The Approaches Samsung Have Used to Become a More Socially Conscious Business - Case Study Example

Business Report By Student’s Name Code +course name Professor’s name University name City, State Date Business Report Executive Summary In today’s world, the concept of ethical consumerism has gained momentum. Consumers in both developed and developing nations are concerned about ethical consumption. Research shows that consumers throughout the globe are striving to buy products from those organizations that operate ethically. Thus, they are prepared to challenge and shun firms who are not socially conscious. The purpose of this paper is to analyze the ethics and values of Samsung Co. Ltd., which have become a more socially conscious organization. The paper begins by giving a short description of the organization. The paper then proceeds to provide a brief overview of ethical consumerism, identifying the examples of some of the products which fall into the ethical category. In addition, the paper analyzes the components of ethical culture found in Samsung. Finally, the paper provides a short opinion survey on what influences consumer buying behaviour, carried out by you from a sample of students at GSM London. Table of Contents A Brief Overview of the Company 5 The Approaches Samsung Have Used to Become a More Socially Conscious Business 6 Preventing and Responding to Problematic and Antisocial Behavior 6 Cultural Change Efforts 7 Organizational Citizenship/Social Performance 9 Ethical Consumerism The concept of ethical consumerism was not a common phenomenon until recently. According to Fernando (2009) ethical consumerism refers to the tendency by clients to buy products that are ethically manufactured and distributed. Thus, ethical clients are those people that purchase goods that are manufactured in an ethical manner. For instance, a firm is considered to be manufacturing ethically if the employees involved in the production of goods and services are lawfully employable. Therefore, the company that uses forced labour as well as child labour does not fit into this category. Ethical consumers are influenced by such motives as environmental, spiritual and political to purchase a product from a given firm (Crane, 2008). The recent financial crisis, which took a toll on both developing and developed countries, is responsible for the lack of trust by consumers in recent years. In the United States for instance, lack of trust by consumers have led to loss of confidence in the integrity of business firms. Trust plays a critical role in enhancing long-term relationships between consumers and businesses. The questionable conduct of many large organizations in the recent past has forced ethical shoppers to critically examine the behaviour of firms prior to any purchase. Ethical consumers are prepared to pay a certain price not only to those products that give them value, but also for those goods that are ethically produced. There are a wide range of product areas which fall into the ethical category, including insurance, food, beverage, energy among others that are regarded as ethical. A Brief Overview of the Company Samsung is a South Korean company that has dominated the electronics market since 1938. Samsung thrives on making unique, innovative designs that are intended to fit customers’ tastes. The company’s spirit of thinking big is the engine that works behind its innovative and stylish designs. Company’s products vary from computer hardware and software, mobile electronic devices to electronic peripherals and information technology solutions. To serve its expansive clientele, the company has employed over 230,000 workers that spread all over the world and work in different branches (Michell, 2010). Worth noting is that the company faces competition from other multinational companies such as Apple, Nokia and Dell (Chang, 2008). For this reason, the company continuously works on device systems in order to remain competitive. The company’s strengths in terms of competition are the loyalty to its customers, its unique and innovative products, reputation and marketing network. The Approaches Samsung Have Used to Become a More Socially Conscious Business Preventing and Responding to Problematic and Antisocial Behavior According to Husain (2014), the company is dedicated to preventing and responding to antisocial behavior effectively by creating a dynamic, open and entrepreneurial workplace, while every employee is encouraged to respect others, contribute to the company, and work to the best of their ability. Firstly, the organization strives to create a culture of cooperation across borders, languages and zones. The organization is, therefore, dedicated to creating a working environment where people support, respect and value each other. The employees are required to analyze the company’s code of conduct, which guides their decisions in various circumstances. The company requires that the new employees provide an affirmation that they have read and understood the code of conduct prior to joining the company (Husain, 2014). Moreover, they are required to comply with it and report on any suspicions of violations as required by the company’s policies. Whenever there are issues of antisocial behavior, the employees are required to inform about conduct of others that may have led to violation of company’s policies. Furthermore, the organization urges employees to cooperate during any inquiries, examinations, litigations and investigations related to Samsung’s business. Cultural Change Efforts There are various temptations to engage in unethical practices on the way to success in business. In many instances, companies consider profits ahead of other components of business, which can be devastating to both the customers and the business as a whole. According to Husain (2014), that is not the case in Samsung because the clients appreciate that the company understands their needs and acts with regard to their interests. The culture of Samsung is focused on partnership, with more emphasis being placed on trust and the desire that the company performed better. Through the use of strict company’s policies and a code of conduct, Samsung has clearly defined its intention of having an ethical business culture that is based on various components. The first component of Samsung’s ethical culture is people. Samsung’s business comprises various people, including partners, employees and customers. This component is derived from the belief that people are the most valuable assets of a company. It takes the effort of people to create a company’s vision. According to Samsung Electronics Co. (2011), Samsung regards people as its most valuable asset rather than simple assets that exist to be exploited. Fu (2015) state that the electronic industry is dynamic, complex and innovative; therefore, there is the need to hire employees with the best credentials. Samsung agrees and understands those facts, thereby creating a structure where people involved in its organization are offered the best experience. Samsung believes that no barrier should prevent employees from performing to their full potential. Finally, at Samsung, people have the ability to advance and be rewarded based solely on their capability and character. Employees of Samsung are encouraged to deliver honest and constructive feedback to their colleagues (Samsung Electronics Co., 2011). Meeting a commitment is the second component of the ethical business culture of Samsung. This component is derived from the belief that to build a strong ethical culture, it is important to meet expectations of the society and business objectives. Meeting commitments is also based on the belief that it increases business benefits and reduces costs and risks. The company is known for keeping its promises and honoring its commitments. For example, when employees are encouraged to work and are promised to be given bonuses, the bonuses always materialize (Grobart, 2013). In case a commitment cannot be met, Samsung makes sure that the other party is notified on time and is given assurance that they will receive compensation in the future. The code of conduct, being the third component of an ethical culture, is very important in informing the employees about the needed ethical practices in an organization. This component is based on the belief that a code of conduct sustains ethical culture by providing guidelines of elements of an organizations culture. A code of conduct contains the vision and mission statements of an organization and the behaviors restricted to an organization. The ethical culture of Samsung is guided by a viable code of conduct that states clearly how the employees should behave at work. Moreover, Samsung’s code of conduct includes enforceable punishments for those who break it (Samsung Electronics Co, 2008). Transparency and communication is the last component of an ethical culture, and it is based on the belief that good communication is the key to successful business. Transparency and good communication is very important in communicating the company’s direction. In the case of Samsung, an open-door policy is maintained regarding questions on the direction the company is taking. The company also allows feedback and complaints to be reported in a manner that the people who inform about some violations are not punished. Organizational Citizenship/Social Performance Although businesses exist to make money for investors, it is also clear that firms have social responsibilities to other members of the society. In pursuit of their self-interest and compliance with the law, firms have to perform voluntary functions that address the interests of others (Altman, 2012). According to Bose (2012), organizational citizenship behavior is the behavior that increases the effectiveness of an organization. Talking about social performance of the company, it can be measured using some distinct paths that affect the relationship between a company and employees. Hereby, the first path is the need for security and safety. Being consistent with the idea of providing employees with security and safety, Samsung emphasizes in its annual reports that taking care of employees is among the most important missions and core values of the organization. The organization then supports the claims with employee friendly policies. Moreover, Samsung pays highly competitive wages to its employees. In fact, more than half of the employees at Samsung have health insurance and retirement plans (Samsung Electronics Co., 2011). Ethical Global Citizenship and Ethical Diversity In the face of technological advancement and globalization, there is a need for shared ethics and values for the proper functioning of the economic, social and political network. According to Kwok and Tadesse (2006), the process of globalization generates imbalances, uncertainty and conflicts. The process of globalization has led to more frequent contacts between people with diverse views of the world. In fact, a large number of differences are driven by religious practices and beliefs (Rupp, Ganapathi, Aguilera, & Williams, 2006). Samsung understands that its strength lies in its collective diversity. The organization is, therefore, dedicated to creating a workplace culture so that everyone can be successful depending on merit. According to Samsung Electronics Sustainability Report (2012), the organization hires and develops people with diverse backgrounds and unique experiences. Diversity is, therefore, a core factor in developing the strength of Samsung with regard to its global business capabilities. A Survey on What Influences Consumer Buying Behaviour The concept of consumer behaviour has sparked a lot of debate in the recent past. In the face of global competition, marketers have been forced to study consumer behaviour in order to create market-responsive products. It is only by asking consumers what they need that companies can produce appropriate products. Adding to this, and perhaps more importantly, studying the consumer behaviour enables marketers to discover the latent consumers' needs and sets in motion the process of producing only those products that meet their needs (Hitt, Ireland & Hoskisson, 2010). I carried out a short opinion survey on what influences buyers buying behaviour on a sample of students at GSM London. The data was collected through use of a structured questionnaire as depicted below: Research Questionnaire Questionnaire used to collect data from students at GSM London Name: Date of Interview: Gender: Male Female Age:  18-28Yrs  29- 39 Yrs 40-50 Yrs  51 and above Degree Pursued:  Undergraduate  Masters PHD Income: a) 10000 ( ) b) 10000-20000 ( ) c) 20000-30000 d) Above 40000 NB: Tick response as appropriate 1. Do you assess an organization’s ethical behavior prior to any purchase? Yes No 2. To what extent does a firm’s ethical behaviour influences you to make purchasing decision? a) Strongly non-influential b) Non-influential c) Neutral d) Influential e) Strongly influential 3. How well do you know ethically produced goods? Extremely well Very well Moderately well Slightly well Not at all well 4. How committed are the modern day organizations to produce ethically goods? Extremely committed Very committed Moderately committed Slightly committed Not at all committed THANK YOU FOR YOUR COOPERATION Survey Findings Table One: Whether consumers assess a firm’s practices prior to making purchasing decision Do you assess a firm’s practices prior to making purchasing decision? Percent Yes 85 No 15 Figure 1: Graphical analysis of impact From the responses obtained from the short survey carried out from a sample of 50 students at GSM London, 85% of the respondents assess an organization’s ethical behavior prior to any purchase. Thus, many people opt to purchase goods from a firm that operates ethically. Table 2: How well consumers know ethically produced goods Percent Extremely well 70 Very well 15 Moderately well 5 Slightly well 5 Not at all well 5 Figure 2: How well consumers know ethically produced goods In addition, 70% of the respondents indicated that they have adequate knowledge of ethically produced goods. Conclusions and Recommendations From the survey findings, 85% of the respondents assess an organization’s ethical behavior prior to any purchase. People normally opt to purchase products and services from those organizations that operate ethically. At times, consumers might refrain from purchasing a certain brand because they have heard bad stories about a company. Based on the above report, Samsung is an ethically transformed organization because the company operates with regard to a code of ethics that encourages integrity and transparency. The code of ethics emphasizes on the kind of punishments employees should expect when they violate the company policies and ethical requirements. Samsung has continued to view human rights as an important part of its corporate responsibility. The company seeks to protect the human rights of its employees by providing them with mortgage loans, retirement and medical covers. The employees can, therefore, afford medication and health care when they are sick. The company is a global leader in the electronics manufacturing industry, and therefore, operates on a competitive environment. Samsung represents business growth which I am interested in professionally, and it operates on a strict ethical culture that emphasizes on trust and integrity. For the proper management that would improve the organization, it is recommended that Samsung conducts frequent human resource training on the code of ethics and the expectations of each employee. The training will help employees to understand the reward and penalty systems, thereby improving their productivity. The employees will further understand the company’s definition of fraud and violations and will be in a better position to avoid them. Reference List Altman, M. 2012, Behavioral Economics for Dummies, New York (NY): John Wiley & Sons. Bose, U. 2012, An ethical framework in information systems decision making using normative theories of business ethics, Ethics and Information Technology, 14(1), 17-26. Chang, J. 2008, Sony vs Samsung: The Inside Story of the Electronics Giants' Battle for Global Supremacy, New York (NY): John Wiley & Sons. Crane, A. 2008, The Oxford Handbook of Corporate Social Responsibility, Oxford: Oxford Handbooks Online. Fernando, A. C. 2009, Business Ethics: An Indian Perspective, India: Pearson Education. Fernando, A. C. 2009, Business Ethics: An Indian Perspective, India: Pearson Education. Fu, W. 2015, Towards a Dynamic Regional Innovation System: Investigation into the Electronics Industry in the Pearl River Delta, China, Munich: Springer. Grobart, S. 2013, How Samsung Became the World's No. 1 Smartphone Maker. Retrieved from http://www.bloomberg.com/bw/articles/2013-03-28/how-samsung-became-the-worlds-no-dot-1-smartphone-maker. Hitt, M, Ireland, R & Hoskisson, R. 2010, Strategic Management: Competitiveness & Globalization, Concepts: Edition9, London: Cengage Learning. Husain, S. 2014, Emotional Intelligence for Emerging Leaders and Entrepreneurs - Illustrating the Fortune Giants, New Delhi: PartridgeIndia. Kwok, C. C., & Tadesse, S. 2006, National culture and financial systems, Journal of International Business Studies, 37(2), 227-247. Michell, T. 2010, Samsung Electronics and the struggle for leadership of the electronics industry, 1st ed, New York (NY): John Wiley. Rupp, D. E., Ganapathi, J., Aguilera, R. V., & Williams, C. A. 2006, Employee reactions to corporate social responsibility: An organizational justice framework, Journal of Organizational Behavior, 27(4), 537-543. Samsung Electronics Co. 2011, Global Code of conduct. Retrieved http://www.samsung.com/ua/aboutsamsung/corporateprofile/download/sec_global_codeofconduct.pdf. Samsung Electronics Co.2008, Ethics Management. Retrieved from http://www.samsung.com/us/aboutsamsung/corpcitizenship/environmentsocialreport/environmentsocialreport_EthicsManagement.html Samsung Electronics Sustainability Report. 2012, Creative Organizational Culture. Retrieved from http://www.samsung.com/us/aboutsamsung/sustainability/people/download/Samsung_sr_2012_Creative_Organizational_Culture.pdf. Read More