Corporate Social Responsibility in Samsung - Essay Example

?Corporate Social Responsibility: Samsung Introduction The operation of companies and multinationals are today guided by international standards and regulations that call for social responsibility and commitment not only to the consumers and the target market but to the entire society. Firms thus have obligations that transcend the domestic and international requirements on trade to include social responsibility and commitment to the surrounding environment (Flamer, 2013). A global leader in business is today judged not be the activities that lies within the walls of the company but by those that lies beyond them. Corporate social responsibility is a commitment by an organization to integrate responsible and ethical behaviour that contributes to both the economic development of the society and improves the quality of the life of the workforce, their families and the society by extension. It is a requirement today for firms to provide an annual report on the corporate responsibility status and how they intend to improve on such a situation (Yoo-Chul, 2010). Samsung is electronic manufacturing multinational that is based at the Samsung town in Seoul, South Korea and was founded by lee Byung-Chul in 1945; Samsung has grown to be one of the leading manufacturers of household electronics and other computer devices. It operates a number of conglomerates in different countries where most of its products are manufactured before distribution to the international markets. Samsung electronics, one of Samsung subsidiaries is the leading information technology companies according to a report released in 2012 based on the revenues of the company. The company controls a sizeable influence of the economic and political policies that shape the development of the home country and is thus a powerful image in the country (Raymond, 2010). Samsung’s corporate social responsibilities Samsung has adopted a greater approach to corporate social responsibility that has contributed immensely to its development and growth and also to the positive image it has both in the home and international markets. This paper seeks to analyze the practices adopted by the company as part of their social corporate responsibility practices and how these practices has had an influence on the local and international markets (Lee, 2007). Samsung electronics believes that in their quest to realize sustainable growth and business performance that improves the value of the business, responsibility to the corporate citizens and the local communities must be improved. As a result, the company has developed a number of programs that aim at improving the lives of the people both within and without its ranks. The company, in line with this resolution established a social contribution program that seeks to help people with need within the local communities. In this program launched in 1995, all employees are enlightened on the need to contribute towards improving the life of the general population especially of those communities around the company’s establishments (Samsung Inc, 2011). A social contribution secretariat was developed by the company to coordinate the collection of the funds from the employees before developing framework on how it will be used. Experts in these secretariats develop policies that support employee’s volunteer programs that are part of the company’s corporate social responsibility program. The CSR motto of Samsung is ‘another family’ to illustrate the commitment of the company to the society as a whole just like any family within the society would do. This program supports better future for the teenagers, assist children from low income families and the implementation of a family wellbeing program. In 2007, as part of the secretariats commitment to social responsibility, over 2500 company employees volunteered to contribute to in undertakings that were geared towards improving the lives of the surrounding communities (United Nations, 2009). Active involvements in societal activities improve an organizations image and public perception and this is a fact that Samsung has integrated into their CSR program which seeks to make a difference through active participation of the company. In actively participating in improving the lives of the locals, Samsung engage in social welfare activities, culture and arts, academics and education programs, environmental restoration programs and international exchange and volunteer programs. The company established the stone scholarship foundation to provide education opportunities to the disabled university students across Asian countries (Kim, 2013). This program has enabled a number of students gain access to education both in the local and international universities. The establishment of one company, one village sisterhood ties seeks to help farmers in the domestic arena to increase the farm outputs through the provision of farm inputs and fertilizers. This program has been applauded for its contribution to the growth of agriculture and improved food security both in South Korea and the neighbouring countries. This village also established computer academy and materials for the education of the visually challenged members of the society (Lii, 2012). Samsung’s corporate social responsibility has also been extended beyond the social aspect to encompass the improvement of their business engagements and partnerships with other companies. In 2003, as part of the CSR program, the company announced a major supplier support program that was meant to help solve technological issues that were affecting the performance of the partner companies and suppliers. The suppliers and partners are allowed to participate in Samsung partner’s day, an activity that enables the company share management goals and strategies with their partners (Peloza, 2007). Corporate social responsibility cannot be complete and inclusive if it ignores the impacts of its activities to the environment and the surrounding ecosystem. A company of Samsung’s stature must thus include a comprehensive plan on environmental conservation in its CSR program for such a program to be successful and worth the inputs. Samsung’s philosophy calls for the contribution of the company in ensuring a better global society by preserving the planet through environmental related activities, safety and human health (Snider, 2003). Environmental preservation and conservation was integrated into Samsung’s core values way back in 1992 when the company developed the green movement policy. The company created an environment and safety committee and implemented an environment and safety management system that was based on the ISO 14001 and OHSAS 18001 certification. Through this initiative, the company established five major segments that were mandated with the responsibility of developing environmental sustainability program (Ramstad, 2009). Samsung has also adopted cleaner production technologies by revamping its manufacturing processes and facilities thus enabling it to revert to alternative production methods. As a result, the company has minimized pollutants discharged to the atmosphere during production thus contributing to the reduction of greenhouse effect. In this respect, the company developed the ‘eco-design’ products that were meant to develop products with minimal environmental impact in every aspect from production and manufacturing. This has strengthened the resolves of the company to preserve the environment and reduce the negative impacts that it production processes may have in the environment during production, transport and marketing (Ramon, 2012). The behaviour and practices of the partners of a business demonstrates its commitments to the implementation of a program or abidance to a given rule. Samsung thus understands the need to ensure that its suppliers abide to the electronic industry citizenship coalition code of conducts in fulfilling corporate social responsibility. As a result, the company reviews the practices and behaviours of its suppliers with the intentions of ascertaining the extent to which they abide to these codes of conducts. The company has also adopted third party validation criteria that seek to ensure that the company only handles supplies that have been validated. In doing this, the company collaborates with local governments and law enforcement agencies to ensure that the raw materials supplied to them are legal (Frank, 2008). The company also conducts periodical evaluation of suppliers based on the electronic industry citizenship coalition code of conducts to ascertain whether the suppliers abide to the rules and regulations set by the coalition. In doing this, the company assesses the supplier’s ability to abide to the management systems and risk assessment and management criteria set by the coalition (Bae, 2010). These include voluntary employment, child labour avoidance, working hours, and wage and welfare programs. The emergency preparedness and occupational injury and illness mitigation measures and abilities are also analyzed by the company in line with its CSR policy. Suppliers to Samsung must also abide to international environmental management certification and safe management of hazardous substance. All these practices have enabled Samsung to maintain a high CSR profile and score high of social responsibility as compared to other market players in the electronic industry (Gottschalk, 2011). Comparison of Samsung’s corporate social responsibility with its competitors Samsung has received accolades for its adherence to the coalition’s code of conduct and continued implementation of its corporate social responsibility as compared to other competitors and market players. Apple Inc is one of the major competitors to Samsung especially after the later entered the Smartphone marketed and has increased its dominance in the mobile telephone markets. Apple Inc has however been criticized for its lack of compliance to its code of conducts and the coalition’s requirements on human labour and employment. The company has adopted the use of sweatshop labour, a practice that is against the international labour requirements and the use of child labour. The company also engages in unnecessary patent wars which affects competition and the development of mobile products. The latest patent war that captured the attention of many market players and tainted the image of Apple Inc involved the company with Samsung. Such anti-competitive behaviours cast doubts to the company’s ability to behave responsibly and adopt measures that ensures healthy market engagements and behaviours (Sunday, Emmanuel and Oti, 2012). Nokia has been considered as a leading mobile firm manufacturing company and has also been at the forefront in its corporate social responsibility. Before the introduction of smartphones, Nokia dominance in the mobile telephony market was much more pronounced and most of its products were produced in Finland under the European Union regulations. With such tight regulations, the CSR of the company was assured and this explained the high performance of the company. However, with increased competition in the mobile market, Nokia has closed most of its firms in Europe and opened subsidiary units in Asia, an environment with poor labour regulatory framework (Samsung electronics, 2011). This has reduced tremendously the image of the company and its corporate social responsibilities as reviewed by a number of journals. Nokia also developed the Nokia arts awards in 1999, a program that seeks to promote the development of creative arts across the Asia pacific among the youths. This program is quite similar to the culture and arts programs that were developed by Samsung in countries like South Korea, United States and France. As part of its rallying call, Nokia seeks to make connections with the youths by promoting positive youth development through the creation of a program that gives the youths an opportunity to make a connection to their communities. The three perspectives (industry, resource, and institution-based views) that explain the firm’s policy and action Samsung’s corporate social responsibility is shaped by a number of factors including the nature of the industry competition, the available resources and the views of the institution. The manufacture of electronic devices such as mobile phones, LCD television set, fridges and other appliances is influenced by a number of regulatory laws that depend upon the operation limits of the company. Such shapes the sustainability policy of Samsung and has contributed to the development and adoption of this policy (ASOCIO, 2004). According to the firm’s sustainability approach to corporate social responsibility, the activities of the firm should ensure the development of the economy, the environment and the society. However, this is subject to the availability of funds to implement these sustainability projects such as enhancing education and innovation, development of environment friendly products and fair trade and compliance (IBM, 2004). Challenges and opportunities of Samsung’s CSR framework Ensuring sustainability and adherence to corporate social responsibility remains an uphill task especially for firms that operate in the electronic sector. This is especially so due to the rising need for improved environmental conservation and reduction of greenhouse gas emission. Samsung has thus been presented with a number of challenges that make it tough for the company to implement it program (Samsung Corporate Social Responsibility Program, 2007). Electrical and electronic waste is one of the major challenges that affect the company in struggling to implement a sustainable CSR practices. Electronic waste has a number of significant negative effects to the environment and proper handling and disposal mechanisms must be developed by Samsung if it seeks to be viewed as a company that cares for the society wellbeing (Hernandez-Murillo, 2009). From a company that was initially based in South Korea, Samsung has grown to become an international electronic manufacturer and marketer with significant influence in Europe, the United States and Asia. International growth into a multinational has changed the dynamics for Samsung Inc and this has also affected the magnitude of its corporate social responsibility program (Ankit, 2011). Cross-cultural differences affect the nature of the CSR activities and policies of Samsung and this thus calls for a more inclusive program. Culture and art has been a major activity of Samsung as part of its CSR activities and this is affected by the different cultures present in the different countries that the company operates in. the number of needy and disabled students also increases as the scope of operations of the firm expands. This means that the company must increase its allocations to this project for improved sustainability and benefits of the projects to the communities as intended (Samsung electronics, 2012). The development of a sound corporate social responsibility framework however has a number of benefits to Samsung especially with increased competition and rivalry in the electronic industry. In seeking to increase its influence in a market that is controlled by other competitors, Samsung can develop a CSR framework that doubles as a marketing tool for the company and endear the consumers to its products (Apple, 2009). The stone foundation scholarship can be used by the company to increase the market for its products especially among university students and staffs in institutions where they offer scholarships and grants to students. This can be used as a pre-engagement condition to enable the company derives not just social but economic benefits from the programs. Art and culture remains one of the most preserved practices of human life and any organization that makes it part of its CSR policy has the benefits of reaching a larger market as compared to others. Samsung should therefore remould its CSR policy on culture and arts to make it a marketing sponsorship program that provides the company with marketing and promotional platforms that increases the market it controls. Such a program will not only improve the impact that the company has on the society but also increase its market share and influence (Nokia Inc, 2012). Conclusion The development of a sound and sustainable corporate social responsibility framework has enabled it improve its stake and market competitiveness in the highly competitive electronic market. From a small company based in Korea, the company has developed to become a leading multinational that produces household electronic appliances and mobile phones. It rates well above its competitors and other market players as far as the implementation of their program on sustainability is concerned. References Ankit, B., 2011, Competitor analysis: Samsung, Nokia and Sony Erickson case study. [Online] Available at: [accessed 25/08/2013] Apple, 2009, Supplier code of conduct: prevention of involuntary labour. [Online] Available at: [accessed 25/08/2013] ASOCIO, 2004, “Corporate social responsibility”, ASOCIO policy paper. [Online] Available at: [accessed 25/08/2013] Bae, J., 2010, Socio-contextual influences on the Korean news media interpretation of Samsung’s $847.6 million donation. 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