DESIGN AND PROFESSIONAL SKILLS

ETHICS REPORT

Samsung should be more considerate towards society and environment

January 2018

Samsung Group is a multinational conglomerate company originated from the South Korea
with a big grip of business in the technology market. One of their product is the smartphone
segment of which have already conquered over 20% of the world market share5. They also
produce a technology ranges from home cookware gadget to the personal computer. Despite
their big tycoon in the market, there has been a few issues rise regarding the ethical conduct
of their business. This report will look into some of the reported issues and discuss about how
they can improve and learn.

Honesty and Fair Trading

Firstly, for a big company to ignore its customer is a bad decision because it might jeopardise
the trustiness of the customer in the long run and might eventually lost them in the future.
Samsung has been notoriously known for its bad customer service team and had not done
any significant approach to improve this issue but instead made it worst by trying to cover it
up from the rest of the world1.

In 2013, it has been reported that at least two cases of Samsung Galaxy S4 explosion. One of
the user upload a video on YouTube about the incident and Samsung did respond for that
video2. Samsung responded through letter asking the user to take down the video and offer
to swap the burnt phone with a newer one. Judging from the action of Samsung, it depicts
that their ethics of putting customer trust and honesty in conducting their business as a non-
prioritising matter. The issues may not only violate their honesty but also their fairness in
conducting their business as transparent as possible.

Health and Safety concern

In 2016, one of the Samsung products, Galaxy Note 7 has been reported to overheat and
eventually explode in the possession of the user3. And again, Samsung tried to make cover of
the incidents and hoping that the customer that brought up the issues to the net will take it
back without any legal charges. Not just that, the replacement product also had been caught
in the same incidents multiple of times and Samsung is aware with those incidents but instead
to act silent. It is really dangerous for the daily basis usage to the user as it would have a high
possibility to explode in normal operating condition and risk the safety of the user. In fact, it
did explode on three different cases in just only a duration of a week1.

This come down to the root of the incidents where it all started, the flaw that cause the
explosions came from the design and the manufacture of the battery where Samsung
desperately producing a thinner battery without enough room for error. The battery Made
by Samsung SDI group were too small in one corner causing the negative electrodes to be
bent and possess a high possibility of short circuit4. On the manufacture line, Samsung,
through Ampered Technology Ltd, welded the battery incorrectly making the left part of the
battery to be able to penetrate the protective insulation of which possible to cause the fire.

Treatment of worker

Samsung also has been allegedly reported to violates the law regarding the labour. They have
been indirectly hired the children as young as 14 years old to work in their production line
through HEG Electronics company based on the statement by China Labor Watch (CLW) of
which responsible to investigate the Chinese production facility working conditions and
regulations6. When the issue is surfaced to the Samsung management, they denied the fact
that there is some number of children present in their production line 6.

Samsung instead responded that they are serious and considerate in maintaining a health and
safety of their employees and strictly maintain a zero tolerance towards child labour. On
further investigation by Samsung itself found out that there is a trace of some child labour in
their supplier company and they come to a decision to suspend any business with the involved
supplier6.

CLW also conduct a thorough investigation on HEG and found out over 100 of their employees
are left without any subsidy of overtime and night shift. The Chinese law requires the
employees to be paid of at least 15 or 2 times of the normal wages and Samsung clearly
violates this through their supplier company, HEG. Even though not 100% of the employees
in the HEG are working to supply for Samsung needs, Samsung still should be liable in this
matter as it in their business chain because they are benefiting from the company that
violates their employees’ rights6.

Cautions

Samsung, a company that has a big name in the market should, in fact have the big resources
as well, by resources I mean their ability to detect the internal and external issues and ability
to solve it. But, based on the discussed evidence, it shows that Samsung are lacking to make
full use of their resources to conduct a clean and ethical business. The important things for
Samsung that they need to consider is regarding their relation towards their consumer as it is
one of their big flaws. They will eventually in the future known to customer as a company that
really cares about number they make in profit and ignorance towards the customer.

In terms of safety, it should be in a more serious consideration because based on what had
happened, it resulted in an awful outcome in terms of reputation and profit. Samsung had to
even recall the entire line of the Galaxy Note 7 and resulted in a plenty of some problem, not
only in the loss of profit, but also in term on how they are going to manage the recalled unit,
where they are going to put it, recycle? dumping it? All of the options have its own cost that
are responsible by Samsung. So, there is a lot that we can learn from between a rushing into
production and a neat consideration on the physical and internal specification of the product
before it being put into production line.
A sustainable product also need to have a sustainable production scheme. Based on the case
on the child labour and the low wages of the labour, it clearly does not practice a sustainable
scheme by violating the ethical and legal rules set by the Chinese government. Samsung
should be more aware on what is happening in their production lines no matter whether it is
from their own company subsidiaries or their external partnered companies.

Conclusion

Clearly, the ethical issues do not really happen in only a troubled or collapsed companies. It
happens almost everywhere when human decides to do something over without thinking the
rational and effect of their action towards the environment and the society. For Samsung,
they can be more considerate without being manipulated by the number they can make in
term of profit. There is a lot that need to be done in order to stay clear from an unethical
business practice referring to their number of employees they got and number of country
that they have their base in, but, it all comes to willingness and effort to stay clear from those
unethical scandal and issues.

Bibliography
1. Blair, M., 2016. Nicholasville man injured by replacement Samsung phone. [Online]
Available at: http://www.wkyt.com/content/news/Nicholasville-mans-replacement-
Samsung-Galaxy-Note-7-catches-fire-396431431.html
[Accessed January 2018].
2. Epstein, Z., 2013. Samsung tells customer to shut up about Galaxy S4 fire and they’ll
swap his burnt phone. [Online]
Available at: http://bgr.com/2013/12/09/galaxy-s4-fire-youtube-video-takedown/
[Accessed January 2018].
3. Golson, J., 2016. Samsung knew a third replacement Note 7 caught fire on Tuesday
and said nothing. [Online]
Available at: https://www.theverge.com/2016/10/9/13215728/samsung-galaxy-
note-7-third-fire-smoke-inhalation
[Accessed January 2018].
4. Heathman, A., 2017. We finally know why Samsung's Galaxy Note 7s 'exploded'.
[Online]
Available at: http://www.wired.co.uk/article/galaxy-note-7-issues-what-happened
[Accessed January 2018].
5. IDC, 2017. Smartphone Vendor Market Share, 2017 Q1. [Online]
Available at: https://www.idc.com/promo/smartphone-market-share/vendor
[Accessed January 2018].
6. Reisinger, D., 2014. Samsung supplier factory found to use child labor, watchdog
says. [Online]
Available at: https://www.cnet.com/news/samsung-supplier-factory-found-to-have-
child-labor-watchdog-says/
[Accessed January 2018].