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Samsung, Shame, and Corporate Atonement

Understanding outrage in different cultures.

South Korean political leaders are more determined than ever to correct the country’s reputation for being too lenient on the country’s family-controlled business dynasties known as chaebol . The winner of South Korea’s presidential election, Moon Jae-in, is coming to power in the wake of a corruption scandal that ousted President Park Geun-hye. Her impeachment followed the arrest of Samsung’s de facto leader Lee Jae-yong on bribery charges. Samsung’s path to repairing its damaged reputation is different than if it were based in a Western country. The hidden rules of redemption differ across cultures. In guilt cultures, which exist generally in Western countries, redemption derives from executives serving jail time and company fines and settlements. But in a shame culture such as Korea’s where the public decides what is right, global companies are much more vulnerable. Global firms often fail to manage such crises because they focus on proving innocence. Samsung fundamentally needs actively accept moral and social responsibility. Now is the time for the executives’ culture of loyalty to the “family” to be replaced by a culture of loyalty to the “organization.”

For the past several months, South Korea has been roiled by accusations of corruption in its government and major businesses. The role of the country’s family-run businesses, and whether or how they are held to account for wrongdoing, is under intense scrutiny.

• Rosa Chun is a professor of business ethics and corporate social responsibility at UCD Michael Smurfit Graduate Business School.

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Remarkable Recovery: Samsung Crisis Management Case Study

Have you ever wondered how a global tech giant like Samsung managed to navigate a major crisis and bounce back stronger? 

In the world of corporate governance, effective crisis management can be the difference between irreparable damage to a company’s reputation and a successful recovery. 

In this blog post, we delve into a Samsung crisis management case study to learn about exploding batteries to the intricate strategies employed to restore trust.

Samsung’s journey offers valuable insights into the intricacies of crisis management in the digital age. 

Join us as we explore the key lessons learned and best practices from this high-stakes situation, shedding light on the remarkable recovery efforts that propelled Samsung forward.

Let’s learn about sailing through tough times through Samsung crisis management case study

Background of Samsung History and growth of Samsung as a global conglomerate 

Samsung, founded in 1938 by Lee Byung-chul, started as a small trading company in South Korea. Over the years, it steadily expanded into various industries, such as textiles, insurance, and retail.

In the 1960s, Samsung ventured into electronics, marking the beginning of its transformation into a global conglomerate.

With a focus on technological innovation and a commitment to quality, Samsung rapidly gained recognition for its consumer electronics products, including televisions and appliances.

Throughout the 1980s and 1990s, Samsung significantly diversified its business portfolio, entering the semiconductor, telecommunications, and shipbuilding industries.

This diversification strategy helped Samsung become a key player in multiple sectors, solidifying its position as a global leader. Notably, Samsung’s semiconductor division became one of the largest chip manufacturers in the world, supplying components to various electronic devices worldwide.

Samsung’s ascent continued in the 2000s, driven by its successful expansion into the mobile phone market. The introduction of the Galaxy series, powered by the Android operating system, catapulted Samsung to the forefront of the smartphone industry.

The company’s innovative designs, cutting-edge features, and aggressive marketing campaigns contributed to its rise as a major competitor to Apple’s iPhone.

With its global reach, Samsung has consistently ranked among the world’s largest technology companies, epitomizing South Korea’s economic prowess and technological advancements.

Samsung has also been considered one the best companies that successfully managed and implemented change initiatives.

Overview of Samsung’s position in the technology industry

In the consumer electronics segment, Samsung has established itself as a dominant force. Its diverse product lineup encompasses televisions, smartphones, tablets, wearables, home appliances, and audio devices.

The Galaxy series of smartphones, in particular, has enjoyed immense popularity and has emerged as a fierce competitor to other industry giants. Samsung’s televisions are also highly regarded for their cutting-edge display technologies, such as QLED and MicroLED.

The company’s advancements in semiconductor technology have contributed to faster computing speeds, increased storage capacities, and improved energy efficiency.

Samsung’s influence extends beyond consumer electronics and semiconductors. The company is actively involved in telecommunications infrastructure, including the development of 5G networks and the production of network equipment.

Samsung has also made notable strides in the realm of software solutions, including its own mobile operating system, Tizen, and various software platforms for smart devices.

Samsung Galaxy Note 7 Crisis

The Note 7 battery issue marked a significant crisis for Samsung, leading to a widespread recall of the flagship smartphone and causing considerable damage to the company’s reputation.

The crisis began in September 2016 when reports emerged of Note 7 devices catching fire or exploding due to faulty batteries. These incidents raised concerns about consumer safety and triggered a wave of negative publicity for Samsung.

Upon receiving initial reports of battery-related incidents, Samsung initially responded by issuing a voluntary recall of the Note 7 in September 2016. The company acknowledged the problem and expressed its commitment to addressing the issue promptly and effectively.

Samsung attributed the battery malfunctions to a manufacturing defect, specifically a flaw in the design that caused a short circuit.

To ensure customer safety, Samsung advised Note 7 owners to power down their devices and refrain from using them. The company swiftly implemented measures to exchange the affected devices, offering customers the option to either replace their Note 7 with a new unit or receive a refund.

Samsung also collaborated with mobile network operators and retail partners to facilitate the recall process.

In its initial response, Samsung took steps to communicate with customers and the public about the issue. The company published official statements expressing regret for the inconvenience caused and assuring customers of its commitment to resolving the problem. Samsung emphasized its dedication to quality and safety, promising to conduct thorough investigations and implement necessary improvements to prevent similar incidents in the future.

Media coverage and public perception during the crisis

During the Note 7 crisis, media coverage played a significant role in shaping public perception and amplifying the negative impact on Samsung’s brand.

The crisis received extensive coverage from both traditional media outlets and online platforms, leading to widespread awareness and public scrutiny. Here’s an overview of media coverage and its influence on public perception:

• News Outlets: Major news organizations across the globe reported on the Note 7 battery issue, highlighting incidents, the recall, and subsequent developments. Television news segments, newspapers, and online news articles extensively covered the crisis , emphasizing the potential safety risks and consumer concerns. The constant media attention contributed to the widespread dissemination of information and increased public awareness of the issue.
• Online Platforms and Social Media: Social media platforms played a pivotal role in the crisis, enabling the rapid spread of information and user-generated content. Users took to platforms such as Twitter, Facebook, and YouTube to share their experiences, express concerns, and criticize Samsung’s handling of the situation. Viral videos, photos, and personal accounts of Note 7 incidents gained traction, further fueling negative sentiment and influencing public perception.
• Expert Analysis and Opinions: Alongside news coverage, experts and industry analysts provided their insights and opinions on the crisis. Their assessments of Samsung’s response, the potential causes of the battery issue, and the implications for the company’s brand reputation contributed to the overall narrative. Expert opinions had the power to sway public perception and shape the understanding of the crisis.
• Consumer Forums and Discussion Platforms: Online forums and discussion boards dedicated to technology and consumer experiences became hubs for discussions surrounding the Note 7 crisis. Consumers shared their frustrations, exchanged information, and warned others about potential risks. These platforms served as gathering places for individuals affected by the crisis and amplified the negative sentiment surrounding Samsung’s brand.

Financial implications and losses incurred by Samsung

The Note 7 crisis had significant financial implications for Samsung, resulting in substantial losses for the company. Here are some of the key financial impacts experienced by Samsung as a result of the crisis:

• Recall and Replacement Costs: The recall and replacement process incurred significant costs for Samsung. The expenses involved in collecting and replacing over 2 million of Note 7 devices, including logistics, shipping, and refurbishment, were substantial. The costs also encompassed the testing and certification of replacement devices to ensure their safety. The total recall cost was estimated at $5.3 billion.
• Decline in Sales and Market Share: The crisis had a detrimental impact on Samsung’s sales and market share in the smartphone industry. As consumer confidence in the Note 7 and Samsung’s brand reputation declined, potential buyers shifted their preferences to alternative smartphone options. The decline in sales of the Note 7, coupled with the negative impact on the perception of other Samsung products, led to a loss of market share for the company.
• Stock Price Decline: The Note 7 crisis had an immediate impact on Samsung’s stock price. News of the battery issue, recalls, and subsequent negative media coverage led to a decline in Samsung’s stock value. Samsung shares fell approximately to 7 percent right after 2 months of the crisis.

Crisis Management Strategy Employed by Samsung

Following are the key aspects of Samsung Galaxy Note 7 crisis management strategy:

Immediate actions taken by Samsung to address the crisis

In the face of the Note 7 crisis, Samsung swiftly implemented a range of immediate actions to address the situation and mitigate the impact on consumers and the company’s brand reputation. Here are some of the key actions taken by Samsung:

• Voluntary Recall: As soon as reports of battery issues emerged, Samsung initiated a voluntary recall of the Note 7. This proactive step demonstrated the company’s commitment to consumer safety and willingness to take responsibility for the problem.
• Temporary Production Halt: To address the root cause of the battery issue, Samsung temporarily halted production of the Note 7. This decision aimed to prevent further distribution of potentially defective devices and allow for thorough investigations and corrective measures.
• Transparent Communication: Samsung made efforts to communicate openly and transparently about the crisis. The company issued official statements and press releases acknowledging the problem, expressing regret for the inconvenience caused, and reassuring customers of its commitment to resolving the issue. Transparent communication was crucial in maintaining trust and providing timely updates to affected consumers.
• Collaboration with Authorities: Samsung collaborated closely with regulatory authorities and industry experts to investigate the battery issue comprehensively. By engaging external expertise, the company aimed to identify the root cause and develop effective solutions. This collaboration demonstrated Samsung’s commitment to finding the best possible resolution.
• Customer Support and Safety Guidelines: Samsung provided clear instructions to consumers regarding the use of Note 7 devices, emphasizing the importance of safety. The company advised customers to power down their devices, participate in the recall, and utilize alternative devices in the interim. This approach prioritized customer safety and aimed to prevent further incidents.
• Increased Battery Testing and Safety Measures: Samsung implemented enhanced battery testing procedures and stringent safety measures to prevent similar incidents in the future. The company adopted more rigorous quality control processes, including additional safety certifications and testing standards, to ensure the highest levels of product safety.

Communication strategies employed by Samsung

Samsung employed various communication strategies to address the Note 7 crisis and manage the impact on its brand reputation. Effective communication was crucial in maintaining transparency, addressing consumer concerns, and rebuilding trust. Here are some of the communication strategies employed by Samsung:

• Official Statements and Press Releases: Samsung issued official statements and press releases to provide updates on the progress of the recall, investigations, and corrective actions. These statements expressed remorse for the inconvenience caused and reiterated the company’s commitment to customer safety. Clear and concise communication helped keep customers informed and reassured them that Samsung was actively working to resolve the issue.
• Direct Customer Communication: Samsung directly communicated with customers to provide instructions and updates on the recall process. The company utilized various channels such as email, SMS messages, and notifications through its official website and smartphone apps. This direct communication ensured that customers received important information and guidance regarding the recall and replacement program.
• Social Media Engagement: Samsung actively engaged with customers and the public on social media platforms, including Twitter, Facebook, and YouTube. The company responded to customer queries, addressed concerns, and provided updates on the progress of the recall. By engaging in two-way communication, Samsung demonstrated its willingness to listen, respond, and provide assistance to affected customers.
• Collaboration with Industry Experts: Samsung collaborated with industry experts, battery manufacturers, and regulatory authorities to investigate the root cause of the battery issue. This collaboration was communicated to the public, showcasing Samsung’s commitment to finding solutions and ensuring that the necessary expertise was involved in resolving the crisis.
• Advertisements and Marketing Campaigns: Samsung launched advertising and marketing campaigns focused on rebuilding trust and emphasizing its commitment to quality and safety. These campaigns highlighted Samsung’s dedication to addressing the issue and regaining consumer confidence. Advertisements often emphasized the company’s rigorous testing procedures and quality control measures to assure customers of the safety of its products.
• CEO Apology: Samsung’s CEO issued a public apology, taking personal responsibility for the crisis and expressing regret for the inconvenience and concern caused to customers. The CEO’s apology aimed to convey sincerity, empathy, and a commitment to rectifying the situation, while also reinforcing the company’s accountability and determination to regain trust. The apology was published on a full page in 03 major US newspapers – the Wall Street Journal, The Washington Post and The New York Times.

Collaborations with regulatory authorities and industry experts

Samsung worked closely with government agencies and regulatory bodies in various countries where incidents related to the Note 7 were reported. The company shared information, conducted investigations, and cooperated with authorities to ensure compliance with safety regulations and guidelines. Collaboration with government agencies helped align efforts to address the crisis and establish industry-wide safety standards.

In the United States, Samsung collaborated with the CPSC, an independent federal agency responsible for ensuring the safety of consumer products. Samsung worked together with the CPSC to investigate the battery issue and coordinate the recall process. This collaboration ensured that the recall efforts followed established safety protocols and provided consumers with accurate information.

Samsung collaborated with battery manufacturers to investigate the specific manufacturing defects that caused the battery issue. The company worked closely with these partners to analyze the battery designs, manufacturing processes, and quality control measures. By involving battery manufacturers in the investigation, Samsung aimed to identify the root cause and implement corrective actions to prevent similar issues in the future.

Samsung engaged independent testing labs to conduct thorough assessments of the Note 7 batteries and verify the effectiveness of corrective measures. These labs specialized in battery testing and certification, providing expertise and unbiased evaluation of the battery performance and safety. Collaboration with independent testing labs helped validate Samsung’s efforts to address the battery issue and instill confidence in the effectiveness of the solutions.

Post-Crisis Recovery and Rebuilding 

Samsung implemented more stringent quality control measures across its product development and manufacturing processes. This included enhanced battery testing protocols, increased inspections, and stricter quality assurance standards. By demonstrating a commitment to producing reliable and safe products, Samsung aimed to rebuild customer trust.

Extended Warranty and Customer Support: Samsung extended warranty periods for existing and new devices, including the Note 7, to provide customers with added assurance. The company also enhanced its customer support services, ensuring that customers could easily access assistance, product information, and technical support. These initiatives aimed to demonstrate Samsung’s commitment to customer satisfaction and support.

  Launch of subsequent product lines and their impact on brand perception

Following the Note 7 crisis, Samsung launched subsequent product lines, including flagship smartphones like the Galaxy S8 and subsequent iterations. These launches played a crucial role in shaping brand perception and rebuilding trust. Key factors that influenced brand perception and the recovery process include:

• Emphasis on Safety and Quality: Samsung placed a strong emphasis on safety and quality in its subsequent product launches. The company implemented rigorous testing procedures and introduced new safety features to ensure the reliability and safety of its devices. By highlighting these improvements, Samsung aimed to regain customer trust and reassure them of its commitment to producing high-quality products.
• Positive User Experience: Samsung focused on delivering positive user experiences with its new product lines. This included improvements in design, performance, and functionality to enhance customer satisfaction. By providing users with exceptional products, Samsung aimed to rebuild its reputation and generate positive word-of-mouth, contributing to brand recovery.
• Brand Messaging and Marketing: Samsung’s marketing efforts during subsequent product launches were carefully crafted to reinforce positive brand associations and regain customer trust. The company emphasized innovation, customer-centricity, and the commitment to quality and safety. Marketing campaigns highlighted features, benefits, and technological advancements to create a positive brand image and overcome the negative perceptions associated with the Note 7 crisis.

Final Words 

Samsung’s handling of the Note 7 crisis serves as a case study in crisis management. Despite the significant financial and reputational setbacks, the company took proactive steps to address the crisis, regain customer trust, and prevent similar incidents in the future.

The Samsung crisis management case study highlights the importance of swift and transparent communication, customer-centric actions, and continuous improvement in product safety and quality. By effectively addressing the crisis, Samsung was able to navigate the challenging situation and rebuild its brand, reaffirming its position as a leading global technology company.

Overall, the Samsung crisis management case study provides valuable insights into how a company can recover from a major setback, restore customer trust, and strengthen its position in the market through strategic actions and a relentless commitment to customer satisfaction and product excellence.

About The Author

Tahir Abbas

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Leadership Scandals Call Samsung’s Corporate Governance into Question

• By Yasemin Zeisl
• Jul 8, 2019

South Korean business conglomerate Samsung has been struggling with a number of obstacles in the first half of 2019. The escalating trade war between the United States and China has caused a global economic slowdown which also affects Samsung’s business success. Market uncertainty has resulted in the tumbling of semiconductor prices. With a large portion of Samsung’s revenues coming from semiconductor sales, the price drop negatively impacts the company. Additionally, Samsung Electronics experienced a major setback when the Galaxy Fold smartphone release was delayed in April 2019 after the emergence of grave issues regarding the foldable phone’s display. Amid such turbulences, Samsung is facing another central challenge. A series of emerging fraud and bribery scandals have called Samsung’s family-based corporate governance into question.  

Since 2018, investigators have interrogated and arrested high-ranking employees of Samsung over an accounting fraud involving Samsung’s biopharmaceutical affiliate, Samsung BioLogics. The fraud revolved around the artificial inflation of BioLogics’ subunit, Samsung Bioepis, by a value of 3.9 billion USD in 2015. This also inflated the value of Bioepis’ parent company Cheil Industries. According to allegations, the plan of this fraud was to facilitate the merger of subsidiaries Samsung C&T and Cheil Industries. This reportedly consolidated the power of Samsung’s heir, Lee Jae-yong, over the business conglomerate. Lee possessed a 23% stake in Cheil Industries but a share of only 1% in Samsung C&T. The Samsung Group has been in the hands of the Lee family since its founding in 1938. Due to this family-based ‘chaebol’ system, it is in the interest of the Lee family to maintain control of the Samsung Group and particularly of market leader Samsung Electronics. In the course of investigations, it was uncovered that senior executives had ordered the concealment and destruction of incriminating records of the fraud. Among the interrogated personnel is Chung Hyun-ho, president of Samsung Electronics.

Investigators focus on whether the fraud served the purpose of strengthening Lee Jae-yong’s position as de facto head of the corporation. Lee Jae-yong assumed leadership of Samsung Electronics in 2014 after his father and former Samsung head Lee Kun-hee suffered a heart attack, becoming unable to continue as head of the business. Although it is still unclear whether Lee Jae-yong will be questioned by investigators, he already came into conflict with the law when charges were brought against him in 2017. Lee was sentenced to 5 years in prison in August 2017 after he bribed former South Korean President Park Geun-hye and her adviser Choi Soon-sil, who are both now imprisoned. After Lee appealed the court’s decision, his sentence was suspended, and he was released in February 2018. His removal as Samsung’s leader, however, would impair processes at the highest decision-making level. This situation would hamper new business investments and innovation.

The chaebol system, which fosters the ownership of a corporation by a family, heavily influences Samsung’s corporate governance dynamics. For years, Lee has been primed to be Samsung’s leader and finding a replacement would be difficult. Lee has two younger sisters, Lee Boo-jin and Lee Seo-hyun, who are preoccupied with heading the luxury hotel chain Shilla and the fashion division of Samsung C&T, respectively. Given that Samsung’s governance model is based on family succession, it appears highly unlikely that a non-family member would take the place of Lee Jae-yong. The business is streamlined in accordance with the objectives of the Lee family, thus decreasing the decision-making power of the board of directors. When Lee Jae-yong received his prison sentence in 2017, strategic implementation was adopted by the newly instated Business Support Task Force. The task force continued to back the Lee family, thereby sustaining the chaebol system.

Samsung should seize market opportunities after Chinese telecommunications competitor Huawei was banned in the United States. The company should also zoom in on issues arising out of declining exports in the wake of the US-China trade war and the flawed Samsung Galaxy Fold. The fraud scandal and ongoing investigations, however, divert Samsung’s attention and may complicate business improvement at present.

As a major corporation in South Korea, the success of Samsung’s governance and operational tasks reflect on the country’s economy. The Samsung Group forms South Korea’s largest business conglomerate and encompasses electronics, heavy industries, life insurance, entertainment, construction, and advertisement subsidiaries. Samsung’s financial situation therefore influences South Korea’s economic growth. Although fraud scandals exacerbate Samsung’s reputational risk, it is unlikely that the conglomerate will abandon its family-centered leadership and completely restructure its governance. Finally, it would be in the interest of Samsung as well as South Korea’s economic health to maintain the stability of Samsung’s business success and leadership.

About the Author

Yasemin Zeisl

Yasemin Zeisl earned her MSc in International Relations and Affairs from the London School of Economics and Political Science (LSE). Yasemin is fluent in German and English and possesses advanced Japanese language skills.

• Corpus ID: 169566459

Chaebols, the engine of the Korean economy: a case study of the Samsung Group

• Published 13 July 2018
• Business, Economics

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Christian Davies in Seoul

Roula Khalaf, Editor of the FT, selects her favourite stories in this weekly newsletter.

A group of investors has called on Samsung’s de facto holding company to increase dividends and institute share buybacks, as pressure mounts on South Korean companies to address their low valuations.

US hedge fund Whitebox Advisors, UK fund City of London Investment Management and Seoul-based fund Anda Asset Management submitted their proposals on Friday ahead of Samsung C&T’s annual meeting in March. The funds hold a stake of just over 1 per cent in the company.

The company, whose operations span construction and retail and through which the conglomerate’s ruling Lee family controls tech giant Samsung Electronics , trades at more than 65 per cent below its net asset value, making it a target for investors campaigning to narrow the long-standing “Korea discount”.

“Rather than address local and foreign shareholder concerns about this long-term underperformance, Samsung C&T’s board has repeatedly dismissed or ignored our suggestions for enhancing shareholder value,” the funds wrote to shareholders on Friday. “Our group has high conviction that this view is shared by a significant portion of the shareholder base.”

The attempt to shake up South Korea ’s most powerful and storied conglomerate comes as the country’s leaders seek to replicate Tokyo’s drive to raise valuations. Japan’s Nikkei touched 34-year highs in January, driven by outflows of capital from China and a concerted effort from Japanese authorities to improve corporate governance.

President Yoon Suk Yeol has said boosting local stock valuations is one of his administration’s top priorities. Yoon said last month that he supported the introduction of a legal fiduciary duty to shareholders, while South Korea’s top financial regulator has floated the possibility of replicating Tokyo’s “name and shame” regime for companies failing to present proposals to improve valuations.

The price-to-book ratio of companies listed on South Korea’s flagship Kospi index is 0.91, significantly lower than the Nikkei 225’s 2.01. Investors accuse the founding families of South Korea’s largest conglomerates of prioritising control of their sprawling business empires over paying dividends and boosting profitability.

“The Korean stock market is still really cheap because of bad corporate governance and ineffective capital allocation,” said Darren Kang, chief investment officer at Seoul-based fund Life Asset Management.

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But Changhwan Lee, an activist investor and founder of Seoul-based hedge fund Align Partners, said the “landscape has changed dramatically” since the number of South Korean retail investors more than tripled during the coronavirus pandemic.

That led to the introduction of reforms to protect the interests of minority shareholders, which in turn helped spur the growth of a new breed of local activist funds .

“Every time share prices rise in Japan while remaining flat in Korea, it strengthens the arguments of local advocates for reform,” said Lee.

South Korea had the third-highest number of activist campaigns in the world last year, behind only the US and Japan, according to Insightia. There were 60 activist campaigns in South Korea in the first half of 2023, compared with 18 in the first half of 2021.

Robin Baik, a Seoul-based partner at international litigation firm Kobre & Kim, noted that with parliamentary elections due in April, the authorities were under pressure to introduce new policies.

A senior investment banker in Seoul said larger foreign investors still needed to see more concrete signs of progress before redirecting capital away from larger markets such as Japan and India.

But James Smith, who oversaw a series of bruising campaigns at Samsung and Hyundai when he was head of Elliott Management’s Hong Kong office, said the case for investing in undervalued South Korean companies such as Samsung C&T remained “stunningly compelling”.

“We feel strongly that the Japanese precedent is driving incremental change in Korea,” said Smith, whose London-based fund Palliser Capital has called on Samsung C&T’s management to reform its capital allocation practices.

Kang said even modest progress by activists at Samsung C&T’s annual meeting would have a “cascading effect”.

“If they are successful, that will send a strong signal both to Korean companies and to foreign investors that it is possible for them to co-operate.”

Additional reporting by Andy Lin in Hong Kong

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We adhere to the Global Code of Conduct

Samsung Electronics aims to be a ‘world leading company’, devoting our human resources and technology to create superior products and services, thereby contributing to a better global society.

To achieve this goal, we share and pursue Samsung Values of 『People, Excellence, Change, Integrity, Co-prosperity』, and the 7 Factors of a World Leading Company of 『Dream, Vision & Goal, Creativity & Challenge, Insight & Good Sense, Technology & Information, Trust & Credibility, Speed & Velocity, Change & Innovation』 within the organization.

Furthermore, all Samsung Electronics employees should follow this「Global Code of Conduct」 as well as the Samsung Business Principles in order to comply with laws and ethical practices as well as to express our concrete commitment to social responsibility. This 「Global Code of Conduct」will be the guiding standard for everyone in Samsung Electronics, outlining standards of conduct in all business activities.

• We endeavor, with a sense of urgent awareness that we cannot survive without innovation, to achieve future competitiveness by responding Speedily to the changes in the business environment and customer demand, and to maintain a sustained commitment to Change & Innovation based on our Dream, Vision & Goal.
• We cultivate Creativity & Challenge, acknowledging that future competitiveness depends on the development of Technology & Information ahead of competitors.
• We aspire to become qualified experts in our field with Insight to foresee the future, and the Good Sense to identify and take advantage of opportunities.
• We create an open culture where employees are encouraged to make decisions and act proactively with a sense of ownership, based on the mutual respect of individuality and Trust & Credibility.
• We pursue co-prosperity by maintaining relationships of Trust with shareholders and business partners, and facilitating sound management through mutual cooperation.

※ Code of Conduct Coverage : The Code of Conduct applies to all Samsung Electronics' employees (domestic/overseas), suppliers, and all staff employed by the subsidiaries of Samsung Electronics.

Principle 1. We comply with laws and ethical standards

1-1. we respect dignity and diversity of individuals.

• 1 The Company will respect the basic human rights of all employees and will not discriminate against its officers, staff and other interested parties on the basis of race, nationality, gender, religion, regional background, physical disability, marital status, or any other characteristics protected by law.
• 2 The Company will not employ underage persons, as commonly defined by international standards and relevant national laws.
• 3 The company will respect the rights to freedom of association and collective bargaining in accordance with the local labor laws where our worksites operate in order to maintain and develop our cooperative labor-management relations based on mutual trust and integrity.
• 4 The Company will determine conditions of employment and compensation for personnel in a rational and just manner, taking into consideration relevant national, local or state laws, and international standards.
• 5 The Company will ensure that working hours of personnel will be in accordance with the specific nature of their duties and national laws and regulations, and no extended working hours will be enforced without mutual agreement.
• 6 The Company will endeavor to ensure that senior staff do not impose on junior staff any duties unrelated to Company affairs or duties that violate Company regulations and standard processes, or use any form of psychological or physical intimidation or coercion against employees in the performance of their regular duties.

1-2. We compete in accordance with laws and business ethics

• 1 The Company will compete freely and fairly at all its business sites around the world, abiding by national laws and regulations and relevant international standards governing the conduct of business.
• 2 The Company will not abuse a dominant market position nor use coercion to cause inclusion of unwanted items in any sales transactions (tying).
• 3 The Company will not enter with competitors into price fixing, bid collusion, market collusion or reduced production agreements, and will not discuss with competitors prices, bids, customers, sales territories and conditions including price confirmation.
• 4 The Company will not permit the giving or acceptance of money, goods, entertainment or any economic benefits to or from customers or external interested parties, nor allow any improper activities that violate laws and fair trade principles.
• 5 The Company shall refrain from illegally obtaining confidential information belonging to competitors.
• 6 The Company shall not demand, or use coercion to obtain any advantage detrimental to the interest of customer or partner companies.

1-3. We maintain transparency of accounts with accurate recording of transactions

• 1 The Company will accurately record and manage all transactions in compliance with international standards and national accounting regulations, and will be subject to accounting audits by outside parties at regular intervals.
• 2 The Company will make every effort to refrain from entering into a business relationship with customers of uncertain identity, and will not participate nor cooperate with illegal, false, or irregular transactions.

1-4. We do not get involved in politics and maintain neutrality

• 1 The Company will respect individual political rights and expression of opinion. However, it will not allow the conduct of political activities within the company that may be harmful to the organization.
• 2 The Company's resources, including financial resources, manpower, and facilities shall not be used for any political purpose.
• 3 The Company will refrain from illegal donations and improper dealings with governments, and will respect individual country's related laws and regulations.

1-5. We protect information on individuals and business partners

• 1 The Company will abide by the laws and regulations relating to protection of the privacy of its employees and confidential information, and each officer or employee of the Company shall acknowledge their primary responsibility for the protection of such information.
• 2 The Company will use information relating to individuals, corporate customers, or business partners obtained through normal business process, only for business purposes, and shall not disclose such information to third parties.

Principle 2. We maintain a clean organizational culture

2-1. we make a strict distinction between public and private affairs in our duties.

• 1 The Company will not permit any illicit activity for the pursuit of personal gain , such as irregular treatment of expenses, using one's position for private gain, or the embezzlement of corporate assets.
• 2 The Company will not permit any activity that utilizes proprietary information of the Company for private gain, for example insider trading, irrespective of whether or not this activity was conducted directly by an employee or via third parties.
• 3 In cases of conflicts of interest between the Company and an individual, the Company's legitimate interest will be considered preferentially.

2-2. We protect and respect intellectual properties of the Company and others

• 1 The Company will endeavor to ensure that internal intellectual property and confidential information will not be disclosed to external parties by its employees without its prior permission and consent.
• 2 The Company will ensure that any proprietary information acquired through its business activities shall be recorded and safely kept and managed as intellectual property.
• 3 The Company will respect the intellectual property rights of third parties, such as patents, copyrights and trademarks, and shall not intentionally infringe or improperly use such intellectual property.
• 4 The Company will ensure that due attention is paid to the security of its intellectual property during the course of telephone or other communication with external parties, and in the management of various data storage facilities.

2-3. We create a sound organizational atmosphere

• 1 The Company has zero tolerance for any type of behavior which may offend or cause unpleasantness to other employees, such as sexual harassment, physical assault or any personal request or action that would compromise or inconvenience another employee.
• 2 The Company recognizes its responsibility to provide a work place of equal opportunity to all employees, and will not permit the formation of any faction or private group within the Company that might endanger this commitment.
• 3 The Company will endeavor to maintain and develop a mutually cooperative relationship between management and employees, based on the principle of mutually beneficial existence and prosperity.

2-4. We maintain the dignity of Samsung Electronics in our external activities

• 1 During the term of employment at the Company, an employee is not permitted to simultaneously maintain employment with a third party or otherwise be engaged in outside business activities, unless otherwise agreed by prior consent.
• 2 The Company requires that all disclosures of company information at external lectures or interviews are subject to prior scrutiny and approval.
• 3 The Company will not allow its officers and employees, while in office, to act as members of boards of companies with conflicts of interest or participate in competitive business activities.

Principle 3. We respect customers, shareholders, and employees

3-1. we put priority on customer satisfaction in management activities.

• 1 The Company will endeavor to reflect and give priority to the requirements and recommendations of customers for the improvement of product design, distribution, and service.
• 2 The Company will make every effort to engage with its customers in a polite and equitable manner based on its belief that "Samsung Electronics exists because of its customers".
• 3 The Company will respect the customer's right to choose by refraining from exaggerated advertisements or coercive sales techniques, which could mislead customers with regard to the quality, function and specifications of product or service.
• 4 The Company will endeavor to reach just resolutions of customer-related disputes and will respond to the complaints of customers in a transparent, timely and effective manner.

3-2. We pursue management focused on shareholder value

• 1 The Company will actively pursue increases in investment return for shareholders by maximizing profits through transparent and sound management.
• 2 The Company will honor its responsibility to shareholders and interested parties by announcing major financial and corporate information in good faith and in a timely fashion.
• 3 The Company will accept and sincerely consider legitimate petitions from external shareholders.

3-3. We endeavor to improve our employees' quality of life

• 1 The Company will offer equal opportunities to all employees and treat them justly based on their ability and achievement.
• 2 The Company will encourage continuous self-development of employees and actively support opportunities to improve their capabilities to execute their duties.
• 3 The Company will provide a working environment in which personal initiative and creativity are encouraged.

Principle 4. We care for the environment, health, and safety

4-1. we pursue environment friendly management.

• 1 The Company will make every effort to comply with international environmental standards, national laws and regulations relating to the environment and internal environmental regulations within all of its global business operations.
• 2 The Company will actively attempt to minimize the generation of harmful materials, utilize resources efficiently and recycle waste products for the benefit of the environment.
• 3 The Company will do its best to conduct environmental improvement activities throughout the whole process of product development, production, distribution, sales and disposal.

4-2. We value the health and safety of human beings

• 1 The Company will comply with international standards, related laws and regulations, and internal regulations governing the safety and health of its employees by providing safety education and training at regular intervals.
• 2 The Company will give priority consideration to the health and safety of customers in all business activities including product development, production, distribution, and sales.
• 3 The Company will clearly inform customers regarding the safe usage and operation of its products or services.
• 4 The Company will endeavor to deal promptly with the discovery of any fault in a product, which could pose a threat to the safety of customers.
• 5 The Company will make every effort to identify and eliminate any safety hazard found at any of its business sites, and will maintain a clear and safe environment.

Principle 5. We are a socially responsible corporate citizen

5-1. we sincerely execute our basic responsibilities as a corporate citizen.

• 1 The Company will endeavor to create stable employment and to faithfully fulfill its tax obligations.
• 2 The Company shall instill in its employees its belief that their behavior directly affects the overall image of the Company, and shall endeavor to maintain the good name of the Company by ensuring proper dress, courteous behavior and dignified use of language.
• 3 Employees are encouraged to endeavor to build trust within the local community by fulfilling their duties and responsibilities.

5-2. We respect the social and cultural values of local communities and practice co-existence

• 1 The Company will respect the laws, culture and values of the local communities in which it operates, and shall contribute to the improvement of the quality of life, of local residents.
• 2 The Company, as a global corporate citizen, will contribute to the spiritual enrichment of society by promoting and supporting public-interest activities such as academic advancement, art, culture and sports.
• 3 The Company will actively participate in social services such as voluteering activities and disaster relief.

5-3. We build up relationships of co-existence and co-prosperity with business partners

• 1 The Company will acknowledge its business partners as strategic partners based on mutual trust, and will pursue the shared value of customer satisfaction.
• 2 The Company will select business partners in accordance with business objectives by applying fair standards without discrimination.
• 3 The Company will make efforts to support the growth of business partners' competitiveness and development.
• 4 The Company will actively encourage business partners to fulfill their own social responsibilities with respect to safety within the workplace and the individual rights of their employees.

Over the years, expectations from various entities - including NGOs, governments, customers, shareholders, suppliers and employees - have grown along with our responsibilities as a global corporate citizen. In this spirit, Samsung Electronics has updated and revised the 'Business Conduct Guidelines' (published for the first time in 2015) that provide a specific direction for sustainable management, as part of our ongoing effort to ensure responsible management, by creating a list of commitments from all executives and employees.

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Samsung’s Organizational Structure & Its Characteristics (An Analysis)

Samsung’s organizational structure (corporate structure) is designed to promote technological innovation throughout the multinational enterprise. Technological innovation is at the heart of the company’s strategies, as seen through rapid innovation involving smartphones and other consumer electronics. Structural facilitation contributes to the effectiveness of implementing Samsung’s generic competitive strategy and intensive growth strategies . The company structure is also a manifestation of the evolution of the business from a small trading firm into a diversified multinational enterprise that offers advanced technologies. Considering its organizational structure’s involvement in diverse operations, Samsung employs various operations management strategies for different markets and industries. The conglomerate’s organizational design and structural system covers various markets and industries related to the development and utilization of technologies, such as computing technologies. Effective market penetration and market development strategies are enabled through Samsung’s corporate structure, which also empowers competitive advantages to support business continuity and success in an increasingly saturated and aggressive competitive landscape.

Samsung Electronics and sister companies and subsidiaries form the organizational structure of the Samsung Group. In this internal analysis, it is illustrated that the business structure of the technology conglomerate is applied throughout its operations. For example, the organizational structural characteristics of Samsung Electronics are the same as the structural characteristics of the conglomerate. This consistency in the corporate structure helps streamline the company’s operations, especially in keeping its competitive advantages against many aggressive firms, including Apple , Google (Alphabet) , Microsoft , Sony , Intel , Dell, Acer, and Lenovo.

Samsung’s Organizational Structure Type & Characteristics

Samsung has a product-type divisional organizational structure . This structure type uses product categorization as the basis for determining which resources and business operations belong to certain divisions, such as the company’s Device Solutions division. The entire company structure is unified via Samsung’s headquarters in Seoul. Strategic management directions from the corporation’s headquarters are implemented through strategic objectives specific to the structural divisions’ contexts, such as the context of the U.S. market for consumer electronics. Samsung’s corporate structure has the following main characteristics:

• Product-type divisions
• Centralized corporate hierarchy
• Geographical groupings

Product-Type Divisions . Samsung’s organizational structure’s main characteristic is its product-type divisions. Each division is a group of resources and operations that represent a product category, such as resources and operations for the production, distribution, and sale of consumer electronics. The corporate structure’s emphasis on technological innovation and product development in these divisions helps in achieving Samsung’s mission statement and vision statement . The technology conglomerate may add, merge, or disband divisions, depending on current business needs and the development of the organization, considering that further business diversification is possible. The following are the product-type divisions in Samsung organizational structure:

• Consumer Electronics
• Device Solutions
• IT & Mobile Communications

Centralized Corporate Hierarchy . Samsung’s corporate structure involves a hierarchical model, despite its product-type divisions. The corporate headquarters are the most notable manifestation of this hierarchy, which is part of an organizational design for ensuring that the conglomerate’s operations are unified and effectively directed towards growth and operational effectiveness. This characteristic of the organizational structure involves centralization of overall strategic planning through decision-making teams, groups, and departments, as well as vertical lines of command and authority that relay strategic directions from the headquarters to the daily operations in the Consumer Electronics, Device Solutions, and IT & Mobile Communications divisions.

Geographical Groupings . Samsung uses geographical groupings or divisions as a minor characteristic of its corporate structure. In the company’s organizational chart, these geographical divisions are generally under the product-type divisions. For example, Samsung Electronics North America is a geographical division within Samsung Electronics, which is a product-type division. Through this characteristic of the organizational structure, the company implements region-specific strategies, such as strategies intended for the North American market for Device Solutions.

Samsung’s Corporate Structure’s Advantages & Disadvantages

Advantages . Samsung’s corporate structure has the advantage of extensive support for product development, especially in terms of technology and innovation. This support comes through the structural framework of the conglomerate’s product-type divisions. Another advantage of this organizational structure is the company’s ability to fine-tune its strategies and operations based on market characteristics. This is possible through the geographical groupings or divisions within the product-type divisions, such as IT & Mobile Communications. These structural advantages and the strengths shown in the SWOT analysis of Samsung buttress the business against fierce competition. In this way, the organizational structure supports the company’s competitive advantage, especially against major competitors, like Apple .

Disadvantages . Samsung’s organizational structure has the disadvantage of the limited autonomy of the product-based divisions. For example, because of the centralized hierarchy, the product-based divisions need to follow strategic directives from the company’s headquarters in Seoul. Nonetheless, this structural hierarchy is necessary to keep Samsung’s entire organization unified toward its mission and vision involving superior technology and technological products. Also, the company structure presents challenges in expanding the business in regional markets, considering the low priority given to the geographical groupings. Nonetheless, Samsung’s organizational culture (corporate culture) helps in minimizing the negative effects of these structural disadvantages. Its current global success means that the technology company effectively uses the advantages of its corporate structure in spite of the disadvantages.

• Deng, S., Xu, J., & Han, Y. (2023). A proprietary component manufacturer’s global supply chain design: The impacts of tax and organizational structure. Omega, 115 , 102777.
• Samsung Electronics US Executive Bios .
• Samsung – Our Business .
• Samsung Semiconductor Global Executive Leadership .
• Sayyadi, M. (2022). Cut the confusion out of your corporate structure. HR Future, 2022 (6), 52-54.
• Copyright by Panmore Institute - All rights reserved.
• This article may not be reproduced, distributed, or mirrored without written permission from Panmore Institute and its author/s.
• Educators, Researchers, and Students: You are permitted to quote or paraphrase parts of this article (not the entire article) for educational or research purposes, as long as the article is properly cited and referenced together with its URL/link.

Product details

Family leadership challenges: Disrupting the momentum at Samsung

Samsung is a Korean conglomerate (or chaebol) founded in 1938. Once a sole trading company, it has grown into a myriad of companies generating over $380bn globally in industries as varied as construction, semiconductors, shipbuilding, banking, and entertainment. Like most Korean conglomerates, an unusual feature of Samsung is that it has no overarching holding company; it is a constellation of companies sharing a common name and tightly interwoven cross-ownership ties. This ownership structure allows the third-generation descendant of the family business, Jae-Yong Lee, to control the conglomerate with shares in only a few affiliates. The case focuses on three pivotal moments of the Lee family’s leadership of the Samsung Group: the leadership transmission from the founder Byung-Chul to the second generation; the hospitalization of the visionary leader Kun-Hee and the succession to the third generation; and Jae-Yong’s arrest and later conviction, causing a leadership vacuum within the group.

• The case describes multiple events throughout the company’s 80-year history and illustrates diverse aspects of a family business.
• It also presents an interesting account of the business, economic, political and social development of South Korea since 1930s.
• The instructor can use the case to provide real examples of some or all of the following topics: the role of vision in business, family business succession, and ethical leadership.

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Evaluating Risks and Decisions: A Samsung Case Study Essay

• To find inspiration for your paper and overcome writer’s block
• As a source of information (ensure proper referencing)
• As a template for you assignment

Introduction

Samsung is a consumer electronics firm based in South Korea with a wide product range that includes computers and smartphones. Founded in 1938, as a grocery store, the company has since grown from a small family-owned enterprise to one of the largest in the world (Regan, 2018). This paper evaluates how the firm applies Enterprise Risk Management (ERM) in its corporate practices to manage risks and business decisions when operating internationally.

A Critical Reflection Based On ERM

The application of ERM policies depends on a myriad of factors. Three main frameworks for conducting reviews include Integrated Risk Management (IRM), IS031000, and COSO-ERM standards (Hessami, 2019). IRM standards seek to evaluate risk management processes based on four main criteria that evaluate financial, strategic, operational, and hazard risks affecting an organization (Coleman, 2018). Comparatively, IS031000 focuses on three main areas of evaluation – principles, frameworks, and processes (Rael, 2017). Comparatively, the COSO-ERM cube focuses on strategic, operational, reporting, and compliance risks as highlighted in figure 1 below.

As highlighted in figure 1 above, the COSO-ERM model highlighted above evaluates a company’s internal environment through objective setting, event identification, risk assessment, risk response, control activities, information assessment, and monitoring. In the context of Samsung’s risk management plan, the COSO-ERM framework will be used to analyze the firm’s risks and decisions.

Internal Environment

For purposes of this review, Samsung’s internal environment is evaluated based on the efficacy of its management and leadership styles. Relative to its competitiveness in the global market, the South Korean firm has adopted a combination of western and Asian leadership styles to be successful (Samsung Inc., 2021). For example, its bold risk-taking appetite stems from the assimilation of western ideals in the company’s management framework. Alternatively, its treatment of workers is based on the Asian philosophy of fairness, equity, and hard work (Regan, 2018; Biberhofer et al., 2019). Broadly, the hybrid management and leadership philosophy adopted by Samsung is responsive to its risk management objectives.

Objective Setting

A company’s objectives influence the design of its key processes and activities. Samsung’s objective is to develop superior products and services that enhance societal value (Samsung Inc., 2021). Using the COSO-ERM framework to analyze this objective, quality emerges as a core consideration for the firm’s success in achieving this goal (Ensign, Fast and Hentsch, 2016; Grunert, 2017). The company also complies with existing laws and guidelines to make sure that its business processes are consistent with the global code of conduct for conducting multinational operations.

Event Identification

There are various sources of risk in the consumer electronics industry. Top of the list is the COVID-19 pandemic, which has disrupted supply chain patterns and created shortfalls in demand for goods that were hitherto non-essential. Trade wars pitting western and Asian companies are also significant sources of risk for Samsung (Baack, Czarnecka and Baack, 2018). Therefore, the COVID-19 pandemic and ongoing trade wars between western and Asian nations emerge as significant sources of risk for Samsung Electronics.

Risk Assessment

A comprehensive assessment of Samsung’s risk profile is provided in Table 1 below.

Table 1. Samsung’s risk assessment

According to the risk events highlighted in Table 1 above, two risk categories affect Samsung’s operations – COVID-19 and trade wars. The above risks have been ranked according to the risk profile matrix highlighted in figure 2 below and trade wars is the most impactful

A company’s risk management attitude defines the kind of strategies it is likely to adopt in a risk management scenario. Relative to this statement, Samsung can initiate four major types of responses: tolerate, treat, transfer, or terminate a risk (Kumar, Rahman and Kazmi, 2016). Appropriate risk responses will be to treat and transfer the risks, respectively. Trade wars are transferable because they are initiated at an intergovernmental level and Samsung has little control over associated processes. Comparatively, risks associated with the COVID-19 pandemic should be “treated” because they can be mitigated through the deployment of robust health-based and prevention-oriented strategies (Archetti, 2021; Hutchins, 2018). Modalities for implementing these strategies are highlighted below.

Control Activities

According to the proposed strategies highlighted above, the appropriate risk response for managing risks caused by the COVID-19 pandemic is “treatment.” This is because the firm can develop health safeguards to protect its customers and employees from infections (Adhikari, 2018). Comparatively, risks associated with trade wars can be “transferred” because third-party actors, such as insurance companies, can develop products that protect the firm against this type of risk.

Information and Communication

Most companies use Information and Communication Technology (ICT) tools to carry out various functions, including risk management. Such is the case of Samsung because it uses ICT to carry out sustainable business operations by diversifying its risks across different portfolios (Samsung Securities, 2020; Makrides, Vrontis and Christofi, 2020). At the same time, the company uses ICT in risk identification and assessment because it provides a relatively accurate assessment of the same, relative to other evaluative models (Chopra, Avhad and Jaju, 2021). The risk posed by the adoption of this technology includes system breakdowns and the failure of some employees to understand how to use the company’s risk management software (Pesch et al., 2017). Nonetheless, this risk profile is low and the company has successfully used its ICT infrastructure to manage its risk management activities.

Risk Monitoring

In this paper, the main sources of risk for Samsung have been identified to be trade wars and the COVID-19 pandemic. These risks have implications on the organization if not effectively monitored (Regan, 2018). The two levels of risks should be evaluated weekly to understand their implications on the organization (Rael, 2017). The chief risk manager should collaborate with the Chief Executive Officer (CEO) to understand the implications of these risks on various aspects of the firm’s corporate and industry performance.

Role and Impact of Governance, Technology, and Resilience

Role of governance.

Companies have varied ways of managing their risk categories. Two major strategies are adopted by firms when managing risks is to (i) explain why they have not been addressed as stipulated in corporate governance reports or (ii) to comply with rules and guidelines stipulated in the corporate governance report (Rael, 2017). Samsung’s risk management approach should follow the second approach of explaining situations where corporate governance rules and policies have been followed, or not. This is because the two risk events identified in this document – COVID-19 and trade wars – change periodically, while the company’s corporate management rules are rigid (Grunert, 2017). Explaining the responses may be a useful way of navigating these changes.

Samsung’s CEO should take responsibility for the above actions by making sure that the company’s corporate management guidelines are followed. Alternatively, the firm’s Board of Directors should review the performance of the CEO by reviewing how the company’s overall risk management plan helps in the realization of its goals (Köbis, Soraperra and Shalvi, 2021). The process should be open and transparent to ensure there is sustainability of business process outcomes (Adhikari, 2018). By doing so, the process will be fair and receptive to all parties involved.

Impact of Governance

The impact of Samsung’s corporate governance policies on its risk management processes is vast because of their outreach and influence on various aspects of business performance. In the context of Samsung’s operations, corporate governance plays a critical role in moderating the relationship between managers and employees by defining the expectations and roles of each party (Haenlein et al., 2020; Köbis, Soraperra and Shalvi, 2021). From an organizational standpoint, the company’s corporate governance policies will play a critical role in standardizing operational procedures across various product divisions – especially in the way it manages risk (Rael, 2017). Apple Inc. and Huawei are Samsung’s competitors in the consumer electronics industry, which have developed and implemented similar corporate management policies with varied levels of success (Apple Inc. 2021; Adoko, 2017). From their experience, the failure to implement good corporate governance policies in managing a company’s risk events may result in increased inefficiency and unresponsiveness to the changing nature of a firm’s risk events (Adoko, 2017). Therefore, it is important to make sure that such policies are developed by consulting relevant parties.

Role of Technology

As highlighted in this document, ICT plays a critical role in determining how Samsung makes decisions regarding its risk management processes. Relative to this statement, some researchers suggest that ICT is the foundation for the development of innovation policies for use in the corporate setting (Dimic, Orlov and Äijö, 2019; Köbis, Soraperra and Shalvi, 2021). Nonetheless, given the sporadic nature of Samsung’s risk events – COVID-19 and trade wars – technology will play a critical role in formulating, implementing, and monitoring its risks (Adoko, 2017). Particularly, it will help to track risk events in real time, thereby allowing managers to be informed of their impact on organizations. Some technology tools, such as Skype and Zoom, will also be used to communicate appropriate risk management strategies to respective teams based on data collected from the above-mentioned risk tracking processes.

Impact of Technology

The use of ICT tools to undertake Samsung’s risk management processes will have financial and operational implications on the multinational. From a financial perspective, technology may lead to reductions in operational costs because of its inexpensive nature (Kumar, Rahman and Kazmi, 2016; Archetti, 2021; Hutchins, 2018). The firm may also need to automate some of its risk management processes, such as risk monitoring, to accommodate these changes (Kumar, Rahman and Kazmi, 2016; Archetti, 2021; Hutchins, 2018). Some companies have successfully adopted this strategy to manage their risks (Kemp, 2018; Palmatier and Sridhar, 2017). For example, Google and Apple have used machine-learning techniques to minimize their risk exposures because they provide an effective way of improving their overall risk management plans (Apple Inc., 2021; Kelleher, 2019). Overall, technology will have a positive impact on Samsung’s performance by improving its risk tracking and monitoring processes.

Role of Resilience

As highlighted in this document, risk events may have far-reaching implications on a company’s overall performance. Its resilience determines the effects that these events will have on its overall performance (Lewis, Ricard and Klijn, 2018). In this regard, resilience determines the ability of a company to adapt to the changing dynamics affecting its internal and external operations (Hernaus, Juras and Matic, 2021; Management Association, Information Resources, 2018). Samsung has demonstrated market resilience in the manner it manages its risk exposures (Regan, 2018). For example, by being resilient, the company has addressed its market and product challenges by recalibrating its business processes to mitigate known risks (Regan, 2018). In this regard, its resilience has played a critical role in affirming its position as a dominant company in the consumer electronics business.

Impact of Resilience

As highlighted above, Samsung’s resilience has had a positive effect on its overall business performance. For example, it has been able to address customer concerns in problematic product segments, such as the Samsung Galaxy Note, which caught fire when charging (Regan, 2018). Its resilience in the wake of such missteps has given competitors little room to exaggerate the company’s weaknesses (Bérard and Teyssier, 2018). Therefore, its resilience has helped it to maintain market dominance by countering negative information and experiences from customers and competitors. Based on the above examples, Samsung’s resilience is unmatched in the technology industry.

The insights highlighted in this paper have highlighted the role that ERM and corporate governance play in supporting Samsung’s risk management plan. Two strategies have been proposed for each risk category with the “treatment” option being associated with COVID-19 risks, while the “transfer” option is linked with risks associated with trade wars. It is proposed that the adoption of sound corporate governance policies and the implementation of a robust risk identification criterion will play a critical role in maintaining Samsung’s resilience in the competitive consumer electronics market.

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1. IvyPanda . "Evaluating Risks and Decisions: A Samsung Case Study." February 28, 2023. https://ivypanda.com/essays/evaluating-risks-and-decisions-a-samsung-case-study/.

Bibliography

IvyPanda . "Evaluating Risks and Decisions: A Samsung Case Study." February 28, 2023. https://ivypanda.com/essays/evaluating-risks-and-decisions-a-samsung-case-study/.

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How galaxy ai secures privacy and data: a guide for it leaders.

It used to be up to IT leaders to set the technology agenda. CIOs had to make a compelling case for moving data from on-premises systems to the cloud, for example, or help senior leaders understand the value of 5G internet services. The latest artificial intelligence (AI) wave has changed that process entirely.

In many large enterprises, everyone from frontline employees to the CEO is asking for generative AI to be deployed as quickly and widely as possible. They want to take advantage of use cases that could give them an edge over competitors, meet customer expectations and accelerate everyday tasks.

There’s just one problem: CIOs need to balance the enterprise demand for AI with an approach that can keep critical data protected and align with long-established governance standards. Samsung’s  Galaxy Z Fold6  and  Galaxy Z Flip6 , which combine  Galaxy AI 1  with its enterprise-grade  Samsung Knox security  technology, give them that balance, and much more.

The AI security questions that IT needs to answer

It’s never been easy to keep up with the security risks of an ever-evolving area like AI.

For instance, IT leaders may be worried about what AI adoption means for the way enterprise data is collected, managed and shared. Connecting business systems to public large language models (LLMs) may not be appropriate. Some generative AI tools produce “hallucinations” that lead to costly mistakes.

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While many of those issues can be addressed as the technology matures and proper policies are established, the bigger worry might be how AI is exploited by rogue actors.

Cybercriminals, for instance, have been quick to experiment with machine learning, deep learning and now, generative AI. They could use these technologies to create even more sophisticated malware, ransomware and social engineering attacks.

The potential for data leakage, access control challenges, and privacy concerns further complicate AI adoption in the enterprise.

AI should not create more work for already-overstretched enterprise IT departments and security teams. And it shouldn’t always require integrating AI platforms with legacy systems.

How Samsung Knox paves the way for AI enterprises can trust

Samsung recognized the challenge of adopting new innovations years ago and responded with  Samsung Knox , a security platform based on hardware-level protections. This includes a security co-processor protecting employee credentials, biometric data, digital certificates and even blockchain private keys.

When Samsung devices with built-in Galaxy AI boot up, Knox checks the operating system’s integrity, monitoring for potential threats. IT departments can build upon this layer of protection via  Knox Platform for Enterprise (KPE) . By integrating with enterprise mobility management (EMM) solutions, for example, KPE allows IT to set granular controls that go beyond core Android enterprise capabilities.

This means that as AI-based devices become more widely provisioned, IT can run remote device health checks to determine whether they were ever compromised, set advanced enterprise network options, or even remap device keys to launch specific tasks.

With Knox as a foundation, enterprise IT teams can approach AI with greater peace of mind — especially because Samsung’s latest devices already include Galaxy AI.

What a security-first approach to AI looks like across the Galaxy ecosystem

Even with strong security in place, large organizations can struggle to assess all the myriad AI platforms available and how best to integrate them into their business. Galaxy Z Fold6 and Galaxy Z Flip6 ease that process with Galaxy AI-driven features that support:

1. Improved cross-functional collaboration

Enterprises are often filled with departments that don’t work together as well as they should. When sales and marketing teams don’t communicate effectively, for example, it can lead to duplication of effort, wasted leads and missed targets.

Galaxy Z Fold6 fosters greater alignment using features like Chat Assist with Galaxy AI. When it’s time to send or respond to chat messages, for instance, Chat Assist can tailor what team members say to each other based on the context. They could adopt a more casual tone to show empathy, for instance, or a professional tone to address a more serious issue.

Cross-functional teams can also better track what’s discussed during messages using  Note Assist  with Galaxy AI. It can quickly summarize, organize, and highlight all the key takeaways and action items to keep everyone on the same page.

2. Greater customer-centricity

A consumer-oriented enterprise might be focused on boosting customer satisfaction (CSAT) scores. For a business-to-business (B2B) enterprise, net promoter score (NPS) might be more important.

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Regardless of the metric you use, the only way to improve is by enhancing experiences on a customer-by-customer basis. When an enterprise account manager needs to engage with a client who speaks another language, for instance, combining Galaxy Z Flip6’s Live Translate with  Galaxy Buds3 Pro  and FlexWindow allows for seamless communication.

In a financial services firm, a wealth manager can unfold Galaxy Z Fold6’s screen to show all the details about the latest investment opportunities thanks to its multi-window view. When questions come up, they can just use their finger to draw around words or objects on the screen, and Circle to Search with Google can do the rest.

Of course, sometimes it’s necessary to connect with clients or coworkers remotely, which Galaxy Z Flip6 makes possible using Google Meet Live Sharing.

3. Greater productivity on higher-value tasks

Enterprise employees have sometimes been called knowledge workers, but too often, they’re forced to pore over granular details. Those working in functions like HR, finance, and legal need to ensure they capture every nuance of conversations about employee policies, audits, and regulatory filings.

Thanks to Transcript Assist with Galaxy AI, Galaxy Z Fold6 greatly reduces this kind of administrative overhead. It instantly produces precise and succinct recaps of a meeting without employees having to write a single thing.

When those in marketing or HR are focused on creating imagery to promote products or corporate culture, they can lean on Galaxy Z Flip6’s FlexCam with Galaxy AI and Photo Assist with Galaxy AI. These tools make sure every person or object is arranged perfectly in the shot and streamline the process of editing and enhancing pictures.

Beyond AI features, Galaxy Z Fold6 and Z Flip6 build upon the employee experience most enterprises try to provide by offering Microsoft integrations with popular software tools like Office 365.

On a more personal level, employees can benefit from using these devices with Samsung Wallet, which allows the team to store payment cards, IDs and more.

Best of all, Galaxy Z Fold6 and Z Flip6 offer a connected experience with other Samsung Galaxy devices, whether employees need to take calls on their  Galaxy Book4 Series  or want to keep listening on their Galaxy Buds while switching back to their phone.

AI and mobile devices that deliver what the business wants  and  what IT needs

AI is only valuable as long as the devices running it keep working. IT departments shouldn’t constantly deal with troubleshooting and repairs.

Galaxy Z Assurance and  Samsung Care+ for Business  offer all the coverage an enterprise needs to manage accidental damage with  speed and convenience .

The tech industry may have more work to do before IT leaders can easily adopt AI across the enterprise. If you want to get started today, though, Galaxy Z Fold6 and Galaxy Z Flip6 represent secure, business-friendly solutions.

Unleash new ways to stay productive, collaborate and more with  Samsung for business . Sign up for a Samsung Business Account for exclusive offers on  Galaxy Z Fold6 and Galaxy Z Flip6  today, including volume pricing discounts .

1 Galaxy AI features by Samsung will be provided for free until the end of 2025 on supported Samsung Galaxy devices.

Shane Schick

Shane Schick tells stories that help people innovate, and to manage the change that innovation brings. He has written extensively for CIOs, CMOs and other senior enterprise decision makers as a journalist. As a content marketer, he has worked with some of the largest brands to the most disruptive startups.

• Galaxy Book4 Series
• Galaxy Buds3 Pro
• Galaxy Z Flip6
• Galaxy Z Fold6
• Samsung Knox

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