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Marketing Department Audit Sees Senior Samsung Executives Quit, Others Sacked

Samsung Electronics who are known for revolving door management is facing a new drama after an audit of the Companies marketing department, resulted in several people quitting and other being sacked after an investigation into whether employees violated company policies in their dealings with business partners and the media.

The investigation has snared the US head of marketing operations in the USA, Marc Mathieu the U.S. marketing chief, and Jay Altschuler, vice president of media and partnerships.

Some Samsung staffers were told on March 15 that they were let go for cause and without severance following the audit.

Several of those people are now claiming that they have been treated unfairly, and that Samsung’s findings in some cases were trivial and didn’t merit its actions.

As part of the investigation auditors probed for more than a month the actions of the Interpublic Group of Cos’s PMK-BNC and R/GA as well as independent PR agency Edelman who handle Samsung PR operations in Australia and Publicis Groupe SA’s media agency, according to people who have left the Korean Company.

Some are now claiming that Samsung executives will now call for a review of marketing suppliers.

The audit included an investigation into agency operations and practices, such as funding and management of some projects.

Tim Baxter, president and chief executive of Samsung Electronics North America, has also announced that he is quitting the Company. The face behind Samsung’s CES presentations Baxter announced his exit from the Company in June weeks after CES 2019 and before the audit of marketing activities.

The layoffs and the internal probe come amid broader changes at the company, including the recent departure of top U.S. marketing executives, as well as other senior executives outside the marketing group.

Samsung Australia works closely with the US marketing group and the Companies Korean marketing operation.

Samsung’s internal audit looked, in part, at dealings between its marketing staff and business partners such as media companies and ad agencies, according to the people familiar with the matter.

At Samsung it is common for the Company to entertain buyers and senior executives at the likes of Harvey Norman, Telstra, Optus, JB Hi Fi as well as key partners with free overseas trips as well as trips to sporting and entertainment events.

The Company also fly’s key and often the same journalists around the world flying them business class and putting them up in five-star hotels.

such dealings can pose a conflict of interest that calls into question whether marketers are steering resources to the best-performing marketing channels while also being accused of “buying off” journalists with trips to places such as Las Vegas, Barcelona, San Francisco, London and New York industry executives say.

In an emailed statement after news of the investigation emerged Samsung said “Recently, organization changes have been made to our marketing division,”

“We have a strong management team in the U.S. who remains focused on continuing to provide our customers in North America with the products and experiences they have come to expect of the Samsung brand.”

In recent months, Samsung appointed a new global marketing head, Stephanie Choi, at its mobile division.

Outside of the marketing group, there have been other significant executive exits in the U.S., according to the people familiar with the matter. Samsung declined to comment on moves of the other executives.

The Wall Street Journal said that the company faces headwinds as smartphone sales have fallen in recent quarters, including a 4.9% decline during the final three months of last year, according to International Data Corp (IDC). For the quarter that ended Dec. 31, Samsung’s operating profit for its mobile division declined by nearly one-third, while semiconductors’ operating profit fell 29%.

In Australia several Companies are investigating the relationship between key staff and marketing suppliers following the recent charging of The director of a company at the centre of an alleged $40 million corporate fraud scandal involving the National Australia Bank and an outside supplier.

The former Chief Of Staff to the former NAB CEO has been charged with more than 50 bribery and corruption offences.

Also charged is Helen Rosamond, 43, the owner and director of Human Group, an events and human resources company that has held lucrative contracts with NAB’s marketing department going back 12 years and worth almost $120 million.

At the centre of the police investigation is the relationship between Ms Rosamond and Rosemary Rogers the Chief Of Staff to NAB’s former CEO. The investigation was triggered by a whistle-blower referral within NAB last year who questioned marketing expenditure.

Information gleaned from the report was referred to the financial crimes squad in February last year, prompting the formation of Strike Force Napthali who recently charged both women.

The bribes allegedly included a four-night trip for 13 people from Melbourne to Sydney costing more than $76,000, a one-month trip to the US for eight people which cost $485,000, multiple trips to the Emirates resort at Wolgan Valley, prepaid credit cards, private helicopter transfers and a $46,000 boat trip.

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