1) The article below describes the changes which an Asian company is attempting to bring to its R&D department in order to improve the company's position in the global market.

Read the article and answer the questions follow.

Samsung sows for the future with its garden of delights

By Anna Fifield

Samsung Electronics executives often feel uneasy when they enter the company's 'value innova- tion programme' (VIP) centre south of Seoul, where grass sprouts from the ceilings, the doors are covered with funfair mirrors and the walls covered with chalk drawings of ideas.

South Korean offices typically feature grey com- puters on grey desks inside grey walls, where workers adhere to strict Confucian traditions and would never dream of questioning a superior or making wacky suggestions. But here, in the Samsung idea incubator, they are encouraged to put on Viking and bumblebee hats, lie on the floor and throw round ideas without regard for rank, play with Elmo toys and inflatable dolphins, all the while taking polaroids of themselves. Such an environment might be commonplace in the information technology companies of California but it is revolutionary in Korea.

'Some people come here because their manager tells them to, and when they arrive they say "I can't work in this environment"', says Chung Sue-young, one of the 'VIP' centre coordinators. 'The engineers immediately start tidying up and stacking all the magazines in date order, the R&D people only want to talk with Americans, and the designers just stand there and don't say anything', she says.

But this kind of change is crucial as Samsung, which has made a remarkable transformation from copycat manufacturer to become Asia's most valuable technology company, now finds itself in something of a rut. Many of its products - such as semiconductors and flat screens - are becoming

commodities, and it has yet to produce a killer product, as Sony did with the Walkman and Apple with the iPod.

So Samsung is increasingly sending employees to the VIP centre for weeks at a time, encourag- ing them to think outside the box, and outside the office. They go to department stores to watch people shopping, or to museums to think about space and light.

'In our Samsung culture, it looks like the people here are slacking off', Ms Chung explains in one of the VIP centre rooms, which is incongruously housed in a run-down old dormitory at its main research and development centre. 'But there are more and more people who recognize the value of creative slacking', she adds.

Chairman Lee Kun-hee recognizes the need for creativity if Samsung is going to make the next leap forward.

'An unexpected but tremendously rapid change will occur by 2010', he said last year at the Samsung Electronics research centre. 'In all areas from design, marketing and R&D, we have to be prepared for the future by implementing creative management schemes.'

The value innovation programme - which essen- tially boils down to providing the things that a customer wants, at the lowest cost - is central to that drive. It was here that three engineers, a designer and a marketing specialist came up with the 'Bordeaux' flat-screen television. With its focus on design - the speakers are hidden and the lines are supposed to be reminiscent of a wine glass - the Bordeaux became Samsung's first LCD television to sell more than 1m units.

'People often complain that the TV takes up lots of space and that it doesn't go with the other furniture. What the Bordeaux team did was simply to sit down and say, we're going to make the kind of pretty TV that customers want', Ms Chung explains. 'This is common sense but when you work with technology and are very pro- duct oriented, sometimes you are too specialist to see these kinds of things', she says.

While the VIP centre is a kind of hotbed for creative thinking, Samsung is trying to develop a more creative culture across its R&D centre, which is now home to more than 39,000 employees.

'Traditionally we have been workaholics, spend- ing very long hours in the office, but now the emphasis is moving to efficiency and the number of people coming in at weekends has drastically

decreased', says Eugene Pak, vice-president of the technology planning team.

In Mr Pak's department, executives are gather- ing for morning '10-minute talks', chatting about things such as their hobbies or current events - topics that would be water-cooler talk in other countries but which could be deemed frivolous here.

Samsung is also changing its recruiting priorities.

'Before, we looked for loyalty but these days we are increasingly also looking for creativity and a knack for doing something unique, something a little bit crazy. We now look for people that have that extra dimension', Mr Pak says.

'We have good talent but we are maybe 2 per cent short - we just need the extra push to make it to the top', he says. 'We need that extra insight that I think we can get from bringing people from abroad to help change the corporate culture.'

Source: adapted from 'Samsung sows for the future with its garden of delights', Financial Times, 4/1/2008 (Fifield, A.), The Financial Times Ltd. All Rights Reserved.

Questions

1. How does the environment of the 'idea incubator' encourage those working there to change their behaviour?

2. Using the Competing Values framework outlined in Concept 10.1, describe the changes that Samsung is attempting to bring to the R&D department.

3. The author of the article refers to Samsung as having once been a 'copy-cat' manufacturer. To what extent to you consider the creation of the VIP centre to be an example of 'copy-cat' behaviour?