The Ethical Analysis and Evaluation of:

Samsung Bribery Scandal

Presented
In Partial Fulfillments of the
Course Requirements
For
FIN 4634
International (Global) Banking
Prepared for:
Marcos A Kerbel
Participating Adjunct Professor
Department of Finance
Florida International University
Miami, Florida
Prepared by:
Zion Williams
5780042
786-647-2862
Zwill017@fiu.edu
November 13, 2019

1
 1) What are Ethics and their Importance in global banking and business today?

Ethics is a moral philosophy or code of conduct held by an individual or group of

individuals. Everyone has a code of ethics that they follow by, though there are

ethics that most individuals and others that are personalized to an individual or

group. Ethics can subjective, there may be Ethics based off if an individual

practice a religion and if so, based on what the religion that they practice. Ethics

is apart of all Facets of life, from home life, to school, to work and even hospitals.

We’ll be focusing on how ethics affects businesses and why they are importance.

Business ethics is the system of moral and ethical beliefs that that influences the

values, behaviors, and decisions of a business organization. Consequently, some

business ethics are enforced through the implementation of laws. Components

of business ethics in place through laws are environmental regulations, minimum

wage, and restrictions on insider trading and collusions1. Examples of

Environmental Regulations include The Clean Air Act, which forces Agricultural

entities to limit the levels of pollutants emitted. Another Example of

Environmental Regulations is Merchandising Compliance which regulates any

products a business might sell that contains any substance that could affect the

ozone layer. Another environmental regulation is the National Emissions

Standards for Hazardous Air pollutants, which regulate air toxin products such as

gasoline, engines test cells, and organic liquids distribution.2 Minimum wage is

1
The importance of business ethics by Melissa Horton. February 25 2019
https://www.investopedia.com/ask/answers/040815/why-are-business-ethics-important.asp
2
Environmental Regulations your business needs to know about July 31 2014

2
 the least amount an employer is legally obligated to pay an employer. Minimum

wage is in place to make sure employers are adequately reimbursed for their

service and is based on the cost of living. Insider is when an individual decides to

invest in a company based on information not known by the public. Insider

trading is illegal, because it gives an individual an unfair advantage, at the

expense of other investors. Collusion is when two companies conspire to set

prices at a certain price or cost in order to control the market. Collusion leads to

higher prices that affect consumers and fosters other anti-competitive measures.

The culture and competency of Management team of a company sets the tone

for the rest of the employees. If the management team is ethical, follow all the

rules and guidelines, that behavior will be reflected in the employees, which not

only benefits the individuals in the company but also the business and clients

that they serve. Business ethics can vary based on the industry and the nation.

Examples would be when an investment advisor must make the best decision for

his client, however it’s not the decision that would give the broker the highest

commission. Another of how ethics differ based on industry is say, A tv content

provider for children may feel obligated to promote good values and get rid of

content that may not be well suited for children. Another good example is A

comparison of Energy and Tech companies. Energy companies must show how

they are limiting their economic footprint, whereas a Tech company must show

how they plan to protect consumer information and privacy. Being an ethical

https://www.kabbage.com/blog/environmental-regulations-your-business-needs-to-know-about/

3
 company has many benefits, from employee loyalty, increases profitability, gives

you a good reputation, which will attract investors especially at a time where

being socially responsible and green investors on the rise.

2) What was the Case About?

The Samsung Scandal is about whether Samsung sent bribes aimed at winning

Park Geun-hye favor to Choi Soon Sil. Choi was the friend and secret confidant of

South Korea’s former president Park Geun-hye.3

3) Who were the individuals and Company involved?

The individuals and companies involved are the former president Park Geun-hye,

Park Geun-hye’s friend Choi Soon Sil. The Samsung leader JY Lee. The company

involved is Samsung.

4) When did it happen, where did it occur and how much money was involved?

The Samsung Scandal occurred in 2016, in the country of South Korea and 38

million dollars was involved in the scandal.

5) Why did it Happen?

3
4 things about the Samsung Group bribery August 29 2019
https://www.straitstimes.com/asia/east-asia/4-things-about-the-samsung-group-bribery-case

4
 The Samsung Scandal Happened Because Samsung was being unethical and, in an effort,

to approve a controversial merger of two Samsung affiliates, which would consolidate

power, they gave out bribes.4

6) How did it come to the attention of the media?

The Samsung Scandal came to the attention of the media after Samsung headquarters

was raided after officials had discovered that Choi had been allowed to edit Park’s

Presidential draft speeches and an investigation into her exerting inappropriate state

affairs led them to Samsung.5

7) What was the Outcome of the case?

The outcome of the Samsung scandal was JY Lee was found guilty on August 2017, on

charges of embezzlement and bribery and received a 5 year sentence, that was later

halved and then suspended, however the sentencing is being appealed by both parties.

8) How could this case have been avoided?

This case could have been avoided, if Samsung was ethical and did not try to bribe the

President.

9) What can we learn from this case?

What we can learn from the scandal is that It never pays to be unethical, it does not

matter if you are conspiring with the head of the state, it will eventually be found out

and you’ll be forced to deal with the consequences.

4
Samsung boss’ retrial for bribery charges begins October 25 2019
https://www.zdnet.com/article/samsung-boss-retrial-for-bribery-charges-begins/

5
4 things about the Samsung Group bribery August 29 2019
https://www.straitstimes.com/asia/east-asia/4-things-about-the-samsung-group-bribery-case

5
 Bibliography

1) Horton, Melissa. “Why Is Business Ethics Important?” Investopedia, Investopedia, 13 Oct. 2019,

https://www.investopedia.com/ask/answers/040815/why-are-business-ethics-important.asp.
2) “Environmental Regulations Your Business Needs To Know About.” Grow With Kabbage, 26 Feb.
2018, https://www.kabbage.com/blog/environmental-regulations-your-business-needs-to-
know-about/.
3) Hermesauto. “4 Things about the Samsung Group Bribery Case.” The Straits Times, 29 Aug.
2019, https://www.straitstimes.com/asia/east-asia/4-things-about-the-samsung-group-bribery-
case.
4) Mu-Hyun, Cho. “Samsung Boss' Retrial for Bribery Charges Begins.” ZDNet, ZDNet, 25 Oct. 2019,
https://www.zdnet.com/article/samsung-boss-retrial-for-bribery-charges-begins/.
5) Mu-Hyun, Cho. “Samsung Boss Arrested in Korean Bribery Scandal.” ZDNet, ZDNet, 16 Feb.
2017, https://www.zdnet.com/article/samsung-boss-arrested-in-korean-bribery-scandal/.
6) Mu-Hyun, Cho. “Samsung Chief Faces Arrest Again over Korean Bribery Scandal.” ZDNet, ZDNet,
15 Feb. 2017, https://www.zdnet.com/article/samsung-chief-faces-arrest-again-over-korean-
bribery-scandal/.