Discuss about the Negotiating Meaning and Power Resistance Relations.
Samsung is the South Korean business conglomerate headquartered in Samsung Town, Seoul. Lee Byung-chul founded the organization in the year 1938. Samsung group has diversified business units and have ventured in sectors like food processing, insurance, retail and securities and textiles. Samsung ventured into electronic industry in the late 1960s and has globalized its operations since then in various countries across the globe (samsung.com/in/ 2017). The main source of income for Samsung has been from mobile phone and semi-conductors. Any business organization should abide by certain business ethics like following strict policies and practices to avoid potentially controversial issues which can adversely affect the interests of the stakeholders of business organization and can tarnish the reputation of the business in the long run. Some examples of such controversial issues are related to corporate governance, labor exploitation, insider trading, bribery, discrimination, and issues related to Corporate Social Responsibilities of the business organization. In this era of globalization, the business environment has become highly competitive and volatile (Robbins and Judge 2013). A business organization focuses on continuous growth and innovation to achieve high performance and to sustain high competition of the marketplace. However, the sole purpose of business organization should not only focus on creating value for shareholders and concentrate on profitability, but to also focus on creating long term value for its stakeholders. The stakeholders of a business include the government, suppliers, shareholders and investors, society, employees and customers. Samsung Electronics got involved in controversies related to exploitation of young workers in China.
One of the largest smart-phone maker and mobile phone manufacturers of the world, Samsung Electronics got involved in ethical issues recently. Organizations like Samsung outsource their manufacturing facilities in developing countries like China to cut labor- cost. Globalization has provided with the necessary law and infrastructure for this type of outsourcing activities which are conducted by many global organizations across the world. Thus, the employees working in developing nations play a crucial role in ensuring that the global organizations like Samsung can maintain a strong, robust and continuous flow of the supply chain activities. The workforce in the manufacturing division of global organizations like Samsung is an important stakeholder of business. The workforce in developing nations like China often comprises of young workers who are forced to work overtime for a meager amount of money which enables organizations like Samsung to achieve cost advantage. Incorporating ethical practices are of paramount importance for an organization (Ford and Richardson 2013). Chinese activist Li Quang established a New York based organization called the China Labor Watchdog in 2000. This organization investigated six Samsung-owned manufacturing plants and two manufacturing facilities owned by suppliers of Samsung. Eight plants in China were investigated which produced mobile phones, printers, home appliances, mobile displays, DVD players, TV components and media players. The staffs of the manufacturing plants in China included more than 24,000 workers. During the investigation it was found that the young workers were not allowed to sit during shift timings and were subjected to poor work conditions. Samsung Electronics was accused of exploiting young workers in China. These employees of Samsung were physically and verbally abused and they were forced to work for more than 100 hours of overtime every month. Samsung did not follow safety measures in manufacturing plants and workers were not provided with protective clothing to handle risky activities in the manufacturing plants. HEG electronics which was a supplier of Samsung was allegedly using child labor. In China it is illegal to hire employees under the age of 16 but it is legal to hire employees in the age bracket of 16 to 18 years. It has been revealed by China Labor Watch that Samsung leveraged this legal advantage and hired workers under the age of 18 in majority of its factories. It was alleged that the management of The SEHZ (Huizhou Samsung Electronics Co) changed the name on the ID card of the young person and workers could enter factories with fake identity cards. Similar allegations were made against SSKMT (Shenzhen Samsung Kejian Mobile Telecommunication Technology). SEHZ had 10, 000 workers and Samsung had 90 % stake in it. Samsung owned 60 % stake of SSKMT. Tianjin Intops and Tianjin Chaarmtech Electronics were suppliers of Samsung who were alleged to pay workers so less that they were forces to work overtime. Workers were paid meager amount of $206 or 1310 renminbi monthly. It has been claimed that Samsung was well aware of the fact that underage workers of China made use of fake identity cards to find employment opportunities. The workers in manufacturing facilities of China had no medium or channel to express their grievances related to poor work condition or to lodge any complain to the legal system(theguardian.com 2017).This highlights major flaws in the entire hiring and supervision process in the manufacturing units of Samsung in China.
Strength
Weakness
Opportunities
Threats
The role of Organizational Analysis is of paramount importance to identify the shortfall of business and to develop strategies to resolve the shortfalls. The environment of workplace, the personnel and operations of an organization and workplace development can be reviewed by Organizational Analysis. Some of the models that can be adopted by a Company for organizational analysis are SWOT Analysis, Organizational Network Analysis(ONA), Strategic Triangle Model, McKinsey 7s Model, Cognitive and Meta Model(Foss, Husted and Michailova 2010). In the case of Samsung the management of the organization failed to adequately analysis the demand and supply balance in its supply chain and value chain model. The increasing demand of electronic products during product launch will require an increase supply of manpower in manufacturing facilities of Samsung; this was clearly ignored by the management of Samsung which led to poor working conditions and over-time work. Chiaburu et al. (2011), states that organizational behaviour is the study of behaviour and personality traits of individuals and groups within an organization like attitude, communications, understanding and pattern of thoughts. The ethical crisis in Samsung occurred because the needs of the employees of Samsung in manufacturing facilities of China were not in alignment with the human resource strategies of the organization (Miner 2015). Samsung did not pay any heed to the pay structure and working conditions of employees. Akta?, Çiçek and K?yak (2011), state that areas that affect organizational effectiveness are organizational structure and design, talent management, implementation and transformation of change, development of leadership and application of smart technology to manage the human resources of an organization. In the Case of Samsung, the ethical issue in Samsung clearly reflects that the organization did not make use of modern technology to manage human resources and this led to inadequate organizational effectiveness. The performance of an organization depends on the roles of managers and leaders of the organization. Tsai (2011), illustrated that organizational culture, job satisfaction and leadership behavior are related to each other. The organizational culture and leadership play a pivotal role in directing the workplace attitude, behavior, interpersonal relationships and performance of an organization. The presence of great leaders in an organization can affect the ethical practices of an organization, the motivational level of the employees and their productivity. In the case of Samsung, the failure related to violation of labor laws can be attributed to poor management of Samsung. The strategies which the human resource management of Samsung adopted in the hiring and supervision process in China were not in alignment with the broader vision and mission statements of the organization. Thomas, Sargent and Hardy (2011), have suggested ways to manage change and dynamic processes in an organization. The operations of an organization are influenced by power, politics, conflicts and decision-making of the leaders. In the case of Samsung, the managers failed to analyze a suitable human resource recruitment strategy for employees of China in manufacturing plants to suffice the need of the increasing demand of electronics products during product launches.
Samsung is a global organization with a talented pool of leaders and the organization already adopts a robust and ethical human resource policy for its workforce in developed countries and corporate offices. These policies should not be restricted to educated employees and should extend to the laborers who work in manufacturing facilities of Samsung in China. The ethical issues in the case have evolved only because Samsung failed to implement a robust human resource policy for the workers in China (Hassan et al. 2013). Pay structure was not adequate for Chinese workers, the laborers were below legal working age and they were subjected to physical and verbal abuse (Balliet and Van Lange 2013).Samsung should have developed a strong measure for supervision and control of its manufacturing divisions in China to ensure that labors are vested with hygienic working conditions (Pinder 2014). Samsung has failed to address the basic needs of workers like physiological and safety needs as suggested by Maslow’s Hierarchy of needs. Neither the hygiene factors of work environment like motivation from seniors, good work conditions nor adequate pay as suggested by Herzberg’s Dual Factor theory were implemented by Samsung in manufacturing facilities in China(Cerasoli, Nicklin and Ford 2014). The ethical issues of the case can also be attributed to failure of Samsung to adequately manage the value chain activities, poor analysis of demand of goods and supply of labor and an overall poor management structure, laws and regulations in China (Langley et al. 2013).
Samsung took relevant steps post-failure to prevent a reoccurrence and to recover the organization’s stakeholders. Samsung acknowledged the crisis in violation of ethics immediately and confessed that demands in production dramatically increased in recent years, which might be the possible reason of poor working conditions in China. Samsung presented the opinion that the organization reviews its manufacturing facilities frequently to check work conditions of workers like overtime work. Samsung presented the view that demands sore high when production lines are completed which leads to the launch of new products in the market, and this high-demand might have led to poor work conditions for laborers of China(samsung.com/in/ 2017). However, Samsung tried its best to protect its reputation in the marketplace which was tarnished due to the allegations of labor exploitation in China. Samsung clearly mentioned that the organization strictly practiced zero-tolerance towards hiring of children who are below the legal working age. Samsung clearly stated that the organization will conduct audit to review the working conditions of 250 Chinese companies that play an integral part of its supply chain. Samsung mentioned that it will terminate contract with the Chinese Companies if they were found guilty of abuse of labor or violation of labor rules in China.
Conclusion
It can be concluded that ethics are of prime importance for a business organization to create value for its stakeholders. Samsung should adopt the action plans to ensure that the organization does not get involved in any such ethical issues in future which can tarnish the reputation of the organization. Modern customers always prefer to stay loyal to a Company who abides by ethics, takes initiatives in activities related to Corporate Social Responsibility and is socially responsible. Thus, Samsung needs to abide by the action plan to resolve its ethical issues and regain its brand image in minds of public. The adoption of the action plan will ensure that Samsung will be able to resolve its ethical issues so that the brand image of the Company is preserved in mind of customers. Involvement in ethical cases like labor abuse and hiring workers below the labor age can decrease the sales figure and profitability of Samsung. Thus Samsung should ensure to revise its human resource policies and practices in developing nations like China. The leaders of Samsung should ensure that workers in China stay motivated and their productivity increases. The human resource strategies of Samsung adopted for manufacturing firms in China should be in alignment with the values, mission, vision and organizational culture of Samsung.
Reference List
Akta?, E., Çiçek, I. and K?yak, M., 2011. The effect of organizational culture on organizational efficiency: The moderating role of organizational environment and CEO values. Procedia-Social and Behavioural Sciences, 24, pp.1560-1573.
Balliet, D. and Van Lange, P.A., 2013. Trust, conflict, and cooperation: A meta-analysis. Psychological Bulletin, 139, p.1090.
Cerasoli, C.P., Nicklin, J.M. and Ford, M.T., 2014. Intrinsic motivation and extrinsic incentives jointly predict performance: A 40-year meta-analysis. Psychological bulletin, 140(4), p.980.
Chiaburu, D.S., Oh, I.S., Berry, C.M., Li, N. and Gardner, R.G., 2011. The five-factor model of personality traits and organizational citizenship behaviours: a meta-analysis.
Ford, R.C. and Richardson, W.D., 2013. Ethical decision making: A review of the empirical literature. In Citation classics from the Journal of Business Ethics (pp. 19-44). Springer Netherlands.
Foss, N.J., Husted, K. and Michailova, S., 2010. Governing knowledge sharing in organizations: Levels of analysis, governance mechanisms, and research directions. Journal of Management studies, 47(3), pp.455-482.
Hassan, S., Mahsud, R., Yukl, G. and Prussia, G.E., 2013. Ethical and empowering leadership and leader effectiveness. Journal of Managerial Psychology, 28(2), pp.133-146.
Langley, A., Smallman, C., Tsoukas, H. and Van de Ven, A.H., 2013. Process studies of change in organization and management: Unveiling temporality, activity, and flow. Academy of Management Journal, 56(1), pp.1-13.
Miner, J.B., 2015. Organizational behavior 1: Essential theories of motivation and leadership. Routledge.
Pinder, C.C., 2014. Work motivation in organizational behavior. Psychology Press.
Resick, C.J., Hargis, M.B., Shao, P. and Dust, S.B., 2013. Ethical leadership, moral equity judgments, and discretionary workplace behavior. Human Relations, 66(7), pp.951-972.
Robbins, S.P. and Judge, T., 2013. Organizational behavior.
samsung.com/in/. 2017. Samsung. [online] Available at: https://www.samsung.com/in/ [Accessed 25 Oct. 2017].
theguardian.com. (2017). Samsung ethics. [online] Available at: https://www.theguardian.com/technology/2012/sep/05/samsung-accused-exploiting-workers-china [Accessed 25 Oct. 2017].
Thomas, R., Sargent, L.D. and Hardy, C., 2011. Managing organizational change: Negotiating meaning and power-resistance relations. Organization Science, 22(1), pp.22-41.
Tsai, Y., 2011. Relationship between organizational culture, leadership behaviour and job satisfaction. BMC health services research, 11(1), p.98.
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