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Samsung: Multinational Company with Ethical Responsibilities

Discuss about the Samsung Journey to Excellence in Quality.

An ethical dilemma is considered as a problem of decision making between two possible moral crucial, neither of which is certainly acceptable or preferable. The complexity rises out of the situational conflict in which obeying one would result of misbehaving. The essay will reflect the ethical dilemma of Samsung Company and show the two major ethical issues of the company. There are various concepts and theories which can be applicable for managerial ethics. Samsung is the multinational company and it has a powerful influence on South Korea’s economic development, media and politics (Shin & Kim, 2015). The ethical dilemma of Samsung Company is offering bribe by Samsung vice chair Lee Jae Yong and Samsung Galaxy Note 7 product recall. It has been argued by Mitroff, (2016), that Samsung has efficient management and able to resolve the issues within the company but company should move out from the ethical dilemma before ruining the reputation of the company. Company must apply the certain ethical theories for improving the condition of the company and should develop policy which should be applicable on each employee of the company.

Samsung is the multinational Korean company which manufactures number of electronic products. It is a global leader in batteries, TVs, screen technology and designing of chip. Samsung is a company that run with new generation and implements new strategies in its existing products and innovate new products so that organization can fulfill the demand of customers and success to initiate new technology in the world. Ethics play a major role in the company because it directs that what is right or wrong. It is stated in the news paper of The New York Times. (2017), The Samsung Company recently has faced two issues related to ethical dilemma that is corruption practice of offering bribe by Samsung vice chair Lee Jae Yong and former South Korean president. He was effective to run the world’s biggest cell phone maker in place of his ailing father, stood charged of bribery and fraud linking to payoffs to Park confidante who involved in the $250 billion on the behalf of company.He was arrested on corruption charges (Campbell, 2017). Another ethical dilemmaof Samsung is Galaxy Note 7 product recall. Samsung is engaged in a product recall for its phone Galaxy Note 7 when Samsung recalled first time in early September when a battery of the phone exploded and burst into flames. Samsung galaxy Note 7 was the latest creation by Samsung. Samsung has been suspended sales of the phone of Galaxy Note 7 and announced an informal recall. It has been found that a defect is in the manufacturing in the batteries of phone which is being the cause of overheating, resulting in fires and explosions. The phone was caught fire due to its design failure in the battery and manufacturing defect. It is the big ethical dilemma for the Samsung Company because it used lithium-ion batteries containing flammable chemicals which are considered as the separated from the structure of the battery (Resick, Hargis, Shao & Dust, 2013).

Two Major Ethical Issues Faced by Samsung

The impact of this ethical dilemma had bad impact and the entire company had to suffer due to his corruption attitude. The belief of many stakeholders has influenced and they have started to think twice before investing in the company. Samsung, generally, produces mobile phones with new technology and galaxy note 7 phones was expected to overcome the Apple Iphone 7. It was promised by company to replace the battery which would be reliable but it was wrong commitment by Samsung because the replaced battery has caught fire too. Lack of ethics presents poor management and reduces the trust of clients over the company (Clarke & Boersma, 2017). These ethical dilemmas are responsible for losing credibility of Samsung. The corruption was done by the head of the Samsung Company. However, he was arrested and jailed for five years due to involved in corruption. It influenced the reputation of the company. Indeed, it is a massive waste of resources.

However, Samsung had been working on numerous initiatives designed to quell pressure. Ethical theories are beneficial for the company in providing a base while evaluating the ethical content of an act. Utilitarian approach is considered as the normative theory and it shifts further than the scope of one's own interests and takes into description the interests of others. It defines that moral behaviors generates the good environment in the company. As per this approach, the decision maker is predictable to consider the influence of each alternative decision on entire parties and consider one that optimize the content for the huge number of people because it is not vital that actual computations are easy, they can be complex (Hotel, 2014). It is the view which givespreference to the cost and advantages of action taken. It is the ethical consideration which is not following by Samsung Company and it can be seen in the report of news and newspaper that Samsung is highlighted in the headlines of newspaper due to its unethical behaviour. Samsung took step initially related to the ethical dilemma but it is unable to follow the guidelines of utilitarianism. Utility is considered as a tendency of a product to generate the happiness or prevent unhappiness for an individual. Samsung has produced a phone which was not good for the public and enhances the chanceof damage and life loss due to using bad material in battery. It is workable ethical theory and it has been found in the headlines of news that the leader and head of the Samsung Company, Lee Jae-young, was arrested on corruption charges. The ethical dilemma of new generated phone that is Samsung galaxy note 7 recalls, it has shown that Samsung is not able to grab the moral theory of utilitarianism. It has been argued by Jung, (2014),that utilitarianism ethic theory is able to maximize the utility. The stakeholders of the company has affected due to ethical dilemma of Samsung Company.  It is an embarrassing moment when the head of the company did those things which is sound unethical. The management of the company and the user of the products of Samsung company have to face issues because the smart phones are not usually recycled and the loss of phones due to lack of awareness of engineer brought a huge loss for the company

Impact of Ethical Dilemmas on Samsung's Reputation


Deontology is another ethical theory which covers the moral views. It is the ethical theory which refers that people should adhere to their obligations and responsibilities while engaging in the process of decision making especial when ethics are vital at that place. It covers so many positive attributes and it defines that a person should follow obligations to another individual because it is right in the view of ethic theory to uphold one duty. For example, people who follow this theory always keep his promises and do not think to breach the law. A person with deontological theory will generate reliable decision (Crane, &Matten, 2016). This theory is not followed by Samsung Company because the ethical dilemma of Samsung Note 7 recall and bribe case shows that company is not producing or generating products under ethical consideration because the latest product of Samsung is not genuine and got blast. The batteries in some galaxy Note 7 caught fire. However, Samsung recalled the Note 7 and gave promise to exchange the phone with a new model with ne battery which would be examined carefully and it has been found in the report of Dolcourt, (2017), that some replaced phone burned up too. It reflects the unethical behavior of Samsung towards the customer satisfaction. In the view of stakeholders, Samsung did not follow this theory and reduce the trust of them over the company. Another dilemma is also a reflection of not following the ethical behaviour within the company and outside aswell. It is the prior ethic of every company to do not take bribe for wrong thing and Lee Jae-Yong took bribe and got jailed for five years. It shows the unethical behaviour because Mr. Lee is the first head of the Conglomerate and arrested on corruption charges. It is not the only charge which has been put on, along with that illegal transfer of property in to abroad, embezzlement and committing perjury while the hearing of parliamentary.

Yan, Xing, Zhang &  Ma, (2015) argued that the management decision is important for the company because it has the huge impact which can change the environment of the company. As discussed that Samsung Company is involved in various ethical dilemmas from which various stakeholders of the company get influenced. Managerial ethics is considered as an integral set of principles and rules which is dictated by the upper management and able to describe that what is right and what is wrong in an organization. Itrepresents the guideline that facilitates in the time of conflicts. It would be helpful to bring the positive climate for stakeholders. Stakeholders are the key of success for the Samsung Company and it is necessary for the company to take care of the interest of the stakeholders for gaining the advantages and for the growth of the company. It has been stated by Willis, (2014),Managerial ethics are useful to make decision in the context of growth of the company and regulate internal and external behaviour. An ethical dilemma generally brings conflicts between an individual or group and the company (Culiberg&Miheli?, 2016). Samsung is maintaining a set of values and norms that are considered by the managers of the company and constantly referred while working. It will have created a platform of ethical in which manager of the company can operate (Leenes, Palmerini, Koops, Bertolini, Salvini &Lucivero, 2017). The behaviour of managerial ethics are able to address two separated sections such as policies and principles which is helpful or bringing the positive environment in the company of Samsung along with the stakeholders. Principal based ethics defines the importance of fairness and ethical decision at the workplace and involve relevant information related to the boundaries of department.On the other hand policy based managerial ethics defines the interest of conflicts, the corrective response to the stakeholder for their gifts or managing the proprietary information. Ethical decision making is compulsory for the every company because it shows the ethical behaviour of the company. However, there are so many issues has arisen in the company related to ethical but Samsung has shown the positive attitude towards their customers and send the apologetically letter. The company is ready to exchange the product or refund the cash in case of exploded phone. A company of Samsung should change its environment into positive by taking ethical decision because it is important or the company to make the decision in the favor of company and set certain rules and policies which should not breached by anyone.

Utilitarianism: A Missed Opportunity for Samsung

By considering the above statement it shall be noted that such decision making has a major share in achieving the objectives defined by the company. A positive ethical decision making executed by the leader initiates a positive effect on the working of the organization or vice versa (Christianson, 2014). It is the responsibility of the leader to concede them with their rights and duties in the organization with respect to the interest of stakeholders. The role of leader is integral in the organization because it leads an organization in an effective manner. The ethical decision made by ethical leaders will not be breached by employee of the company and should not harm the interest of stakeholders on the basis of ethics. The stakeholders of the company would not get dissatisfied due to effective ethical decision making.


The above mentioned environment has been applied in the management of Samsung Company and it has been found that company is unable to apply such process this in the only reason of facing such ethical dilemmas by Samsung Company. The role of the leader in the organization for making positive environment is bigger because it is the responsibility of the leader to enhance the productivity for being the role model. It shall be noticed in the case of Samsung Company that the main leader and the trust worthy person is involved in the bribe case which is shown that company is involved in the unethical dilemma in depth.  This impacted adversely on the image of the organization in the global environment. Samsung would have saved its dignity and its leader did not get punishment of jailed due to corruption if they had paid attention to the utilitarian and moral view of ethical concept on the initial level, also if the management team of the company anxious with the pride and esteem need of the organization then they would appropriately take actions in response to the situation (Coe & Lee, 2006). Samsung Company neglected the issue which brings the negative environment within the company.

Leadership plays a pivotal role in the organization because it is able to lead the company to achieve the targeted goal within time frame. Leaders are responsible to guide and lead the entire team as per the requirement and the policy of the company.  there are various form of leadership style such as autocratic, democratic, strategic, transformational, cross cultural, team leadership and hierarchal leadership structure. These all have different consequences such as involvement of the employee in the decision making; allow them to share their views and ideas. On the other hand some leadership styles are very strict such as autocratic and transformational which involves the strategy of punishment and reward policy. It has been analyzed that Samsung had the hierarchical leadership structure of Korean Samsung Company. It is the leadership style which defines that the logical organizational structure in which power relates to the position instead of individuals (Vergara, 2014). The hierarchy structure was adopted by Samsung Company for the purpose of providing the clear career path for each employee in the organization. It is able to reflect the managerial potential to perform at a high level of productivity. There are so many advantages and disadvantages of this leadership structure. The pros consideration of hierarchical is that employeeidentified the level of leadership, authority and definite responsibility. It was able topromote the developing employee in the form of specialists (Lawton &Páez, 2015).

Deontology: Upholding Obligations and Responsibilities

It has been analyzed that the role of leadership in the hierarchical leadership structure of Korean Samsung Company in the past was not good. The leadership in hierarchical structure varies synergy in the time of think.gs going well but could probably be devastating if certain component of the process goes away from planned. Samsung Company is inflexible due to its hierarchical structure and work in standardized processes but does not functional in dynamic environments. The leaders were unable to look out the new innovation due to this structure and the employee were feeling pressure while working. In the comparison with past, the leadership structure of Samsung company in hierarchical leadership structure is matured and the leaders are aware towards innovation and leading the team (Clarke, 2013). The main focus of current leaders of Samsung Company to make the employees more loyal towards accomplish the task and look out for the best interest area in their experts


Workable ethical environment is necessary for the company and its growth. It is important for the leaders of the company to give proper attention to the utilitarian ethical concept and moral theory for the improvement in the organization because there are so many customer who have blind trust on the products of the company so it is the responsibility of the company to fulfill the desire of their customer by keeping ethical consideration in mind. Samsung should consider policies management action, resources and reporting for maintaining the ethical environment. It should make ensure by the company of Samsung to all management staff to adhere to the code of ethics (Cohen, 2014). Samsung is involved in various ethical dilemmas and it is vital for the reputation of the company to make ethical environment for not repeating ethical issues. A code of ethics should be maintained in proper manner and along with that the written copy of the code of ethics should be given to the employee and sign from staying they identified the recognition.

It has been concluded that Samsung is the multinational company but it has highlighted in the headlines of the news paper and news channel due to involvement in ethical dilemma. The major two unethical dilemmas has been discussed in this essay that is corruption practice of offering bribe by Samsung vice chair Lee Jae Yong and former South Korean president and Samsung Galaxy Note 7 product recall. It is necessary for the company to maintain its reputation in the view of its customer so that the competitive advantages would not get influenced. A leader of the company should perform in well manner by adapting the effective hierarchical leadership structure and maintain the working ethical environment.

Management Decision: Impact and Responsibility

References

Campbell, C. (2017). Samsung Heir Lee Jae-yong Jailed for Five Years for Corruption. Retrieved on 13th October, 2017, from: https://time.com/4915472/lee-jae-yong-samsung-jailed/.

Christianson, S. A. (2014). The handbook of emotion and memory: Research and theory. Psychology Press.

Clarke, S. (2013). Safety leadership: A meta?analytic review of transformational and transactional leadership styles as antecedents of safety behaviours. Journal of Occupational and Organizational Psychology, 86(1), 22-49.

Clarke, T., &Boersma, M. (2017). The governance of global value chains: unresolved human rights, environmental and ethical dilemmas in the apple supply chain. Journal of Business Ethics, 143(1), 111-131.

Coe, N. M., & Lee, Y. S. (2006). The Strategic Localization of Transnational Retailers: The Case of Samsung?Tesco in South Korea. Economic Geography, 82(1), 61-88.

Cohen, A. D. (2014). Strategies in learning and using a second language.Routledge.

Crane, A., &Matten, D. (2016). Business ethics: Managing corporate citizenship and sustainability in the age of globalization.Oxford University Press.

Culiberg, B., &Miheli?, K. K. (2016). Three ethical frames of reference: insights into Millennials' ethical judgements and intentions in the workplace. Business Ethics: A European Review, 25(1), 94-111.

Dolcourt, J. (2017). Samsung Galaxy Note 7 recall: Here's what happens now. Retrieved on 13th October, 2017, from: https://www.cnet.com/news/samsung-galaxy-note-7-return-exchange-faq/.

Hotel, S. B. (2014).Hyuk Chang of Samsung to give plenary address at 2014 MRS Fall Meeting. MRS BULLETIN, 39.

Jung, S. C. (2014). The analysis of strategic management of samsungelectronics company through the generic value chain model. International Journal of Software Engineering and Its Applications, 8(12), 133-142.

Lawton, A., &Páez, I. (2015).Developing a framework for ethical leadership. Journal of Business Ethics, 130(3), 639-649.

Leenes, R., Palmerini, E., Koops, B. J., Bertolini, A., Salvini, P., &Lucivero, F. (2017). Regulatory challenges of robotics: some guidelines for addressing legal and ethical issues. Law, Innovation and Technology, 9(1), 1-44.

Mitroff, I. I. (2016). Doing What Is Right: The Role of an Applied Ethicist. In Combatting Disruptive Change (pp. 21-31). Palgrave Macmillan US.

Resick, C. J., Hargis, M. B., Shao, P., & Dust, S. B. (2013). Ethical leadership, moral equity judgments, and discretionary workplace behavior. Human Relations, 66(7), 951-972.

Shin, W. S., & Kim, C. (2015).Samsung’s journey to excellence in quality. International Journal of Quality and Service Sciences, 7(2/3), 312-320.

The New York Times.(2017). Lee Jae-yong, Samsung Heir, Is Arrested on Bribery Charges.Retrieved on 13th October, 2017, from: https://www.nytimes.com/2017/02/16/world/asia/korea-samsung-lee-jae-yong.html.

Vergara, E. S. (2014). Characterization of leadership styles by analyzing social networks. Journal of Business, 6(1), 30-42.

Willis, J. E. (2014). Learning analytics and ethics: A framework beyond utilitarianism. Educause Review.

Yan, Z., Xing, M., Zhang, D., & Ma, B. (2015). EXPRS: An extended pagerank method for product feature extraction from online consumer reviews. Information & Management, 52(7), 850-858.

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