Executive Summary
Today’s world is dominated by business enterprises that have a global reach and scope, investment worth trillions of dollars and hundreds of thousands of employees. Many of these global players, however, have a very similar narrative. They are based on an individual who had an idea that eventually grew into a global corporation. Samsung is one of these corporations, having begun as a sole proprietorship in 1938. The instant research paper reports on a careful analysis of Samsung electronics from a perspective of both organizational architecture and organizational culture. It looks at the mission of the organization, the way the organization reacts to external forces, the CSR and ethics of the company as well as its eventual organizational culture. Results show that albeit Samsung is a major manufacturer today, it still retains the initial identity of the trading company it began as. For a start, there is no definitive definition of the kind of products that Samsung deals in. If the market wants it, Samsung will make and market it. From items as small as phones to those as large as ships and industrial plants, Samsung produces all. In its achievement of these objectives, Samsung has employed one positive and one negative attributes, both informing its organizational culture. These are a great advancement of technology through innovation and very selective adherence to laws, rules, and regulations. These are the keys to the success of Samsung and the building blocks for its organizational culture.
A century of operations has exponentially transformed the nature, scope, and approach of Samsung, growing it into one of the largest manufacturers in the world. However, its initial culture as a 1938 trading company, which reacts to, rather than control its supply chain, can still be seen in the current organizational architecture and organizational culture of Samsung (Samsung, 2017). The main purpose of this research paper is to delve into the current status of the Samsung group based both on the internal and external environment of the company. A secondary aspect of the research will also reflect on how the company has retained and/or changed its identity as a trading company. The first aspect investigated will be matters relating to the current mission of the company. The next will be the crucial external environmental subject of competition and how it bears on Samsung. Aspects of the CSR of Samsung will also be investigated culminating in the overall organizational culture.
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Contemporary Vision and Purpose
Samsung’s mission 2016/2017
The mission and purpose of Samsung in 2016/2017 is premised on their new vision "Inspire the World, Create the Future." This is based on harnessing the three main strengths of Samsung so as to benefit its three key networks (Samsung, 2017). The three key strengths are the development of new technology, employing innovation in their products, and making creative solutions. These strengths will be used for the benefit of the industries that Samsung operates in, the company’s external as well as internal stakeholders, mainly the employees. The expected outcome of the mission is to play a part in bettering the world even as they create a richer experience for all (Samsung, 2017).
The Ideal Mission and Purpose
The ideal mission of a company should be precise yet inspirational to both the internal and external stakeholders of the company. It should tell the employees what is expected of them as well as what they seek to achieve. At the very same time, the mission should be able to tell the external stakeholder what the company is about as well as what to expect from the company (David & David, 2014). The mission should, therefore, be aimed at bringing together the external and internal stakeholders of a company and inspiring them to work together towards its achievement. Further, the mission should outline a purpose that is both comprehensive and achievable.
Evaluation of Samsung’s Mission and Purpose
Samsung produces hundreds of products for customers across the globe hence the difficulty in having a much-particularized mission and purpose. However, the company has still managed to overcome this predicament to create a mission and purpose that meets the ideal specifications. The mission speaks and indeed inspires both the internal and external stakeholders of the company towards the achievement of its goals. However, this purpose is not broken down into concrete goals which leave Samsung with a blank check when it comes to practical objectives thus rendering the company a black check in day to day decision-making.
Profit Orientation
There are two main types of profit orientations. The first entails seeking to maximize the net profit per product sold by setting a high-profit margin per product. This makes the product exclusive and unique creating a high demand and low supply. Most of the profits will then come from the high prices. The alternate method is to have a lower net profit margin to boost sales then elicit profits from the high sales. This is based on creating cost-effective and innovative production systems and supply lines to ensure that bulk production is profitable for the company (Kotler et al., 2015). Samsung advertises value for the price and focuses on providing cutting edge technology at lower prices. Therefore, their profit orientation is based on volume of sales as opposed to high net profit per item (Mills, 2017). The company bases their product and market orientation on the basis that Samsung can match the quality of the best in the industry yet beat them on the pricing. This concept can be associated with the trading company history of Samsung where strategies react to the market instead of creating the market.
Competition against Samsung
Area Mostly Affected By Competition
Samsung is the largest conglomerate in South Korea and the dominant brand in almost all the areas that it has ventured into. However, at the advent of the 20th century, Samsung entered the mobile phone industry in general. The company then ventured into the production of smartphone parts and eventually smartphones themselves (Mills, 2017). It has achieved exponential success in this venture but opened itself up to massive competition with its erstwhile client, Apple Inc. Today, more so in America and China, it is almost impossible for Samsung to be mentioned without its competition with Apple coming into mind.
Impact of Competition With Samsung
The competition between Samsung and Apple in the smartphone industry has almost reached the scope of defining the two companies. Apple sells itself as having the most innovative and cutting technology in the world as far as smartphones are concerned. Samsung on the other part does not try to outdo Apple. Instead, it markets itself as being able to match the best available technology, an obvious reference to Apple, but at lower prices (Mills, 2017). Indeed, Samsung does not even pretend not to ape the technological advances of Apple, albeit with enough if a twist to avoid intellectual property liability. In several instances, Samsung has been fined by international regulators for this (McCarthy, 2016). The company happily pays the fines and continues raking in massive profits.
The Ideal Way to Deal with Cutting-throat Competition
The rule of the thumb about aggressive competition is differentiation. A company that is facing acute competition in a product should endeavor to create a product so unique that the competition becomes irrelevant. The second important rule is never to engage in unhealthy competitive practices such as imitation and mimicking the competitors’ products. If the above-mentioned options are not practicable, the next option is to stop treating the competition as competition through either ignoring them or partnering with them (Kotler et al, 2015).
Analysis Samsung’s Approach to Competition
With regard to the smartphone industry, Samsung has not only ignored all the rules of healthy competition but also broken them. Indeed, the practice of Samsung relates more to that of a trading company than a manufacturing company. The company simply finds out what the market needs and moves to provide and worry about rules later. Instead of seeking differentiation, Samsung has carefully sought to ape Apple products. Instead of partnering with Apple, Samsung, a former Apple supplier actually broke up their relationship. Finally, instead of ignoring Apple, Samsung has made competition with Apple an integral part of its market mix (Mills, 2017). Surprisingly, however, Samsung has clearly gotten away with it as it is now the largest smartphone manufacturer in the world. On the other hand, companies that sought to compete with Apple by following the rules have all failed with some erstwhile global brands such as Nokia going under. In this regard, therefore, Samsung provides an example where theory about competition needs further research.
Corporate Social Responsibility and Ethics
Current Status
The CSR of Samsung is quite impressive and also has a global scale. Samsung provides an array of global projects that it is undertaking as part of its CSR. These projects fall under the four major categories of education, employability, healthcare and sports (Samsung India, 2017) . Research shows that the company spends millions of dollars globally towards the achievement of these projects. Among the areas worthy of mention is employability, which Samsung applies both internally and externally. Their definition of employability relates to acquiring the right skills to attract employment. In this regard, Samsung invested in higher education as well as vocational training globally with great success (Samsung India, 2017) . This relates both to its employees as well as members of communities within which Samsung operates. Samsung has also had a lot to say about its ethical acumen and how the company employs proper business ethics in all its undertakings. However, evidence found after a careful research shows otherwise. Samsung has been indicted and in some instances convicted of serious breaches of business ethics and been fined up to US$ 1 billion in a single case (McCarthy, 2016). This includes issues such as labor violations and human rights abuses, intellectual property violations and indulging in unhealthy competition (Cuthbertson, 2016).
Ideal CSR and Ethics
CSR is based on the fact that a company is a social citizen of any community under which it operates. Therefore, just as the human members of a community, companies are bound to go out of their way to contribute towards the betterment of both society and humanity (Kolk, 2016). This includes initiation of projects such as environmental conservation, humanitarian assistance, community empowerment, and infrastructure development for larger companies. Business ethics, on the other hand, binds companies to follow all the laws, rules and regulations. Further, companies should always seek to do what is right and make the right decisions even when these are not the most profitable options. Finally, CS Rand ethics go hand in hand, a company that invests a lot to aid the community but does not employ proper business ethics is only pushing ill-gotten funds back to the community perhaps to assuage guilt and buy goodwill (Kolk, 2016). Therefore, even before a company endeavors to give back to the society, it must ensure that it used proper business ethics to earn what it is giving back.
Evaluation of Samsung from the Perspective of CSR and Ethics
After carefully evaluating the reputation of Samsung from the perspective of CSR and ethics, it would be unfair to give the company anything but a poor score based on their labor relations practices and human rights abuses including child labor (Cuthbertson, 2016). It is clear that the only laws that Samsung will not break, is those that it cannot get away with it. The same is represented by the way Samsung has been handling its unfair competition with Apple. Indeed, Samsung is a manufacturer who carries out business as a trading company. If Samsung’s customers ask for the products of another company, Samsung will simply find a way to reverse engineer the product and sell as long as the legal consequences do not eat too much into the profits. Whereas the CSR efforts of Samsung are commendable, they pale in the face of the business ethics abuses.
Organizational Culture
Organizational Culture and Cultural Fit
Organizational culture is the sum total of the outcome of the organizational architecture of the company. It entails both what the vision, mission, and objectives of an organization are as well as how the organization goes about achieving this vision, mission, and objectives (Brickley et al, 2016). There are also the internal and external aspects of organizational culture. The internal aspects entail how the company operates and what set of rules it adheres to in its operations. The external aspect relates to the reputation that the company holds. Humans also have an ethical, cultural and moral identity based on belief as well as the concept of right and wrong. The organizational culture of an employer can either align with or collide with personal ethics and morality of an employee, and this leads to job satisfaction or the lack of it, hence determine whether the individual enjoys or endures their work (Brickley et al, 2016). This is why there is a need for a fit between the personal culture and that of the organization.
Organization Culture of Samsung
A careful analysis of the vision, mission, and purpose of Samsung will show that it is a trading company with a twist. The twist lies in the fact that instead is trading in the commodities of other companies as other companies do, Samsung trades on their own. Within a few decades of business, Samsung had expanded its trading company into food processing, the textile industry, insurance business, securities and retail business. By today, the product line is near infinite but keeps rising by the day. This implies that Samsung looks around to figure out what customers need and then come up with ways on how to produce goods and services to meet that need. The company makes products as small as mobile phone parts for other manufacturers and as big as sailing ships. It also offers medical services and medical insurance and produces advanced chemicals. Its internal culture can, therefore, be summed up as using innovation to produce what customers need at any cost. Its external reputation, on the other hand, is twofold. First, Samsung is a trillion dollar company and one of the most successful brands in the world. It is reputed for innovation, cutting edge technology and an innovatively cost effective production chain. However, Samsung is also reputed for cutting corners and ignoring ethics in its attempt to do whatever it takes to achieve its goals. Any individual who elects to work for Samsung must choose to allow the end to justify the means.
From a business perspective, the world is a very large place and only the very best can be considered as the best in the world. Samsung is clearly among the best in the world in the global scope, the volume of sale and innovativeness as this research has clearly shown. From 1938 when Samsung started as a trading company, it has grown in leaps and bounds by producing, instead of sourcing what its customers need. Samsung makes all manner of good and services from mobile phones, medical supplies, and services, ships to household equipment. In the process of growth, Samsung has perfected the art of adapting to the environment including what the market needs. Based on its profit orientation, it seeks to produce en masse, sell at lower prices and make profits from the volume of sales. Further, through its growth process and even to this very date, Samsung continues to prove willingness to break laws and ethics for profit. The company does not mind paying a huge fine for a venture that will eventually be profitable. This is an exponentially successful venture but built on very questionable values.
References
Brickley, J. A., Smith, C. W., Zimmerman, J. L., Zhang, Z., & Wang, C. (2016). Managerial economics and organizational architecture . Sixth Edition. New York. McGraw-Hill Education
Cuthbertson, A. (2016, May 15). Apple and other tech companies accused of "worst forms" of child labor abuse. Retrieved from http://www.newsweek.com/apple-samsung-and-microsoft-linked-child-labor-abuse-claims-417313
David, M. E., & David, F. R. (2014). Mission statement theory and practice: A content analysis and new direction. International Journal of Business, Marketing & Decision Science , 7 (1), 95-110
Kolk, A. (2016). The social responsibility of international business: From ethics and the environment to CSR and sustainable development. Journal of World Business , 51 (1), 23-34
Kotler, P., Keller, K. L., Manceau, D., & Hémonnet-Goujot, A. (2015). Marketing management (Vol. 14). Englewood Cliffs, NJ: Prentice Hall
McCarthy, K.. (2016, October). Cheer up Samsung! You might get back $400m for copying the iPhone. Retrieved 29 April 2017 from https://www.theregister.co.uk/2016/10/11/samsung_might_get_back_400m_from_apple/
Mills, C. (2017, February 03). Apple is destroying Samsung where it really matters. Retrieved 29 April 2017 from http://bgr.com/2017/02/03/apple-vs-samsung-sales-2016/
Samsung India. (2017, April 03). Samsung Electronics in India | Samsung Electronics | About Samsung . Retrieved 29 April 2017 from http://www.samsung.com/in/aboutsamsung/samsungelectronics/india/csr-policy/
Samsung. (2017). Samsung . Retrieved 29 April 2017 from http://www.samsung.com/us/aboutsamsung/sustainability/sustainablemanagement/samsungvaluecodeofconduct/
