Indian Culture, Ethics and Values-based Management
PGP IInd Year
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Question (A): Describe an ethical failure by an organisation on an important business decision and its adverse downstream consequences.
ETHICAL FAILURE BY SAMSUNG
Samsung Electronic one of the largest multi-billion dollar corporations in the world recently found itself on the wrong side of ethical behaviour. In 2010 Samsung Electronic exceeded the $150bn mark in the annual sales for the first time in its history. This makes it one of the world’s top three companies in the electronic industry after Siemens and Hewlett-Packard. Samsung’s all business units, including end-product and component businesses, posted solid earnings in last year thanks to strong sales of Galaxy smartphones and increased shipments of display panels used in tablets and smartphones, which put extra pressure on company to meet the demand of the market. So in order to meet the demand Samsung asked their outsourcing company (electronic component) HEG electronic (china) to hire more workers and increase the shift timings. This resulted into hiring of underage workers and long shift timing without proper breaks. In the past as well, there were some horror stories about Foxconn, one of the world’s biggest electronic components manufacturers, whose major clients include Acer, Apple, and Amazon, and how they mistreated their workers. But the region is brimming with countless numbers of factories operated by lesser known firms that Foxconn may not be the worst perpetrator. Human rights group China Labor Watch is trying to raise the issue of unethical labor practices at HEG Electronics, a major supplier for Samsung, Motorola and LG. According to the group, HEG Electronic has started employing underage workers (under 16 years of age) to work at its factory due to the high demand of the electronic components. Initial investigation put the number down at seven, but later research...
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