Samsung's Bribery Charges and Corporate Governance: A Business Report

This business report explores Samsung's bribery charges and corporate governance practices, analyzing the impact on internal and external stakeholders. It also discusses normative and descriptive theories of business ethics.

Business
Report

Executive Summary:-
This project is based upon Samsung as being multinational
conglomerate company that is capable to discover broad range of
electronics that includes smart phones, tablets, TVs, home
appliances, etc. The current Chief Executive Officer of Samsung
electronics is Kwon Oh-hyun was appointed in October, 2017. The
project elaborates Samsung’s Bribery Charges on its key person of
Jay Lee-Yong as being de facto leader came at the end of special
prosecutor’s 90-day investigation for corruption charges. This
project further explains corporate governance on the basis of
Director’s Contracts and remuneration, wages and rewards, role of
Chairman and Committee structure. It further described the most
relevant normative and descriptive theories of business ethics. This
project additionally examines internal and external stakeholders for
their ethical and unethical practices.
ADD A FOOTER

 Table of Contents
 INTRODUCTION
 PART 1
 PART 2
 PART 3
 CONCLUSION
 RECOMMENDATIONS
 REFERENCES
Table of content

Business is also termed as an enterprise, property, entity and property which consist of entrepreneurs that
have the capability to develop innovative ideas by analysing mission and vision of an organization. The
organization selected for this project is Samsung as being multinational conglomerate company that is
capable to discover broad range of electronics that includes smart phones, tablets, TVs, home appliances,
etc. The current Chief Executive Officer of Samsung electronics is Kwon Oh-hyun was appointed in
October, 2017. This project describes the corporate governance with the application of normative and
descriptive theories for focusing on legal and lawful decisions that leads to attempt and perform right
actions from good experiences. Additionally, it analyze ethical and unethical practices that affects internal
and external stakeholders of the company.
Introduction

Business is described as an occupation or trade with the procedure of manufacturing or collecting raw
materials to produce the finished goods and services that is capable to meet requirements of customers.
This activity focus on providing high level of satisfaction to their end-users by supplying qualitative
products that fulfils their needs, desire and wants. Managers of Samsung electronics also establish their
products such as smart phones, tablets, etc., to achieve the demand of their customers with latest
electronic gadgets.
PART 1

21/03/20 18:54:37
ADD A FOOTER
Samsung Bribery Charges:- The Samsung electronics co
vice-president (Jay Lee) was sentenced to five years in prison
as being identified as the criminal. The crime committed from
him was bribery, embezzlement, capital flight and perjury
charges. The confirmation of Jay Lee-Yong as being de facto
leader came at the end of special prosecutor’s 90-day
investigation for corruption charges. Mr. Lee was arrested on
17th February as dramatic development in South Korea’s
struggle to end collusive relation between government and
family-conglomerate in economic sector. He was bailed
within six months from prison. Samsung is accused of giving
donations to non-profit foundations operated by Choi Soon-
sil, a friend of Ms Park, in exchange of government favours.
Lee was found guilty in August 2017 on charges including
bribery and embezzlement and received a five-year jail term.

Corporate Governance:- This is the structure of rules and regulations, policies, procedures, etc., which
directs and manage the actions performed in company must be legally approved. The Board of
Directors of an organisation are bound to focus on corporate governance by following the laws and
controlling business operations through government regulations. The corporate governance
encompasses intrinsic and extrinsic factors that affect the interest of company stakeholders which
involve customers, suppliers, government regulators, management, etc.
The UK corporate governance code sets out expected standards of good practices which includes board
leadership and company purpose, division of responsibilities, composition, succession, audit, risk
control and remuneration are described with reference to managers of Samsung electronics are as
follows:-:-
Cont..…

• Director’s Contracts and remuneration:- It refers as the procedure in which mid-career contract
directors of 5-9 years experience earns an average of $112,527 based on 73 salaries whereas the
experienced contract directors of 10-19 years earns an average compensation of $124,597 based on
210 salaries. The remuneration of directors for Samsung includes corporate entities, provision of
security or payment guarantees, conclusion of loan governance, etc.
• Wages and rewards:- This process focus on motivating employees to perform their actions with the
motive to achieve individual and organisational goal. Managers of Samsung encourage their workers
to complete their task with engagement and involvement by developing employee relation. It focuses
on enhancing co-ordination through building trust and faith among one another to understand and
share views.
Continue…

• Role of Chairman:- The duty and responsibility of chairman is to promote business by planning
through strategic decision making procedure that generate value for shareholders and contribute in wider
society. Managers of Samsung electronics ensure that the company purpose, value and strategy are
properly aligned that creates opportunity for growth and sustainability in global market. This further
develops a framework to direct and control the actions of workforce by eliminating errors which are to be
solved through corrective measures by effective engagement with stakeholders and shareholders.
• Committee Structure:- It is referred to the division of responsibilities, composition, succession
and evaluation which focus on decentralising the activities of business. Managers of Samsung achieve
their target of producing electronics products by dividing their works in various departments that result in
specialisation as the work is distributed in accordance with the capability of workers. This improves
effectiveness of workforce as they are trained by being aware for importance of their work that will lead
to achieve success in perfect competition market by competing with rivalries.
Cont..

 The most relevant normative and descriptive theories of business ethics are mentioned below:-
 Normative:- This theory focus on ethical actions of business in developing strategic decision-making
that describes prescriptive functions which help people to maximise their expected utility of outcomes.
The main purpose of this theory is to serve rational standards for the actions performed by workers that
are to be compared with their actual behaviour while performing it. Managers of Samsung electronics
implement this theory for investigating the set of questions when compared to rational standard. This
further refers as social, political and philosophical principles of business which organise ideas to
develop relation between media and society. The various types of normative theories are described
with reference to managers of Samsung are as follows:-
PART 2

 • Deontology:- It is the part of normative ethical theory which states that performance of worker
must be already evaluated in accordance with rules and regulations that leads to distinguish between
right and wrong action. This theory was introduced by Immanuel Kant which emphasize to judge
action by their result, as it does not focus on cost and benefits of situation. Managers of Samsung can
use this theory as to analyse the consequences of steal, cheating, lying, etc., that affects the capability
of business to achieve success efficiently. The Samsung Company is adversely affected by unethical
action of its co-vice president which is arrested for Samsung Bribery charge as exporting it with illegal
actions. `
Cont....

• Virtue Ethics:- This ethical theory emphasize on people of business to perform their task with
virtue of mind, character and sense of honesty. It describes the nature and definition of good qualitative
workers that analyse problems and focus on consequences of action. It was introduced by Aristotle who
declares that various virtuous persons have ideal characteristics traits such as integrity, honesty, loyalty,
responsibility, humility, etc. Managers of Samsung can use this theory as to identify the virtue of their
employees which increase loyalty and support of business to achieve its goal. Managers of Samsung are
adversely affected by the virtue of their co-vice president as being disloyal, distrust, and irresponsible for
the actions being performed by him.
Conclusion

Ethical Egoism:- It refers as the normative ethical position of business that develop moral for agents to act and
complete task with their own self-interest. This theory promotes for one’s own good in accordance with morality that
is considered as perspective doctrine which result in self benefit by developing confidence and self-actualisation. The
managers of Samsung use this theory as it results in development of individual and organisational goals and
objectives. The Samsung managers are favourably affected by this theory as people perform their actions with
motivation that result in monetary and non-monetary rewards such as incentives, promotion, performance appraisal,
etc.
• Utilitarianism:- This is defined as a moral theory that advocates actions and promote overall happiness or
pleasure for an individual that develops the enthusiasm of person to perform its task with more encouragement. It is
the philosophy that directs social, economical, political decisions that aims for betterment of society. The managers of
Samsung use this theory as it develops opportunity for growth and stability of business by developing its competitive
strategies to compete with rivalries such as Apple for designing their own specialised product. The Samsung
managers are favourably affected as they motivates their society members to perform action by creating job
opportunities and this positively impact in developing customer relationship management for support and loyalty of
their buyers.

21/03/20 18:54:37
Descriptive:- It is the theory which suggest that how ethical decisions are made in business which
are legal in front of rules and regulations for United kingdom by analysing and experiencing
between right and wrong actions of business. Managers of Samsung seek implement this theory as
to understand rationality by describing and capturing statistical terms for analysing decisions of
people. The managers of Samsung describe specific dimensions and characteristics of individuals,
groups, situations and events with discrete observations. These descriptive theories are explained
with reference to managers of Samsung are as follows:-

21/03/20 18:54:37
Individual factors:- This includes health professionals which consists of
negative attitude while performing their actions in business. This result in
doubt of effectiveness, fearing their patients for health and privacy, preferring
traditional methods of care, telemedicine to ensure wages of workers.
Managers of Samsung are adversely affected by the negative attitude of their
employees because of health and safety issues that affect the stability of
business in achieving organisational goal. The Samsung managers focus on
the nature and health of their workers for perceiving telemedicine as taking
more time and increasing their work load that delay in goal accomplishment.

21/03/20 18:54:37
• Situational factors:- It broadly refers as external factors of business that occurs from outside
of business and not from an individual. This situational factor includes maturity level of followers,
the organisation structure and culture, goals to be achieved, etc. Managers of Samsung focus on
situational elements through consumer decision making procedure for physiological and social
influences. The managers of Samsung faces various challenges in business such as unethical
actions imposed by Jay Lee that affects the brand image and reputation of business and negatively
impact on consumption of its electronic products.

21/03/20 18:54:37
ADD A FOOTER
Case –Study Method:- This research involves in-depth
study of individual to test null and alternative hypothesis
phenomena. It should not be used to determine cause and
effect, as this method have limited use for making
accurate predictions. Managers of Samsung focus on this
method as to predict and analyse the person deeply for
which further resulted in drawbacks of business.

21/03/20 18:54:37
ADD A FOOTER
•Survey Methods:- It is the research method as being part of ethical theory
which determining the ethical actions performed to achieve success or not.
The Samsung managers are adversely impacted for undoubtedly trusting
their co-vice president focus on open-ended questions as the individual are
bound to give answer for their prescribed question with thinking skills. This
creates and develops the capability of individual to develop their innovative
ideas and to decide the corrective measures which must be applicable in
business. Managers of Samsung implement this method as to analyse the
personal motive of performing their actions for business. The Samsung
managers are negatively impacted by Jay Lee as his motive was unethical
and adversely affected the business in accomplishment of organisational
goals and objectives.

21/03/20 18:54:37
PART 3
Internal stakeholders:- This is described as the intrinsic factors of business which
includes employees, managers, board of directors, investors, etc. The role of internal
stakeholders develops interest in achievement of success as they will be benefited by
financial investment. Managers of Samsung focus on their internal stakeholders who
develop management, marketing experts, designers, purchasing, manufacturing, etc.
External Stakeholders:- It refers as the extrinsic atmosphere of business that involves
consumers, regulators, investors, suppliers, etc. The role of external stakeholders develops
opinions for direction of company in order to provide satisfaction to their target market by
supplying them qualitative products. Managers of Samsung focus on their external
stakeholders as to analyse the needs, desire and wants of their customers and to supply
improved quality of products that result in higher satisfaction which maximise revenue and
profitability ratios.

21/03/20 18:54:37
Ethical practices:- This is legal and lawful practices which are governed by the government of
United Kingdom that focus on ethical values which provides develops moral of business by
reducing risk of unethical practices. It includes autonomy, beneficence, justice, veracity,
confidential, etc., which result in accomplishment of organisation goals and objectives efficiently.
Managers of Samsung impose these ethical actions as it creates opportunity for stability in perfect
competition market by providing high satisfaction to their target market.
Unethical practices:- It is described as illegal actions of business performed to achieve success
efficiently with wrong actions that are unlawful and impose bad image and reputation in front of
potential consumers. This does not involve ethics, norms and code of conduct that affect the
business adversely which result in less consumption of its finished goods and services. Managers of
Samsung are adversely affected by the unethical practice done by its co-vice president which is
arrested by prisoners for Samsung bribery charges.

21/03/20 18:54:37
The comparison between ethical and unethical practices of business is explained with reference to
managers of Samsung as:-
This comparison is further categorised on the basis of employees, directions and stakeholders of
Samsung are as follows:-
Features Ethical Practices Unethical Practices
Employees The ethical practices are
governed and authorised by the
government of United
Kingdom for their legal and
lawful obligations imposed on
organisation. The employees of
Samsung perform their actions
within proper ethical practices
which involves honesty,
loyalty, discipline, confidential,
etc.
The unethical practices are not
governed and referred as
unauthorised by government of
United Kingdom. These
practices are considered as
illegal and contains unlawful
objective to achieve success
that adversely affect the actions
of business by reducing the
trust and faith of its customers.
The employees of Samsung are
negatively impacted by the

21/03/20 18:54:37
The managers of Samsung are advantages by adopting ethical practices with the help of corporate
governance to set out expected standards of good practices which includes board leadership and
company purpose, division of responsibilities, composition, succession, audit, risk control and
remuneration. This develops an opportunity for business to develop its competitive strategies from
internal strength to control weakness and external opportunities to overcome threats.

CONCLUSION
 From the above discussion it have been concluded that business
consists of activities played by managers, leaders and employers to
achieve goal and objectives that creates an opportunity for growth and
stability of organization in global market. The business report represents
the current actions performed in an enterprise that determines the ability
to achieve success efficiently. This project analyze the corporate
governance with the application of normative and descriptive theories
such as deontology, virtue ethics, ethical egoism, utilitarianism,
individual and situational factors. It focuses on legal and lawful
decisions that lead to attempt and perform right actions from good
experiences. Additionally, it analyze ethical and unethical practices that
affects internal and external stakeholders of the company.
21/03/20 18:54:37
ADD A FOOTER

RECOMMENDATIONS
 From the above prescribed discussion it is suggested that members of every business
must complete their actions by following the legal rules and regulations of government.
The Jay Y. Lee who was the co-vice chairman of Samsung Electronics is caught for it
Samsung Bribery Charges by the prisoners of Seoul Central District Court at 25th
August, 2017. It is recommended that organisations must play their role effectively and
being aware of government laws that affect the brand image and reputation of company
followed by its internal and external stakeholders.
21/03/20 18:54:37
ADD A FOOTER

REFERENCES
 Besley, T., 2015. Law, regulation, and the business climate: The
nature and influence of the World Bank Doing Business
project. Journal of Economic Perspectives. 29(3). pp.99-120.
 Dumeresque, D., 2014. The chief digital officer: bringing a dynamic
approach to digital business. Strategic Direction.
 Goldratt, E. M., 2017. Critical chain: A business novel. Routledge.
21/03/20 18:54:37
ADD A FOOTER

Continue….
 Gray, D. E., 2019. Doing research in the business world. Sage Publications
Limited.
 Hair, J. F., 2015. Essentials of business research methods. ME Sharpe.
 Haynes, W. W., 2015. Pricing decisions in small business. University Press of
Kentucky.
 Hillary, R. and ed., 2017. Small and medium-sized enterprises and the
environment: business imperatives. Routledge.
21/03/20 18:54:37
ADD A FOOTER

Continue……
 Kaul, A., 2014. Effective business communication. PHI Learning Pvt. Ltd..
 Paulsen, C. and Toth, P., 2016. Small business information security: The
fundamentals (No. NIST Internal or Interagency Report (NISTIR) 7621 Rev. 1).
National Institute of Standards and Technology.
 Storey, D. J., 2016. Understanding the small business sector. Routledge.
21/03/20 18:54:37
ADD A FOOTER

Continue……
 World Bank Group, 2014. Doing Business 2015: Going Beyond Efficiency:
Comparing Business Regulations for Domestic Firms in 189 Economies: a World
Bank Group Flagship Report. World Bank Publications.
 Yunus, M., 2017. Social business entrepreneurs are the solution. In The Future
Makers. (pp. 219-225). Routledge.
21/03/20 18:54:37
ADD A FOOTER