Business ethics is ‘the study of what constitutes right or wrong, good or bad human conduct in a business environment’ (MacIntosh and O’Gorman, 2015, Pg 164). Our chosen company, Samsung, is a multinational company which means it’s essential that it has good business ethics, in order to avoid scandal or public outrage. Samsung strives to ‘recognise and analyse differences in laws, regulations, and practices in respective countries while conducting business in a lawful and ethical manner.’ (Samsung, 2018), this is essential for a multinational company as it’s operating in many countries across the globe, which will have different laws and views on ethical business behaviour due to differences in society and social norms.
However business ethics is more than just the internal decisions a company makes, but how the decisions they make affect society and the surrounding environment. Corporate social responsibility is an aspect of business ethics, which involves integrating with communities and stakeholders voluntarily. ‘a firm needs to be seen as having a positive impact not only on its workers, but also upon society as a whole.’ (MacIntosh and O’Gorman, 2015,Pg 180) Samsung has multiple ways of doing this, by putting money into education, employment and medical services for communities which may lack the resources, this benefits the community long term as education of the young people in the community will create more learning opportunities and prepare for ‘meaningful jobs and a better future’ (Samsung 2018).
Samsung also takes action to ensure that they do not harm the environment, they have the slogan ‘Planetfirst’, by 2020 Samsung aim to and are making efforts ‘to reduce greenhouse gases, to make eco-friendly products with minimum environmental impact, to reuse waste material and waste products to help build a circular economy, and our efforts to reach out to local communities.’ (Samsung, 2018).This shows that Samsung are limiting the damage they’re doing and also aiding the development of the environment through their proposed reusing of waste material, this will stop the waste material entering and disrupting or destroying ecosystems.
Samsung is one of the biggest global employers, they employ around three hundred thousand people worldwide. The strive for the company to make profit is fuelled by the prospects for expansion and growth of the company but also ‘economic stability and subsequent development of a nation’ (MacIntosh and O’Gorman, 2015) so Samsung make the ethical business decision to keep creating profit and operating in many countries as they create jobs and revenue for the countries in which Samsung carries out business or has business interests, if they were to stop creating profit then this would cause a large number of jobs losses and have a negative effect on society, as well as the business failing to produce sufficient funds to continue to run as a multinational corporation.
This is a form of corporate social responsibility. Samsung has encountered some ethical problems. As they were ‘caught paying people to write and give a false, negative comment on their competitor’s product. The issue arose in April 2013 and was done by one of the branches of the company in Taiwan.’ (Awie Bin Tomani et al, 2016). This is seen as an ethical issue, as the business that these reviews were left on, HTC, could have suffered repercussions due to these reviews, such as, a drop in demand for their product and therefore a fall in revenue, this is ethically wrong as customers of the product haven’t actually made these comments and future potential buyers would be put off buying HTC and may turn to the competitor Samsung, as they would have wanted.
This action would cause long-term negative consequences for the stakeholders of HTC, this is why the action can be classified as unethical. Samsung has also been accused of ‘exploiting young workers’ (Charles Arthur, 2012) the claims include physical and verbal abuse as well as overworking. It was also found that ‘safety measures, such as providing protective clothing for workers, were not followed.’ (Charles Arthur, 2012) this proves that the treatment of the workers was unethical as it put the employees of Samsung at risk of harm, due to cost cutting or ignorance. As employees are stakeholders in the business they put trust into the business, this unethical behaviour is a breach of this trust.