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TEACHING NOTE
CASE 31
Samsung’s Environmental
Responsibility
Overview
South Korea-based Samsung Electronics is a leader in the global electronics industry. Its smartphone, the
Galaxy S2, was recognized in 2012 with a product of the year award. In recognition of Samsung’ green
management practices, developed by the company in a strategic initiative in 2009, four of Samsung’s
products received Eco Design awards at the 2012 Consumer Electronics Show (CES), and an Energy Star
Partner of the Year award from the U.S. Environmental Protection Agency (EPA). A Chinese business school
lauded Samsung as one of the 100 greenest foreign companies operating in China.
In spite of all its awards and achievements, Samsung’s management faced considerable criticism. Reports
surfaced that Samsung had violated labor rights and health rights of employees and was involved in environmental
violations. In some of its production units, Samsung was said to have neglected safe working conditions. Certain
toxic chemicals and cancer-causing solvents were discovered in its plants, information regarding 10 of 83
chemicals was not disclosed, and hazardous waste had been illegally dumped. Samsung had also allegedly
violated child labor laws.
At the end of 2011, Samsung’s net sales reached $220.1 billion, net income was $21.2 billion, and total assets
booked at $343.7 billion. Samsung’s stated objectives for 2020 included revenues of $400 billion, greater
environmental sustainability, and recognition as being among the world’s top five brands.
Suggestions for Using the Case
The “Samsung” case provides an excellent opportunity to stimulate a debate about the interests of various
stakeholders in environmental sustainability and corporate social responsibility (CSR), and thus is quite suitable
for application of the material covered in Chapter 9, specifically:
n The term corporate social responsibility concerns a company’s duty to:
• Operate in an honorable manner
• Provide good, safe, healthy working conditions for employees
• Encourage workforce diversity
• Act as a good steward of the environment
• Support philanthropic endeavors in local communities where it operates and in society at large
*
*This teaching note reflects the thinking and analysis of Professor Armand Gilinsky, Sonoma State University. We are most grateful
for his insight, analysis and contributions to how the case can be taught successfully.
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n The triple bottom line refers to company performance in three realms: economic, social, and environmental
n Sustainability is a term that is used in various ways, but most often it concerns a firm’s relationship to the
environment and its use of natural resources:
• Sustainable business practices are those capable of meeting the needs of the present without compromising
the world’s ability to meet future needs
n A company’s environmental sustainability strategy consists of:
• Its deliberate actions to protect the environment
• Provisions for the longevity of natural resources
• Maintenance of ecological support systems for future generations
• Guardianship against threats that might ultimately endanger the planet
n Well-crafted CSR and environmental sustainability strategies are in the best long-term interest of shareholders,
for the reasons just mentioned and because they can avoid or preempt costly legal or regulatory actions
n CSR strategies and environmental sustainability strategies that both provide valuable social benefits and
fulfill customer needs in a superior fashion can lead to a competitive advantage
n In addition to providing a competitive advantage, there are solid reasons why CSR and environmental
sustainability strategies may be good business — they can be conducive to:
• Increased buyer patronage
• Reduced risk of reputation-damaging incidents
• New opportunities for revenue enhancement
• Cost reduction and minimization of penalties for non-compliance.
What to Tell Students in Preparing the Samsung Case for Class. To provide students with guidance
in what to do and think about in preparing the Samsung case for class discussion, we strongly recommend they
master and then apply many of the concepts and analytical methods in Chapter 9. Be sure to:
n Provide class members with assignment questions and insist that they prepare good notes/answers to
these questions before coming to class. Our recommended assignment questions for the Samsung case are
presented in the next section of this TN. You may wish to have class members concentrate their attention on
a subset of these questions, depending on what you want to emphasize during the class discussion.
To facilitate your use of assignment questions and making them available to students, we have posted a file of
the Assignment Questions contained in this teaching note on the instructor resources section of the Connect
Library. In all instances, these assignment questions correspond to the assignment questions in the teaching
note for the case.
In our experience, it is quite difficult to have an insightful and constructive class discussion of an assigned case
unless students have conscientiously have made use of pertinent core concepts and analytical tools in preparing
substantive answers to a set of well-conceived study questions before they come to class. In our classes, we
expect students to bring their notes to the study questions to use/refer to in responding to the questions that
we pose. Moreover, students often find that a set of study questions is useful in helping them prepare oral
team presentations and written case assignments—in addition to whatever directive question(s) you supply for
Case 31 Teaching Note Samsung’s Environmental Responsibility
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these assignments. Hence, we urge that you provide students with assignment questions—either those we have
provided or a set of your own questions—for all those aspects of a case that you believe are worthy of student
analysis or that you plan to cover during class discussion.
Utilizing the Guide to Case Analysis. If this is your first assigned case, you may find it beneficial to have
class members read the Guide to Case Analysis that immediately follows Case 31 in the text. The content of this
Guide is particularly helpful to students if your course is their first experience with cases and they are unsure
about the mechanics of how to prepare a case for class discussion, oral presentation, or written analysis.
Suggested Assignment Questions for an Oral Team Presentation or Written Case Analysis. We
believe that, as mobile phones and other consumer electronic products are familiar to students, the Samsung case
is quite well-suited for written assignments and oral team presentations. Our suggested assignment questions are
as follows:
What grade would you give to Samsung for its efforts to become a socially responsible, environmentally
sustainable corporation? Prepare a report that includes: (1) an evaluation of Samsung’s achievements
to date, (2) an assessment of Samsung’s commitment to corporate social responsibility, and (3) a set
of action recommendations that address each of the elements of the triple bottom line of corporate
environmental sustainability. Your report should not exceed 5-6 pages, plus an assortment of charts,
tables, and exhibits that support your analysis and recommendations.
Assignment Questions
1. Does it seem that Samsung has made a commitment to operating in a socially responsible manner? Based
on the five components of a socially responsible strategy depicted in Figure 9.2 in Chapter 9, is Samsung
Corporation’s Vision 2020 strategy socially responsible? How does it address the needs of all of its
stakeholders? Explain.
2. How does Samsung link rewards and incentives to strategically-important employee behaviors and the
company’s targeted sustainability outcomes?
3. Evaluate the key environmental strategy implementation efforts at Samsung since the roll-out of its “Eco-
Management Initiative 2013” in 2009. Has management allocated sufficient resources to the sustainability
effort? Exercised strong leadership? Instituted polices and procedures that facilitate good execution of
sustainability? Explain.
4. What grade would you give to Samsung for its efforts to become a socially responsible, environmentally
sustainable corporation?
5. What recommendations would you make to Samsung management to increase its triple bottom-line
performance? Provide a justification for these recommendations.
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Teaching Outline and Analysis
1. Does it seem that Samsung has made a commitment to operating in a socially
responsible manner? Based on the five components of a socially responsible strategy
depicted in Figure 9.2 in Chapter 9, is Samsung Corporation’s Vision 2020 strategy
socially responsible? How does it address the needs of all of its stakeholders? Explain.
As depicted in Figure 9.2, corporate social responsibility (CSR) programs commonly include the following
five elements:
CSR strategy elements
1. Actions to ensure the company operates honorably and ethically
3. Actions to enhance employee well-being and make the company a great place to work
• Creating a work environment that enhances the quality of life for employees
4. Actions to promote workforce diversity
Of the five elements above, Samsung appeared to have focused primarily on elements #2 and #3,
“Environmental Stewardship” and “Employee Well-being,” with some attention paid to element #5,
“Philanthropy.”
As part of its Vision 2020 strategy, Samsung identified climate change and energy management as one of its
important management priorities:
Environmental stewardship
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n Adopted as a goal the greening of not only its products and technologies, but also the workplace and the
communities — ‘PlanetFirst’ approach
n Accomplished increase of 86 percent in green investment in 2011 over 2010
n Implemented greenhouse gas (GHG) emission management system to monitor direct as well as indirect
sources of emissions related to all its business activities as well as its global partners’ — mid-term target
50 percent reduction in GHG emissions by 2013 in comparison to 2008
n Established a 3% water usage reduction target per production unit by 2015
n Set a goal of 30% reduction in water pollution by improving the efficiency of waste water processing
facilities
n Aimed to achieve a waste recycling rate of 95% and a recycling-oriented waste management system
n Set a waste reduction target of 10% annually till 2015
Employee well-being
n Provided incentives via the New Technology Development Contest
n Set up a green communication system through which information and ideas on environmental affairs
was exchanged.
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n Set up a Climate Change Response Committee to look into issues related to GHG emissions and energy
n Turned its surplus water supply into an emergency response system to avoid any negative impact on its
business.
Philanthropy
n Launched “Hope for Children” program in 2011
2. How does Samsung link rewards and incentives to strategically-important employee
behaviors and the company’s targeted sustainability outcomes?
As stated in Chapter 9, Samsung has good reason to operate within ethical bounds, if only to (1) avoid the
risk of embarrassment, scandal, disciplinary action, fines, and possible jail time for unethical conduct on its
Although the case mentions no particular rewards and incentives for employee participation in its
sustainability efforts, Samsung offered its stakeholders some support in the form of shared growth, zero-
Shared growth
Samsung claimed that it laid strong emphasis on shared growth with its employees and suppliers as
incentives. The company introduced programs such as ‘Globally Competitive SMEs’, a ‘Supplier Support
Zero-Accident Green Operation Sites
Create recycling-centric production facilities and safe workplaces where wastes are recycled and accident
Employee Assistance for Grave Illnesses
Responded to criticisms about the severely limited eligibility of cancer patients — who had worked at its