Samsung Bribery Charges
Due to the globalization process, more and more companies go to the international level to communicate with their clients and establish their commercial relationships. However, globalization process can also create some serious moral and ethical dilemmas, which can have serious political and cultural consequences. Business scandals often arise on the basis of violation of human rights or business ethics. Samsung bribery scandal is one of the most remarkable events of the kind in the previous year, revealing many ethical and moral underpinnings and evidencing violations of code of ethics.
The case is closely associated with the scandal that caused impeachment of Park Geun-hye, the country’s president. The case reveals that heir apparent Lee Jae-yong has been accused of bribery and embezzlement. South Korea’s special prosecutor office declared charges against the company’s chief as well as the company’s four executives (The BBC News). Three of them resigned shortly after the announcement. Samsung has also acknowledged dismantling the corporate strategic office, which previously coordinated different activities of this big conglomerate. Furthermore, Samsung was also accused of providing donation to non-profit organizations controlled by Choi Soon-sil, Ms. Park’s youth friend and the one who enjoyed considerable government favors. Soon-sil was arrested a month earlier as soon as the indictment was introduced (the BBC News). The case centers on Mr. Lee who gave donation reaching $ 36 billion to the non-profit organizations controlled by Ms. Choi. They also proposed that this operation was carried out for the purpose of gaining governmental support for restricting the company and promoting a smooth transition to the leadership of Mr. Lee, the person who stands as the direct descendant of his father. The controversy focuses on the support from the pension fund, the accusation that was predetermined in relation to those donations. Samsung also admitted the donation of $ 20 billion, which was acquired by two foundations but refused to return the favors. Mr. Lee also confirmed that the company sponsored maintaining the horse for the equestrian career of Ms. Choi’s daughter.
The given situation gave rise to social unrest, which eventually led to the leakage of information and a political scoundrel. Close ties between Ms. Choi and President Park were critical in promoting the ethical violations and the reproach of the community. It has had a negative outcome for Samsung Electronics, leading to the trial and a big financial blow for the company. Mr. Lee’s arrest cannot influence short-term production processes, but it can definitely have long-term detrimental implications for the company’s further development. Samsung is one of the most influential and massive electronic companies in the world; the highlighted case can have inevitable and irreversible consequences as it usually happens when the chairman spoils the company’s reputation.
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From the ethical perspective, the political scandal ignited the public unrest and indignation because of the betrayal of the President who is considered to be the core of the nation. As a result, many people strived for redemption and sought some kind of revenge for the deception and unethical activities against the whole country. In order to reconcile its mistakes, Samsung and other stakeholders involved should make resolute changes and confessions and the President’s impeachment and the arrests of those involved were some of those activities. According to Chun, “In guilt culture, which exists mainly in Western countries, redemption derives from the individual’s recognition that their conduct has violated the laws of society” (n. pag.). Hence, when the individual thinks they are not guilty, refusal and proving their innocence in court can take place. However, in case they are not innocent, imprisonment is the only solution. In this respect, some major corporate scandals expect company’s executives to reimburse the damage from their mistakes via imprisonment. The so-called guilt culture can also introduce little enthusiasm for sanctioning executives engaged in the 2008 economic crisis. The absence of criminal prosecution is due to the challenges and disturbances regarding wider implication that such actions could impose on the national economy. Furthermore, in guilty culture the punishment of imprisonment is still considered as a way for accused people to pay their debt to the community. Similarly, firms can also be fined or punished by governmental measures.
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With regard to the above-presented concerns, it can be assumed that corporation should actively accept social responsibility and moral confession. The arrest of Lee Jae-yong was followed by the dismantling of the strategy office, which is the most loyal body. In addition, the company’s current social contributions should also be reconsidered with the introduction of stronger public commitment and an authentic CSR program. In fact, Samsung’s success plays an important role for the sustainability of the Korean economic welfare. In response to the scandal, subsidiaries created a large ratio of the country’s framework. It accounts for almost 13 % of countries’ exports (McNeill and Kirk) In this respect, the leader took responsibility for scandal and shame which was caused by the accusations and investigations; however, he denied the wrongdoing, assuming that he and other chairmen had never thought over the wrong moral consequences for the organization. As a result of the denial, the scandal reached its denouement and imposed some notably negative reputation on the company.
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A thorough economic analysis has revealed that the company does not have legal identity with 83 firms being under the control of the company with the Lee family taking over 46 % of shares. A former chief lawyer for the corporation Kim Yong-chul assumed that the company set up a $ 200 million slush fund to purchase prosecutors and politicians. Hence, Samsung soon became associated with corruption and immoral activities, which will be hard to withdraw (McNeill and Kirk). The company’s leader being on trial should have been more concerned with ethical issues and business outcomes prior to undertaking such activities.
Business ethics is an inherent component of each company’s operation because it supports the idea of transparency, commitment to clients, and presence of equality in terms of rewards to the employees. The absence of subjectivity can allow the employees to feel that their professional achievements and contribution to the company’s growth will be rewarded accordingly (Byford n. pag.). Samsung bribery case, however, reveals the consequences of violating these moral and ethical principles, which can also spoil the organizational culture and provide negative outcomes for managing the issue adequately. Therefore, the company’s manager should make appropriate steps for acknowledging the guilt and restructuring the company’s mission and vision to return the clients and public trust.
In conclusion, Samsung’s bribery scandal is regarded to be the most influential case of the past year because it highlights the problem of violating the principles of corporate social responsibility and transparent reporting. Furthermore, it is also the case when the managers and chairman neglected the business ethics by rewarding the individuals who did not deserve it and following their own interests. Eventually, the close relationships with the President made them overconfident and overwhelmed with their own desire to promote their revenues at the expense of false funding, rewarding people regardless of the professional achievements. Furthermore, the case has serious implications for the country’s political landscape and cause significant public unrest, and it will be a serious dilemma for the company to restore its financial health and reputation. In the nearest future, the company should reconsider its ethical background and provide a new principle of shaping strategies to regain trust of the clientele and ensure a better image of the company’s executives.