Ethics in Samsung's Business Practices

This assignment delves into the complex ethical landscape of Samsung's operations. It examines various case studies, such as the Galaxy Note 7 recall and Lee Jae-yong's bribery scandal, to analyze how these incidents impacted the company's ethical standing. The analysis considers different ethical frameworks, leadership styles, and the influence of globalization on corporate responsibility. Students are encouraged to critically evaluate Samsung's strategies for addressing ethical challenges and propose recommendations for future improvement.

Running head: Ethical Dilemma faced by Samsung 1
Management theory and practice
Ethical dilemma faced by Samsung

Ethical Dilemma faced by Samsung 2
Introduction
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.

Ethical Dilemma faced by Samsung 3
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).
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

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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

Ethical Dilemma faced by Samsung 5
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
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

Ethical Dilemma faced by Samsung 6
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&Mihelič, 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

Ethical Dilemma faced by Samsung 7
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.
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

Ethical Dilemma faced by Samsung 8
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

Ethical Dilemma faced by Samsung 9
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).
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

Ethical Dilemma faced by Samsung 10
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.

Ethical Dilemma faced by Samsung 11
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