Samsung Company: Leadership and Business Ethics

Samsung’s Perspective on Business Ethics

Despite the fact that the current corporate and business environment calls for the increased attention in terms of addressing ethical conduct, it is very uncommon for the management to include any information about ethics programs or general ethical conduct in the corporate responsibility reports (Webley, Basran, Haywards, & Harris, 2010, p. 16). This occurs in cases when the business interests of a company do not coincide with the ethical values expressed by the environment, like in the example with Samsung mobile company that produced the phones from unlawfully sourced tin, the sourcing of which heavily depends on child labor (Hodal, 2013, para. 1). Despite the fact that the tin was cheap and durable, its sourcing did not go well with the ethical conduct of the company.

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Since Samsung is an Asian corporation, the responsibility for ethical conduct in business is in the hands of the company’s top management (Crane & Matten, 2010, p. 26). Therefore, the decision to source tin in the area that heavily relies on the usage of child labor can be attributed to the company’s management. The most likely perspective on business is reducing the costs associated with fair labor and employing unethical methods of sourcing necessary materials for manufacturing products.

Apart from monitoring the behavior of employees in terms of ethical conduct, the top corporate managers are first of all responsible for upholding the ethical standards in terms of their own decisions and actions (Manager’s role in ethical conduct, n.d., para. 10).

The role and responsibilities of a top manager in Samsung should include being aware of where and how necessary materials are being sourced in order to avoid any misunderstandings with partners and consumers. Therefore, the issue with sourcing tin using child labor should be addressed in accordance with general business ethics principles, encouraging other companies to also reconsider their ethical conduct, as in the example with Apple, Inc.

In Asia, governments and corporations are the main actors in establishing business ethics (Crane & Matten, 2010, p. 26). Despite the fact that there is a view that “business should set its own ethics agenda, not wait for the government to set one for it” (Foster, 2015, para. 1), governments in Asian countries do play a significant role in establishing the core principles of business ethics for businesses. Without the structure and rules that will be made by governments into one framework, some companies will not be able to function efficiently and ethically. Under the condition without any ethical rules, businesses will turn into bets where no one will tell the truth about ethical value since the main goal will be to gain profit (Fernando, 2010, p. 24).

Therefore, the government should make sure that the interests of key business stakeholders are protected through the monitoring of companies like Samsung that exhibited signs of unethical conduct. To become proficient in the area of ethical conduct, Samsung should cooperate with independent regulators that will perform assessments of the company’s ethical conduct in accordance with the standards set by the government (Fernando, 2010, p. 18).

On the other hand, it is important for Samsung to develop a new code of ethical conduct on the basis of reviewing other sets of conduct guidelines used by multinational companies. After the review, Samsung’s management should include the interest of six business stakeholders in the new code of conduct: the public, partners, customers, employees, investors, and competitors (Paine, Deshpande, Margolis, & Bettcher, 2005, p. 125).

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Samsung’s Corporate Social Responsibility and the Role of Leaders

The concept of corporate social responsibility (CSR) directly relates to the case with Samsung since it relates to contributing to the well-being of the community on which a company depends (Rangan, Chase, & Karim, 2015, para. 1). Therefore, Samsung’s leaders should become the main actors in promoting CSR in the company. It is also advised for the company to have a separated definition of the corporate social responsibility based on its ambitions and the stage of development so that there is an individualized approach towards the concept, rather than employing a “one solution fits all” (Smith, 2011, p. 3).

Corporate social responsibility is made up of different components, however, the most important components regarding the Samsung case are legal responsibility, ethical responsibility, and philanthropic responsibility. Legal responsibilities are required by the society for the company to follow the laws on employee protection, or, for example, environment safety sustainability. Ethical responsibilities are expected of the business by society in order to avoid any questionable practices, like, for example, the usage of child labor for tin mining. Lastly, philanthropic responsibilities are not required but are expected of companies so that they provide support for the community or engage in volunteering activities (Carroll & Buchholtz, 2014, p. 35).

However, it is important to mention that a business should not follow one responsibility to a larger extent, following others to a lesser extent. To maintain a profitable and respectable business, companies like Samsung should act both within the boundaries of the law at the same time with the boundaries of ethical behavior (Brusseau, 2012, p. 664).

To promote CSR and to address ethical issues within company leaders or managers should, first of all, recognize the connections that exist between corporate social responsibility and the human resources department. Legal or ethical responsibilities in Samsung will only be met if the human resources department employs all possible methods for teaching and training employees on the basic principles of corporate responsibility (Fenwick & Bierema, 2008, p. 29).

Therefore, by becoming leaders for employees in terms of guiding the principles of CSR the company’s management will be able to effectively communicate the code of ethics and resolve the current ethics problems inside the company.

Due to the fact that the ethics issue associated with Samsung related to the unethical although circumstantial usage of child labor, the company’s management should start investing time and efforts into broadening its role in improving the living standards in the area where it sources materials. For example, the company may start generating more highly paid jobs and offer help for the communities in need, promoting high ethical and philanthropical corporate social responsibilities standards (Heath & Ni, 2008, para. 13).

Lastly, for addressing the emerged ethical issue it is important for Samsung’s management to keep the business affairs and especially labor-related processes as transparent as possible. The case with the investigation of Samsung’s supply chain showed that the company did not have enough information about the sources of tin supply, which resulted in a scandal on the basis of unethical conduct. Therefore, the company’s leaders should continue a transparent and fair investigation of its supply chain in order to avoid similar issues in the future.

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References

Brusseau, J. (2012). Business ethics. Web.

Carroll, A., & Buchholtz, A. (2014). Business and society: Ethics, sustainability, and stakeholder management. Stamford, CT: Cengage Learning.

Crane, A., & Matten, D. (2010). Business ethics. Oxford, UK: Oxford University Press.

Fenwick, T., & Bierema, L. (2008). Corporate social responsibility: Issues for human resource development professionals. International Journal of Training and Development, 12(1), 24-35.

Fernando, A. (2010). Business ethics and corporate governance. New Delhi, India: Dorling Kindersley.

Foster, P. (2015). What is the government’s role in business ethics? Web.

Heath, R., & Ni, L. (2008). Corporate social responsibility. Web.

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Hodal, K. (2013). Samsung admits its phone may contain tin from area mined by children. Web.

Manager’s role in ethical conduct. (n.d.). Web.

Paine, L., Deshpande, R., Margolis, J., & Bettcher, K. (2005). Up to code. Does your company’s conduct meet world-class standards? Web.

Rangan, K., Chase, L., & Karim. (2015). The truth about CSR. Web.

Smith, R. (2011). Defining corporate social responsibility: A systems approach for socially responsible capitalism. Web.

Webley, S., Basran, S., Hayward, A., & Harris, D. (2010). Corporate ethics policies and programs. UK and Continental Europe survey 2010. London, UK: Institute of Business Ethics.

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