Samsung has reported record profits in the last quarter. However, in a shock decision, CEO Kwon Oh-hyun has resigned from his position. Kwon cites the crisis within the company for his move. The heir to the company, Lee Jae-yong was found guilty of embezzlement and corruption last month. Despite this reason, some are calling this a surprise as Samsung seems to be operating smoothly and recorded 12.8 billion dollars in profit last quarter.
When I first saw the article, I was surprised as well. Being the head of a company as large as Samsung while it’s doing so well must be a dream. When I really started to think about it, I realized this would be the perfect time for him to step down. The performance of the company is a result of his work, but from some time ago. The net profit figure that is breaking records now is not because of the state of the company now, but when they made the decisions on what to develop and spend their time on, and now it is paying off. And now that Lee has been found guilty, it could change the executive operations and mindset in the company for the worst. That will heavily impact the performance of Samsung and it’s profits. Samsung will start to struggle; not now, but after Kwon is long gone. I think this is a perfect example of a lagging indicator that can show something entirely different on the surface than what is really happening on the inside, and how that can influence business decisions. Because of this, Kwon will be able to say he brought Samsung up to 12.8 billion dollars in profit, not down from it.
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