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Samsung Electronics may be facing the risk of long strike that threatens its production and South Korea’s economy, that is after the company has failed to reach for a pay deal with its union after a marathon of government-mediated talks.
The technology company has said that the union wants rigid institutionalization, while the company proposes flexible institutionalization.
“The union is rejecting the company’s proposal for a flexible institutionalization based on business performance and has consistently adhered only to a rigid institutionalization.”
Both rigid and flexible institutionalization represents a continuum in how organizations, laws, or social practices are established, formalized, and adapted over time.
Rigid institutionalization prioritizes on structure, permanency, and strict adherence to rules, while flexible institutionalization emphasizes adaptability, evolving norms, and responsiveness to environmental changes.
Prime Minister Kim Min-seok has instructed the government to help manage the situation “considering the gravity of the impact on the national economy,” and hence asked for proactive support to ensure it doesn’t lead to strike under any circumstances.
Unfortunately, the post-mediation adjustment made by the government failed to materialize.
Samsung, meanwhile, said that they will continue their efforts to prevent the worst-case scenario. “We thank the government and all related parties for their efforts in the mediation.”
The union said the mediation proposal included maintaining the current OPI system based on EVA and keeping 50% cap for both the device solutions and device eXperience divisions.
Also, a plan to pay 12% of the operating profit exceeding the OPI as a special management performance bonus for the DS division, but only if the company achieves the domestic ranking in sales and operating profit in 2026.
However, they think the proposal was unacceptable, and demands abolition of the cap, transparency, and institutionalization.
“We declared a breakdown because we could not accept a one-time proposal,” the said, and announced the intention to seek for injunction against illegal industrial action.
Sources: DZRH, Business Korea, Bilyonaryo
