Lee Byung-chul: Samsung's Visionary Founder

Starting as a small trading company in 1938, Samsung founder, Lee Byung-chul, set out an ambitious vision for his company. Throughout the years, Samsung has grown from its modest beginnings–dealing in dried fish and noodles–to become a global conglomerate with interests in electronics, shipbuilding, construction, chemicals, semiconductors, and more. Join us as we explore the life of Samsung's founder and how his company became a symbol of South Korea's transformation.

• Japanese influence: Lee's exposure to modern business practices during his studies in Japan played a key role in inspiring him to start Samsung.

• Difficulties and opportunities: Samsung capitalized on the economic chaos that World War II and the Korean War caused.

• Leadership style: Lee was an autocratic, perfectionist leader who instilled a culture of excellence throughout Samsung.

Lee Byung-chul was born on February 12, 1910, in Uiryeong, a small village in the Gyeongsangnam-do province of South Korea. Lee came from a wealthy land-owning family which allowed him to pursue education, a rarity in early 20th-century Korea.

After completing his early education, Lee moved to Tokyo to continue his studies at Waseda University. However, Lee's time in Japan and his economics studies were abruptly cut short as his father passed away, forcing him to return home to manage the family's estates.

Shortly after returning, Lee decided to venture into business. He was heavily influenced by his time in Japan, where he was exposed to modern business practices and the industrial advancements of the time. In 1938, Lee founded Samsung Sanghoe. The word “Samsung” translates to “three stars” in Korean, representing Lee's vision for the company: to shine like stars in the sky – large, strong, and eternally shining.

Looking beyond personal ambitions, Lee's vision for Samsung was not just to build a successful business but to contribute to the economic development of Korea. At the time, Korea was a struggling colony under Japanese rule, and the early years of Samsung coincided with Japan's imperialistic ambitions and involvement in World War II.

This turbulent period deepened Lee's commitment to his country, fueling his desire to see South Korea rise from the devastation of war and colonialism. His ambition was to build Samsung into a company that would play a key role in that transformation.

Samsung began as a small, local trading company in Daegu dealing in dried fish, groceries, and noodles. Its founding in 1938 came at a delicate time, with more than a decade of uncertainty ahead. The outbreak of World War II presented significant challenges for Samsung, as the oppressive colonial regime imposed strict controls on local businesses, with many having to contribute to the Japanese war effort.

The end of World War II and the eventual outbreak of the Korean War in 1950 posed new sets of challenges for Lee Byung-chul and his company. The Korean War devastated the peninsula, with significant loss of life, destruction of infrastructure, and the economy in ruins. Lee decided to relocate Samsung's headquarters to Busan to avoid the conflict, where the company started its diversification journey.

The Japanese departure had left a vacuum in the economy and Lee was quick to capitalize during this transitional period by shifting Samsung's focus to sugar refining. In 1953, he established Cheil Sugar Manufacturing, Korea's first sugar refinery. The timing was perfect as basic goods like sugar were in high demand, allowing Lee to play a crucial role in the nation's economic recovery.

This venture created a stable revenue stream and enabled Samsung to diversify further into textiles, shipbuilding, and ultimately, electronics. The growth of Lee's South Korean chaebol (family-run conglomerate) had certainly taken off.

After successfully diversifying into the textile industry and entering the export market, Samsung deepened its involvement in manufacturing, setting the stage for expansion into more capital-intensive industries.

The 1960s were transformative for Samsung, driven by South Korea's rapid industrialization under President Park Chung-hee, who encouraged domestic production and export-driven growth. In 1963, Lee entered the chemical industry and finally, in 1969, Samsung Electronics was founded. This marked the beginning of what would eventually become the company's most globally recognized and profitable division.

With a history of successful diversification behind him, Lee boldly shifted Samsung's focus toward electronics, recognizing the potential of technology. This decision initially faced skepticism—not because the sector lacked growth prospects, but due to the fierce competition from the established Western and Japanese companies dominating the market.

Samsung Electronics' first product was a black-and-white television, launched in 1970. An incident at this exact moment was very telling of Lee's autocratic leadership style. As the first batch of the black-and-white televisions were ready for release, Lee personally insisted on inspecting the quality of the products. Upon finding defects, he ordered the entire batch destroyed in front of the employees. This dramatic action underscored his perfectionist commitment to quality and sent a powerful message that only the highest standards would be acceptable at Samsung. This incident is often cited as a foundational moment in Samsung's culture of excellence.

At the time, South Korea was still heavily reliant on Japanese technology, and Samsung was no exception, importing components and technology to start its production line. Throughout the 1970s, the company expanded its product range to include home appliances such as washing machines and refrigerators, and as its offering grew its reliance on importing components and technology decreased.

During its first decade, Samsung Electronics experienced rapid growth, eventually becoming the cornerstone of the chaebol. The company's success in consumer electronics laid the foundation for its expansion into other high-tech industries, including semiconductors, telecommunications, and information technology. Lee Byung-chul's visionary leadership and willingness to take calculated risks were instrumental in this success. Strategic diversification and substantial investments in research and development were crucial in positioning Samsung as a global leader across multiple high-tech sectors.

Further reading: The 10 Largest Semiconductor Companies in the World

Lee Byung-Chul's leadership was characterized by an autocratic style, which was typical of the culture and era. As a perfectionist, Lee set exceptionally high standards for his employees and insisted on the highest levels of quality and efficiency. His demanding leadership style was aligned with the ambitious vision he set out for the company from the start. By the time of his death in 1987, Samsung had grown from a small trading company in Daegu into not only South Korea but one of the world's, largest and most successful conglomerates. Lee's dream had certainly come true: Samsungs success had become a symbol of his country's resilience and progress.