Enhancing shared value and sustainability practices of global firms: The case of samsung electronics

• DOI: http://doi.org/10.1002/jsc.2255
• Published date: 01 March 2019
• Date: 01 March 2019

RESEARCH ARTICLE

Enhancing shared value and sustainability practices of global

firms: The case of samsung electronics

*

Yeon W. Lee

Seoul Business School, Seoul School of

Integrated Science and Technology, Seoul,

South Korea

Correspondence

Yeon W. Lee, Seoul Business School, Seoul

School of Integrated Science and Technology,

[03767] 46, Ewhayeodae 2-gil, Seodaemun-gu,

Seoul, Republic of Korea.

Email: ywlee@assist.ac.kr

Abstract

Samsung became involved in social programs that could effectively tackle the problems at stake

while linking them to firm's benefits. Korean firms, particularly the chaebol, urgently adopted the

shared value concepts as part of their solutions to ease social tension while garnering efforts to

enhance corporate value. Samsung has engaged in sustainability practices that mainly derived

from the firm's motivations to improve corporate image. It needs to approach shared value by

realigning the firm's value chain activities with social issues, focusing on core areas, and engag-

ing other for sustainable shared value practices.

1|INTRODUCTION

As an important business requisite for corporations in the current era,

the sustainability practices of firms hold great value for research as

corporate social responsibility (CSR) theories have evolved to include

business strategy concepts that ultimately aim to enhance corporate

competitiveness. Also, CSR has now expanded to serve as a valuable

tool for multinational corporations, especially when they are entering

new emerging markets (Rondinelli & Berry, 2000; Brammer, Pavelin, &

Porter, 2006; Kolk & Van Tulder, 2010).

In this study, Samsung Electronics (Samsung, hereafter) is selected

and reviewed. As Samsung has become a leading company in the

global market, one of the priorities in its corporate mission has been

on building a global brand for sustainability. In 2013, Samsung estab-

lished the Corporate Citizenship Group to integrate, systemize, and

coordinate sustainability programs in Samsung's regional offices

throughout the world. Under its efforts to harmonize localized sus-

tainability programs, Samsung's goal was to increase the efficiency of

these programs through cross-learning while building a globally com-

petitive image in sustainability.

The explicit use of the vocabulary “Creating Shared Value (CSV)”

in Samsung's sustainability reports since 2013 supports the company's

dedication to build up leadership and a competitive program. The

choice of word and Samsung's efforts received great attention from

the Korean media, and it seemed the company was headed to embrac-

ing this new concept which emerged from key doctrines of business

role in the society. Since earlier research on Samsung's sustainability

practices primarily used the CSR framework, this paper intends to

provide more updated and holistic approach by incorporating the logic

of shared value and opportunity (Drucker, 1984; Lee, 2015; Moon,

2012; Moon & Lee, 2014; Porter & Kramer, 2011). The primary moti-

vation to evaluate the sustainability activities of Samsung concerns its

recent shifts and inconsistencies in the approach for CSV.

Since thereare many studies that link the transitional stage in theo-

retical research from CSR to CSV, this paper will begin by briefly

explaining how Porter and Kramer's (2011) CSV approach has been

extended and modified by adding the opportunity perspective

(Drucker, 1984;Moon, 2012 ; Moon & Lee, 2014). Then the four spe-

cific stages (Moon, 2012; Moon & Lee, 2014) and strategies (Moon,

Parc, Yim, & Park, 2011) are introduced asthe main framework for this

study. As the main contribution of this paper, Samsung's sustainability

practices are analyzed along these four stages and fourstrategies. This

research revealsthat Samsung has shown dedicatedefforts to CSV but

at inconsistent and passive levels in truly enhancing business values.

Most of its actions are narrowly focused on doing good and increasing

social value, and it needs further improvements in enhancing competi-

tiveness by linking social issues with the firm's weakness in the value

chain activitieswhile focusing on its core competence.

1.1 |Theoretical developments in the shared value

literature to the opportunity perspective

Earlier research on social responsibility was mainly focused on how

wealthy businessman could contribute to improving the welfare of the

society (Bowen, 1953). This view has gradually changed and sparked

intense academic and business debates on the role of business

beyond its economic contributions such as corporate tax and employ-

ment (Friedman, 1970). A gradual shift in this stream of research

*JEL codes: G32, M14, M16, Q56

DOI: 10.1002/jsc.2255

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