Analyzing Corporate Scandals: Ethics of Samsung, VW, and Enron

This report analyzes the Volkswagen (VW) emission scandal and the Samsung Battery Recall, comparing them with the Enron scandal. It identifies stakeholders affected, including customers, employees, and shareholders, and discusses ethical, legal, accounting, and corporate governance issues that led to these scandals. The report highlights similarities between the scandals, such as prioritizing profits over consumer safety and ethical conduct. A comparison is made between Enron and both Samsung and VW, focusing on differences in the nature of the fraud and the impact on stakeholders. Improvements based on utilitarianism and deontology are suggested for both Samsung and VW, emphasizing the importance of ethical decision-making, transparency, and accountability. The conclusion recommends establishing a stronger code of conduct and fostering a culture of transparency to prevent future acts of corruption. The document is available on Desklib, a platform providing study tools and solved assignments for students.

REPORT

Contents
Introduction......................................................................................................................................2
Stakeholders involved and how they were affected........................................................................2
Ethical, legal, accounting corporate governance issues...................................................................3
How the issues occurred?............................................................................................................3
Similarities between the scandals?..............................................................................................4
Comparison:.....................................................................................................................................4
Between Enron & Samsung Battery Recall (Similarity and difference).....................................4
Between Enron & Volkswagen (Similarity and difference)........................................................5
Improvements and Changes.............................................................................................................6
Conclusion & Recommendation......................................................................................................7
Reference.........................................................................................................................................8

Introduction
The discussion is about Volkswagen (VW) emission scandal which mainly deals with the
internal scandal that has been dented with the integrity of the company (Strittmatter et al., 2017).
The company had been equipped with the different varieties of the diesel vehicles that comply
with the U.S. emission standards, every diesel car manufacturer tends to focus on handling the
software installation in the car to clean the exhaust of the diesel.
The other case is about Samsung Battery Recall that focus on handling the effective strategy to
steal some market share. Here, the reports are about media attention citing some faults in the
batteries. Here, the focus is on the supply chain and the other battery manufacturers. The major
effect of the issues came in Galaxy Note 7 after launching well-received smartphone. The sales
have halted globally after the issue of battery explosion (Raja, 2016).
Stakeholders involved and how they were affected
For the VW, the stakeholders in this case include any customer who has been affected by the
policies, company and the other people who invest in the same. The scandal has highlighted the
extent which includes the customers, employees, dealers, shareholders and the other auto-
manufacturers. They have been mainly affected in a large number ranging from loss of jobs, and
then leading to change in stock market, environmental issues and tarnished reputations (Tse et
al., 2017). After the scandal that went public, VW has been trying to work on taking steps to
correct the issues with the ability to cope up with the damage done to the image.
In Samsung case, the customers who were loyal had to face a big shock as they were affected by
their poor decisions. Samsung SGI was the min supplier as they will not be able to regain the

trust of people effectively. The stakeholders are the commission and the consumers, stock market
and the environmental issues which were there at the time of explosion. Apple Inc., is a
competitor to Samsung and so it is preparing an interconnected supply chain to clean up the
problems and recoup the profits (Cooke, 2017).
Ethical, legal, accounting corporate governance issues
How the issues occurred?
The ethical issues in VW are related to the fact that the company focused on the sales rather than
releasing the quality vehicles. With this, the company could not develop a cleaner diesel engine
and tend to sacrifice their integrity at the cost of money. the legal issues are about how VW stole
the trust of the people and their employees costing jobs and then other lawsuits. VW has also
been using a software to cheat in the emission tests and violating the Clean Air Act with
obstruction of justice (Rhodes, 2016). The exposure in US has been dwarfed for the vehicle
manufacturers in pollution cases and malfunctioning the safety factors. The corporate
governance issues are related to failure of the top management to take the responsibility of the
actions. It was known at the different levels of management that the company has been cheating
which led to the malfeasance which is punishable by law (Griffin et al., 2016). Along with this,
there are rules and processes for the failure of top management to enforce the rules and work on
the handling the diminishing of the failure with the classic disruptive innovation.
The ethical issues in Samsung were the lack of the safety precautions which attributed to the
laws surrounding mainly how the product safety was confirmed. With this, there have been
responsibilities for wasting money by sending any type of faulty replacements, hurting the
customer and their long-term relationship with this (ABC News, 2017). The legalities are related

to handling the faulty replacements, which according to the law has a major impact on the
companies through their own uncertainty. There have been issues related to the management,
suppliers, shareholders to handle the set of rules and controls in which the company lost the trust
of the people.
Similarities between the scandals?
Both the companies thought about making more money rather than thinking of the jobs of the
employees or the loss of trust from their customers. A regular damage by using an illegal
software by VW could prove that the company sacrificed their integrity and company image for
more money. Along with this, both of them lost their consumers and the stakeholders where
there have been high routes that meant to go against any type of personal beliefs. There have
been issues about company priorities which focused mainly on the sales rather than releasing the
quality vehicles. On the other hand, Samsung just added to what VW did. Even after repairing
the products, there were explosions which showed that the company does not have any respect
for the consumers and their money.
Comparison:
Between Enron & Samsung Battery Recall (Similarity and
difference)
There difference is related to deadlines where Samsung displayed poor judgement and poor
character with the lack of moderation that caused them to release a faulty product with
impatience. They then tried to cover the damage in order to keep the sales and not concern about
the retention plan of the Samsung customers. Honesty and trustworthiness are important factors
which were disregarded by the company. With Enron, the analysis is based on the transparency

and auditing in the organisations. The company corresponds mainly to the positional rights
which are granted through the position to fulfil the positional duties of serving in an ethical
manner (Bloomberg News, 2016).
The similarity is about how both the companies have led to risk the jobs of the employees, with
risks related to fraudulent activity. Along with this, the companies have code of ethics to prohibit
the managers and executive from being involved in other business activities so that there is no
major conflict of interests in future.
Between Enron & Volkswagen (Similarity and difference)
The difference is that Enron fraud was about swiping the savings of thousands of people whereas
VW endangered the health of people with higher level of NOx. VW promoted with false
promotions for less carbon emissions, where Enron only urged the employees to buy the stock of
the company. There have been fines and the lawsuits for VW to handle the scale and scope
whereas Enron was wiped for the revelation of the accounting fraud that was shown to the
company. VW main role in Germany automobile industry led to the blow in the devastation of
the global image of the company (Zhang et al., 2016). Here, the people were not able to handle
the value and were wiped due to the false claims. Enron tend to taint the accounting profession
relating to financial reporting where VW confronted about advocating the technology with the
means to achieve a better sustainability in the environment.
The similarities that could be considered are about the defeat devices, how they affected the jobs
of the employees. Along with this, there have been issues related to controlling the management
as both the companies looked over the profits rather than the welfare of the consumers. The
short-term profits meant rising the stock prices and stock plummeted, but quick fortunes were

lost. Both of them empowered the government to create a commission to make sure that
collusion never happens.
Improvements and Changes
For Samsung, it is important to focus on utilitarianism and Kantianism about viewing the case
mainly to determine about the ethical significance by looking at the controversy that reflected on
the risks and rewards with adding the technology into a small device. The business actions
mainly aim to maximize the happiness with a major affect that holds on maximizing the pleasure
and minimizing the pain with a stakeholder approach (Zhang et al., 2017). The paying of more
attention with product launch deadlines than the safety and satisfaction. Considering the
deontology, Samsung was facing the outrage from social media, and so they tried to mitigate the
problem. But, Samsung could not respect the ability of public to make the different rational
decisions related to the controversy, when they also declared that their replacements are now safe
and easy to use without making any effective changes to the product. But the false claims were
unethical on the standards to hide the truth that could never be considered under the universal
law (Brian et al., 2016).
For Volkswagen, utilitarian theory is about producing a better amount of good with
consequentialism ethics which are for determining the different actions and to work on the matter
of perspectives when related to the terms of what actions are beneficial. VW actions have been
found to be oppositional to Utilitarian where the entire scandal has been not good for any person
or the company as well. The consumers are now facing the issues related to whether they should
buy the defected cars or not. Along with this, the employees also lost their jobs even after the
problems were rectified. VW has been focusing on the reinforcement of compliance, risks

management and auditing in the company (Li, 2015). For deontology, there have been
perspectives related to how the people are working under a proper range and scope of rights. VW
never have the people a complete right of what they were doing or what they have been planning
to do. They have made people believe only in the different facts and the images, where
dishonesty kept the consumers to buy the cars and the shareholders only buying the stock of the
company. With this, there has been a major helping build-up where the faulty cars or the car
dealers tend to sell, and people also kept their sales going without thinking of making appropriate
decisions.
Conclusion & Recommendation
After analysing the collapse of Enron, there are different lessons about preventing the acts of
corruption. The major recommendation could be to give a firm to create and embrace the
stronger code of conduct. This will lead to enforcing a strict conduct policy with the better
business actions which can completely jeopardize the firms in legal and ethical forms. It is
important to safeguard and allow management to clear understanding of how the corporation is
adopting. The companies are capable to establish a sense of transparency with building trust for
the investors and in the public. Enron case is important to handle the case of code of conduct
policy that has been highly acclaimed (Bart Jansen, 2016). The creation of a culture where the
employees hold a culture with higher standards include a series of checks and balances that will
be able to match with the transparency in operations. It also shows that the firms are representing
the honest sense of security and faith in the company where one is also aware of that lead to
unethical practices.

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