The overall tone of the guidelines is pessimistic and cautious, meaning that the group as a whole is expected to reduce investment and hiring by a large margin. For the past few years, Samsung Group had increased investment and employment steadily. But the year ahead, this pattern might be reversed. (Image: Samsung D'light Showroom in Samsung Seocho Town)
SEOUL, Aug 09 (Whowired) -- Samsung Group has set out to make management plans for the next year about a month earlier than previous years. Given the mounting business uncertainties due to the European fiscal crisis and the knock-on effects on emerging economies, the company decided to plan for the near future more thoroughly.
As Korea’s No. 1 company rushes to prepare for adverse external conditions, other conglomerates such as Hyundai Motor, LG, and SK groups are expected to follow suit.
According to industry sources on August 8, Samsung Group had commissioned a study on macroeconomics forecast on exchange rates, oil prices, and economic growth rates of major economies for the next year to its research arm Samsung Economic Research Institute. The institute then submitted the research results to the group management at the end of July, which were sent to group affiliate companies in the form of guidelines.
A high-ranking official of a Samsung group company said, “We have already begun making detailed plans based on the SERI guidelines. By October, we will have 2013 plans for each and every group company.”
According to SERI’s guidelines, the biggest factor for the group next year would be the contagion effect of the European crisis including the Spanish budget problems and the slowdown of the Chinese economic growth.
The overall tone of the guidelines is pessimistic and cautious, meaning that the group as a whole is expected to reduce investment and hiring by a large margin. For the past few years, Samsung Group had increased investment and employment steadily. But the year ahead, this pattern might be reversed.
Still, as a leading conglomerate in Korea Samsung Group has not uttered a word “crisis” or “emergency.” Once Samsung declares a retrenchment mode, it would have serious economy-wide repercussions, for which the government would not allow to happen. Nonetheless, industry observers comment, there would be no other way around for Samsung and other large corporations to opt for an emergency mode for survival if the uncertainties continue until well into next year.
Alastair Kim (firstname.lastname@example.org)
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