Samsung Corporate Social Responsibility - Case Study Example

Samsung CSR Name: Students ID: Unit Code: Instructor: Introduction In the past three decades, activities concerning corporate social responsibility (CSR) have gained unprecedented momentum. During this time, CSR has drawn much public attention owing to the heightened globalisation process. The number of multinational companies have increased as countries have come to be more liberalised. CSR has become an important element of each company’s annual reporting. This is simply because their operations have a significant impact not only on the economy, but most importantly on the environment, the general public and the people they employ. Below I assess Samsung’s performance in respect to its mandate on CSR including health and safety, employment, human and labour rights, environment, equality, as well as community development. Samsung is a global conglomerate based in Seoul, South Korea. The Group has diversified activities in virtually every corner of the globe. It has manufacturing plants and business operations in different parts of the world such as Korea, Vietnam, China, India, Brazil, Indonesia, United Kingdom, Canada, South Africa, and United States and in many other countries. The company’s products, especially LCDs, LEDs, mobile phones and smartphones are sold in every corner of the earth. The company employs over 290,000 people globally, either directly or indirectly (Samsung, 2015). As a one of the leading electronics manufacturers in the world, Samsung is expected to substantially participate CSR. The company ought to pay attention to and be engaged in conserving the environment, improving the local economy, and respecting the rights of society and other businesses. The Positive Aspect of Samsung’s CSR The company has made a great attempt as regards its mandate on CSR. In fact, Samsung has won many awards due to its focus on CSR. Some of the awards include the Solve for Tomorrow Award, among others. This is because the company believes that the incorporation of CSR activities into its commercial operations is mandatory for its sustainable growth. This has even been reflected in the company’s vision “Inspire the World, Create the Future.” The company “believes it is our responsibility to do business in a way that enriches our planet” (Samsung, 2015). Its commitment to CSR is underlined by the creation of the CSR Liaison Office in 2009, which directly reports to the CEO. Established in 1996, Eco-generation is Samsung‘s major CSR program and is also one of the major environmental education programs for youth and children in South Korea. The program was expanded in 2006 to the Asia-Pacific region in partnership with the UNEP ROAP (United Nations Environment Programme Regional Office for Asia Pacific). The program is principally run through the website (www.eco-generation.org) and is still supported by Samsung’s experts in environmental matters. Eco-generation emphasises learning and sharing information regarding the environment (Samsung, 2015). With customer satisfaction in mind, Samsung develops innovative and high-quality products that are environmentally-friendly. The company has dedicated itself to cut down F-gas emissions resulting from their manufacturing undertakings by improving the filter systems and efficiency. For example, from 2008 to 2012 the company reduced this indicator by 40 per cent. Furthermore, the company is continually at work and has a strategy in place to increase the energy efficiency of their products. Its strategy is to venture into the production of solar power, LED lights and electric cars under its new environmental rules by 2020. The company recently set up an Eco-Rating system for all its products to ensure that Samsung’s products meet the terms of the global environmental guidelines. The company intends that this becomes more important and seeks support from government and non-governmental organisations to improve on matters concerning environment (Samsung, 2015). Moreover, Samsung supports its global suppliers to help them come to be more resourceful and eco-friendly. For example, Samsung Electronics America has established a recycling program to help users dispose their old electronic gadgets in the most environmentally friendly way (Samsung, 2015). So far, the company has cooperated in recycling undertakings with the a few US companies, such as, CRT Processing LLC, located in Wisconsin, Eco International LLC, located in New York, JFRC, LLC, located in Minnesota, and Global Electric Electronic Processing (GEEP), located in Barrie, Ontario, and Edmonton, Alberta, among others. In order to be part of the company’s value chain, Samsung requires the partnering applicants to follow the Samsung Waste Electrical and Electronic Equipment (WEEE) Management Policy (Samsung, 2015). Samsung has also shown its commitment to improving employee well-being and safety. The company conducts an audit on the manner in which their supplying partners act to employees regarding their health and safety, undue working hours, fair treatment, child labour and discrimination. Samsung Electronics has created a flexible work schedule called ‘Work Smart’, which helps the employees to capitalise on their work performance. The company helps communities and the society in general by doling out employment opportunities and supporting disadvantaged people. Samsung uses a uniquely planned recruitment programme for the incapacitated. To show concern for the good health and education of children and youth, Samsung set up ‘Samsung Hope for Children’ programme (Samsung, 2015). Mullins (2007) points to a group affected by corporate social responsibility actions that is a lot neglected – competitors. Samsung pledgees to respect other companies’ intellectual property, such as copyrights, patents and trademarks (Samsung, 2015). The Negative Aspect of Samsung’s CSR Samsung has come under serious criticism for mistreating and violating rights of its workers, poor working and employment conditions. According to RepRisk (2013), there were over 160 confirmed cases of illnesses and 60 deaths concerning Samsung in 2012. In October 2013, a South Korean court associated the demise of a 29 year-old employee, who passed away in 2009 from leukaemia, to the 5 years she had been employed at Samsung Electronics. The court indicated that it could not probe the employee’s contact with chemicals because Samsung had refused to offer the required cooperation. As January 2013 came to a close, one worker passed away while four others were wounded due to leakage of poisonous gas one of Samsung’s factories in South Korea. In May 2013 there was one more hydrofluoric acid gas leakage at the same plant. In February 2013, Samsung’s manufacturing plant in Hwasung faced accusations for regular violations of South Korea’s Toxic Chemical Control Act. There was another leakage in April 2013 at a Samsung Fine Chemicals factory leading to the hospitalisation of six employees. Moreover, in July 2013 a fire broke out at Samsung’s Giheung Plant, due to an apparent failure to uphold safety rules. Shortly following that incident a 1,300-ton water tank rupture at the Korean Namgu Plant due to negligence As a result, three workers lost their lives and twelve others working close to the water tank when it burst out were injured (RepRisk, 2013). The company has also come under harsh criticism for matters involving supply chain as well as human rights abuses. In April 2013, Samsung confessed that it had procured tin from contentious mining activities on Bangka Island, Indonesia after strong pressure by customers and the NGO Friends of the Earth International. This was mainly because the company relied on child labour to mine the tin. Also, there was massive environmental destruction and around 150 workers passed away every year (RepRisk, 2013). Samsung has been indicted of cruel and prohibited work practices at its factories in China. The company had been accused to causing its employees to work for long hours and compulsory overtime. A number of workers were not paid for their work. This also involved underage workers, hazardous work practices, discrimination based on gender, as well as verbal and bodily abuse. In early 2013, several electronic manufacturers including Samsung were levied $22.8 million over price-fixing in China. Also, over 1,500 patrons were enjoined in a class action court case regarding price-fixing in South Korea against Samsung plus other electronic firms. RepRisk (2013) indicates that the Ministry of Labour in Brazil filed a $100 million court case against Samsung for purported defilement of labour rights at the company’s Manaus plant. The company was also involved in a protracted a multi-billion dollar court case involving infringement of intellectual property rights with Apple. Still, Samsung tries to engage with the stakeholders as much as possible. The company’s executive in charge of CSR deliberates on concerns raised by stakeholders during executive meetings. High priority matters are then discussed at top management meetings held by the CEO for replies. Samsung engages its stakeholders at 6 sub-sections including: customers, shareholders/investors, governments, employees, non-governmental organisations, and suppliers (Samsung, 2015). Conclusion Samsung has spread its activities globally and is therefore expected to take part in CSR activities. The company has had a positive impact through collaborative works with suppliers, governments and non-governmental organisations to reduce impact on the environment. The company has internal initiatives such as the establishment of a CSR liaison office, Eco-rating, Eco-generation, Work Smart, and Waste Electrical and Electronic Equipment (WEEE) Management Policy that push forward its CSR agenda. However, Samsung has been heavily criticised for violating rights of its workers, poor working and employment conditions, matters involving the supply chain as well as human rights abuses. Still it continues to engage its stakeholders in ensuring that their concerns are voiced and given the necessary attention (Samsung, 2015). References Hannagan, T., Bennett, R. et al. 2005. Management: Concepts & Practices, 4th ed, Harlow: Pearson Education Limited. Mullins, L. J. 2007. Management and Organizational Behaviour, 8th edition, Harlow: Pearson Education Limited. RepRisk, 2013. The Most Controversial Companies of 2013. . Samsung. 2015. About us. Samsung. 2015. Annual Report 2013. . Samsung. 2015. Global Code of Conduct. . Samsung. 2015. Sustainability Reports 2013. . Read More