariat plays a core role in the group's strategic decision-making and resource allocation, but it is not responsible for the small and medium shareholders of Samsung's various companies. Therefore, when faced with the choice between the interests of the family and the enterprise, the secretariat will likely be more biased towards the family, which is not conducive to the long-term development of the enterprise.

For example, the grand birthday party of Lee Kun-hee in recent years was publicly included in the schedule of Samsung Group. Famous Korean artists were invited to sing and food was airlifted from abroad. The 1 billion won banquet expenses were all borne by Samsung Group. This lack of transparency and the decision-making system that does not distinguish between public and private inevitably make outsiders question whether the secretariat is centered on the interests of Samsung.

However, due to the highly centralized internal management, it is difficult to attract external talents, and bureaucracy is prevalent. Any investment by subsidiaries, even if it is only a few thousand won, needs to go through a complete process and report layer by layer to the financial group in the secretary's office. For example, Samsung Electro-Mechanics' Portuguese branch once had a 100 billion won embezzlement of public funds. The reason was that the company's internal documents were all in Portuguese, which led to the Korean headquarters making wrong decisions without fully understanding the situation. This just proves that highly centralized power is not conducive to making the best decision according to local conditions.

The drawbacks of centralized management also hinder the initiative and creativity of employees. Lee Kun-hee was aware of this problem as early as 1993. He was worried that the participation of the secretarial office in important decision-making would lead to the disappearance of innovative thinking among the executives and employees of the subsidiary companies. He then carried out targeted reforms to weaken its management rights and limit the secretarial office's interference in the operating decisions of subsidiaries. Unfortunately, the results were minimal, and the structural adjustment department, which represented innovation, still failed to meet his expectations.

Nowadays, for the family-run business model like Samsung, the interests of the family are often given priority in group decision-making and development, which is bound to do more harm than good in the long run. In modern family-run businesses, the family holds ownership, while the management rights are handed over to capable family or non-family members. In other words, the family holds ownership and equity, but the management rights are not necessarily held by family members. This is a trend in modern family businesses, and is relatively more suitable for many large international family-run businesses. The key to taking this path is that ownership and management rights must be separated.

However, the "secretary's office" management that Samsung Group is proud of has become the biggest obstacle to its development, stifling the possibility of Samsung's high-level development.

3. The ups and downs of the Samsung empire provide inspiration for Chinese family businesses

From Lee Byung-chul's establishment of the Samsung Chamber of Commerce, to the rise of the Samsung Empire, to its becoming the world's most well-known Asian brand today, its strength is obvious to all, and its stains are equally difficult to ignore.

Samsung Group has brought infinite glory to the Lee family, and the trajectory of Samsung Group has also been deeply engraved with the Lee family's imprint; but at the same time, the Lee family has suffered repeated disasters because it is at the center of the vortex of power, and the fate of Samsung Group has also become ups and downs due to the power struggles within the Lee family.

Lee Byung-chul and Lee Kun-hee are both rare business geniuses. Although Lee Jae-yong has not been in charge of the group for a long time, he has already demonstrated outstanding talent. Under their leadership, Samsung Group reached its peak, but Lee Maeng-hee, who was mediocre in talent, and Lee Chang-hee, who was extremely jealous, almost destroyed their father's hard work with their own hands. As a built-in family office, the Samsung Group's secretariat brings together elites from various fields and has made an indelible contribution to corporate management and family governance. However, the highly centralized secretariat has long stifled the creativity of its subsidiaries, and has repeatedly put members of the Lee family behind bars because of its failure to distinguish between public and private affairs.

By describing the ups and downs of the Samsung Group over the past 80 years, we also hope to bring some inspiration to Chinese family businesses.

In China, due to various reasons, the first wave of family business started in the late 1970s and early 1980s. According to data provided by the Central United Front Work Department and the All-China Federation of Industry and Commerce, 74% of Chinese business owners are between 40 and 59 years old. In recent years, China's "first generation of rich people" will hand over their wealth to the next generation. Among the 5 million family businesses, more than 3 million have been passed from the first generation to the second generation, but now 2 million have been eliminated in the second generation.

There is an old Chinese saying that "wealth does not last for more than three generations", and the difficulty of passing on family businesses can be imagined. Although family businesses have advantages such as strong cohesion, low communication costs, and strong consistency of interests, they also have disadvantages such as organizational mechanism barriers and difficulty in acquiring talent.

According to statistics, in the United States, the value created by family businesses accounts for 50% of the US GDP, and provides 50% of the US employment opportunities, and the contribution rate to new jobs is as high as 78%. At present, the value created by individual and private economy in China has accounted for 33% of GDP. We have every reason to believe that the management problem of family businesses will become a huge problem that China will face for a long time in the future. The answer to this problem may be found in the family business model abroad.

Samsung's "family office" system is one of them. Family offices are a common management organization used by ultra-high net worth families. However, European and American families tend to separate corporate assets from family wealth and reduce the risk of excessive asset concentration by diversifying investments. The Lee family, on the other hand, built the family office into the Samsung Group and became the power organization of the Samsung Group. However, this configuration method also has inherent problems and has buried considerable management and legal risks for the company. However, Samsung's built-in family office is also a form adopted by Chinese companies that have gradually entered the inheritance process in the past two years (of course, there are exceptions, such as the family offices of Jack Ma and Joseph Tsai).

For China, family offices also have certain Chinese characteristics. In addition to operating the business, due to the long-standing family planning and one-child policy in China, the function of external family offices in dispersing family rights is not very obvious in terms of company inheritance rights.

In contrast, the main problem faced by Chinese family offices is that the only heir is unwilling to take over the parent's business, but would rather invest in family assets. Another similarity between Chinese companies and Samsung is that most of the first-generation entrepreneurs who established private companies mainly took over the original state-owned assets in various ways, and they have been or are still closely entangled with government agencies.

This has also led Chinese entrepreneurs to be more inclined to use built-in family offices as a solution to these problems, making this structure, which is rare in Europe and the United States, more popular among Chinese family businesses.

This structure is very popular among family businesses in East Asia. It can also be said that it is the result of the long-term influence of Confucian culture in the East Asian cultural circle. The deep-rooted family concept has led East Asian entrepreneurs to often put family interests above the interests of the business group. However, in the modern economy, the pros and cons of this model are very obvious.

In contrast, most European and American companies have divested ownership and control, and have hired professional managers to solve decision-making and talent issues. For example, Rockefeller, IBM, Panasonic, Ford, etc., which are all well-known to us, have all taken this route. Rebuilding the equity structure and reducing the proportion of family equity in the process of company development can actually enable the development of the company to break through the limitations of individuals and families. Looking at family businesses in developed countries in Europe and the United States, most of those that have survived and grown have become world-renowned companies.

The building looked so magnificent before it collapsed. In the long river of history, it is still a question whether Samsung can last for a hundred years. But if we focus on a certain period of time, Samsung can indeed be used as a successful sample reference.

As a winner of Toutiao's Qingyun Plan and Baijiahao's Bai+ Plan, the 2019 Baidu Digital Author of the Year, the Baijiahao's Most Popular Author in the Technology Field, the 2019 Sogou Technology and Culture Author, and the 2021 Baijiahao Quarterly Influential Creator, he has won many awards, including the 2013 Sohu Best Industry Media Person, the 2015 China New Media Entrepreneurship Competition Beijing Third Place, the 2015 Guangmang Experience Award, the 2015 China New Media Entrepreneurship Competition Finals Third Place, and the 2018 Baidu Dynamic Annual Powerful Celebrity.