Samsung Code Of Conduct Analysis Research Papers Example

CONTENTS

Introduction 3

Overview of the Code 4
Corruption and Unfair Competition Practices 4
Confidentiality 6
Ethics, legality, and morality 6
Discussion and Conclusion. 9
Introduction
Together with corporate constitutional documents, a code of conduct is one of the most important instruments of an enterprise. It outlines social norms, rules and responsibilities often organization, which should be followed by its employees and suppliers. In accordance with the definition developed by the international Federation of Accountants, a code of conduct should contain principles, better standards, behavior and rules that define the decisions, systems of organizations and procedures in a way, which is beneficial to the key stakeholders while respecting the rights and privileges of everyone, who is somehow affected by the operations. Typically, all employees of a corporate entity should become familiarized with the provisions of the code of conduct in order to make correct decisions in all their dealings relating to the company performance (Pinnington, Macklin & Campbell, 2007).
Samsung Electronics is a multinational corporation headquartered in Seoul, South Korea. This company is one of the leading technological giants of the technological world, having a Mexican influence on South Korea political life as well as being one of the most significant economic players and taxpayers of the country. The revenue collected by Samsung 18% of the entire gross domestic product of South Korea.
The company has one of the most well-developed and sophisticated codes of conduct for its employees. However, still it contains some imperfections that, in particular, resulted in scandalous litigation in China. The human rights group sued the company for collaboration with a supplier, which used child labor. It shows that despite the good structure and welfare provisions encapsulated in this document, still there are many opportunities for improvement.
The purpose of this paper is to analyze the code of conduct of Samsung electronics in professional, legal, ethical and moral dimensions. Moreover, the paper seeks to identify gaps of this instrument and to provide a comparative review with its closest competitors.

Overview of the Code

The code is based on five primary principles which are observance of the ethical and legal prescriptions, clean organizational culture, respect for the customers, shareholders and employees, environmental, health and safety friendliness and strong commitment social responsibility. These principles are typical for many companies operating in the technological sector. In general, the company classifies between internal and external obligations. The first ones are those owed by the company employees to each other and to the company. The second ones are the obligations owed by the company to the external stakeholders. Although this categorization is informal, textual provisions of the instrument clearly identify this distinction. At the same time, these principles are the foundations of the corresponding chapters in the code. It is not explicitly mentioned, that they may be applied in the event there is any gap in this instrument, or some issue is regulated inadequately. For instance, Apple Inc. defined that honesty, respect, confidentiality and compliance other principles to which all company internal documents should correspond (Apple Inc, 2014).
Furthermore, the company recognizes that while the standards aimed at establishing the highest degrees of corporate integrity, the company realizes that the domestic legislation of its subsidiaries may impose different obligations on it employees (Samsung 2006). In these cases, the domestic close should supersede the global code of conduct. This provision is very useful because it helps the stakeholders to understand what course of action should be taken in the event of any legal conflict without fearing termination of their employment or other negative outcomes.

Corruption and Unfair Competition Practices

The code of conduct explicitly recognizes that the company strives to compete freely and fairly in all its business dealings around the world, all applicable international standards, and local laws. Furthermore, it recognizes that the company will not abuse a dominant market position and utilize any forms of physical or financial coercion to include unwanted items in their sales dealings. This provision is focused on the possibility of corruption cases when the company sales managers may utilize illegal methods of influencing the buyers or state regulatory authorities to receive approval for their products. In other words, the company acknowledges that fulfilling its sales plan does not have any priority over its opposition to corruption practices. The company hired several employees in Poland and in Hungary for their unlawful ‘lobbying‘of the local authorities to get the products of Samsung licensed (Pinnigton, Mcklin & Campbell,2007). Zero-tolerance policies to the corruption of such technological giants are extremely positive to the campaign against corruption on the international scale because they establish the trend, which is expected to be followed by other market players.
Secondly, the company recognizes that it does not permit the acceptance of financial gains, goods, share of stocks and other benefits from the customers or interested third parties for any activities, which may potentially violate the principles of fair trade and competition law. Although the message of this provision is relatively clear, an important imperfection is easily identifiable. The company emphasizes that it does not accept any benefits from the 'interested' third parties, which poses a burden of proof on the initiator of the dispute that someone was 'interested 'in a particular result. Considering the fact that the company has unlimited legal resources, this statement may be extremely difficult to prove.
Thirdly, the firm acknowledges that will not obtain or use trade secrets of its rivals and confidential information illegally. In legal parlance, there is a substantial difference between the concepts 'illegal' and 'unlawful' (Fletcher, 2000). Illegal means that some criminally punishable activities involved while unlawful signifies that the provision of administrative, civil or other legislation except criminal has been violated. Therefore, in the jurisdictions where trade secrets stealing or corporate espionage is not regulated by the criminal law, the company enjoys leeway in this regard. This is especially important for the jurisdictions of the developing countries, where the corruption laws are inadequately constructed. In the light of the fierce competition between Samsung and other global manufacturers of consumer electronics, this issue may raise serious ethical doubts.

Confidentiality

One of the provisions of the corporate code of conduct of Samsung manifests that the company and its employees will abide by the local laws relating to the protection of the employees privacy, confidential and personal information. In many countries and personal privacy is inadequately regulated. Furthermore, this provision does not emphasize that the firm respects the confidential information of the legal entities and governmentally based institutions. In general, it purports that in many jurisdictions Samsung's activities are limited by the applicable national legislation only, which may have the unfavorable attitude to the employees and other concerned parties. For instance, in the majority of Muslim countries personal privacy is not legally discussed at all. Therefore, any violations perpetrated by the firm are possible in this regard.

Ethics, legality, and morality

One of the most controversial clauses of the corporate code of conduct is located in these dimensions. Firstly, it is recognized that the company will not tolerate any activity, which utilizes company proprietary information for private gain. The concept of private gain is not sufficiently explored in this regard. For instance, the company may have in the pipeline significant discount policies. If any employee informs his friends and family members about this, and all they place orders with the firm, an issue arises whether this activity should be classified as contradictory to the company policies. Clearly, the company should have provided an explicit definition of private gain. Otherwise, practically any action taken by an employee or a manager relating to purchasing corporate products may be construed as breaching the code of conduct.
Secondly, this instrument provides that no employee may have any form of business or financial relationship with the company customers, suppliers or competitors if these relations may impair his independent judgment necessary for the best business interests of the company. A reservation is made that these relationships are prohibited even if 'they appear to impair the best interests of the firm'. This provision is given in a very subjective way. To be more specific, different people may have different opinions regarding the actions, which may appear to impair the judgment. The 'best practice' standards of the corporate code of ethics completion mandate to list the type of relations, which may be hypothetically harmful to the company. This approach has been followed by the Microsoft by Apple.
An important provision in ethical context is that 'the company has zero-tolerance for any type of behavior, which is likely to offend or cause unpleasant feelings of other employees'. While the concept of offense is relatively understandable, unpleasantness is very ambivalent term, which should be avoided in the all legally significant documents. In the light of the fact that Samsung electronics is a multinational company, different cultural misunderstandings, and unintentional unpleasantness is highly possible. For instance, a firm handshake given by an American manager to the member of Chinese research and development center is acceptable under American standards while it is an instruction personal freedom in China business culture. Applying any form of punishment to the American employee under this scenario is both unreasonable and unproductive. The company should have added the phrase that only intentional offenses or unpleasantness is not tolerated. Furthermore, it should have assumed an obligation to instruct all employees about cultural differences and business ethics practices of its different national departments. Under the current version of the code of conduct, when an employee acting in good faith offends his particularly sensitive colleague, the company becomes entitled to apply disciplinary penalties.
Then, the code of conduct explicitly recognizes that an employee may not make any personal requests, which is in conflict with state, national or local law. In many countries, the legal regimes are undemocratic. Furthermore, revolutions and government overthrows have become common in our age. These employees may be the members of the different civil advocacy groups, democratic unions, and other affiliations aimed at improving the living standards of particular countries. Some of their activities outside employment may be in conflict with the local legal norms, but they may be consistent with the principles of justice and spirit of democracy. Local, national or state laws may be illegitimate, and their violation is usually justified when the authoritarian government is overthrown. Therefore, recognizing the fact that the company has a global presence, including the countries where the tyrants are in power, this provision may restrict civil duties of the company employees.
Finally, the code of conduct manifest that any employee is not permitted to maintain any employment or be engaged in any form of business that may potentially prevent him from performing his work commitments in full, including overtime assignments. This provision is very ambiguous because it is not clear what is understood under the phrase in full. Furthermore, overtime assignments can be given at any time, which limits personal freedom often employee in his other dealings. The company should have written that an employee must not engage in any actions, which may violate his job schedule. The current version of the code of conduct gives the managers many opportunities to overwhelm an employee with different assignments, which can make the realization of his other interests outside the company impossible. Besides, this provision is very subjective. Explicit criteria for performing one's commitments in full should have been given.

Discussion and Conclusion.

The code of conduct of Samsung is relatively consistent with the current trends and best practices. Most importantly, it reflects important elements describing company attitude to confidentiality, privacy of its employees and the possibility of unfair competition practices. The provisions of the Code balance the interests of the company and the employees’ ones. In general, it can be concluded that the most important areas of the firm’s core activities are covered by this Code of Conduct. Any employee can find decision-making criteria in this document, if he faces a problematic situation.
Secondly, some imperfections are still present. In particular, the company should remove all ambivalent and ambiguous provisions. Many of them are subjective, providing different options for their interpretation. Multinational character of the company purports that similar provisions may be understood ambivalently by the different cultures.
Finally, incorporating the guiding principles (similarly to Apple Inc.) may be an effective strategy to fill the gaps and provide guidance for the unregulated cases. Provided that these inadequacies are removed, this Code of Conduct may become exemplary for the industry.

References

Apple Inc.(2014). Business Conduct. The way we do business worldwide
Fletcher, G. (2000). Rethinking the criminal law. Oxford New York: Oxford University Press.
Pinnington, A., Macklin, R. & Campbell, T. (2007). Human resource management ethics and employment. Oxford New York: Oxford University Press.
Samsung Electronics Co., Ltd.(2006). Global Code of Conduct.