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Examining the Innovations and Market Strategies of Samsung and Apple in the Competitive Smartphone Industry

Jun 8, 2023 | 0 comments

Jun 8, 2023 | Essays | 0 comments


This paper aims to answer the question, “To what extent does Samsung and Apple Inc. engage in unethical labor practices and how does it affect the success of the firm.” Through the company profile for Samsung and Apple Inc., the paper analyses the unethical practices practiced by Apple Inc. and Samsung and how these practices affects the success the respective firms. Ethical marketing practices entail a company ensuring honesty and fairness when marketing its products to customers. The recent years have seen an increase in the companies and organizations that have embraced ethical marketing practices. This can be attributed to the value of such practices to businesses. Ethical marketing practices are of great value to companies like Samsung and Apple Inc. For one, they enable them to enhance their goodwill and reputation on the market. Such practices have also enabled organizations to avoid lawsuits. Similarly, they have also enabled businesses to attract investors and shareholders hence their ability to access capital required for expansion purposes. Organizations that embrace ethical marketing practices are able to retain as well as attract the best talents on market. It is also clear that ethical companies are also able to do business with the best suppliers on the market. There are also costs associated with ethical marketing. Organizations that provide their employees with information relating to the risks associated with their productivity may not be able to attract workforce. However, it is better for it to risk not attracting labor than failing to provide the same information only to harm its employees.


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Ethical marketing practices seek to promote fairness, responsibility, and honesty in all advertising a company or organization may be engaged in. Companies that embrace ethical marketing ensure that they are always honest with their customers when advertising their products and services (Craig & Andrews, 2013). Many businesses have in the past had the tendency to engage in unethical marketing behaviors such as lying to customers in relation to what their product can do with an aim of attracting customers. Samsung and Apple Inc. companies have been accused of engaging in unethical labor practices. It is however imperative to note such practices are no longer common as employees now have the ability to learn the truth with ease. The recent years have also seen an increase in the number of businesses that embrace ethical marketing considering the benefits that accrue in the end (Groucutt, Forsyth & Leadley, 2011). This paper intends to examine the extent to which Samsung and Apple Inc. engage in unethical labor practices and the manner in which it affect the success of the firm.


Samsung has been ranked as the largest phone manufactures in the entire world. The company has experienced great performances in the last few years. The success can be attributed to company’s strong marketing plans that enable it to attract more and more customers. The success of the company can also be attributed to its commitment to continuous innovation to ensure its products serve the needs of the customers. Nonetheless, the company has to aware of what is happening on its environment to ensure continued success. This is because there are various factors on the environment that affect the strategies employed by a company to stay competitive (Kappan, 2010).

Samsung Company has continued to expand, opening branches in many state and continent and this has increased its potential in the market. The Company is making billions of dollars in sales and is recognized as the largest Corporation in the manufacturing of the highly technological products. Up to today, the trend has remained like that for the corporation. Despite all this success in growth, Samsung is also renowned for filing many cases in the labor relations board. Its employees who have complained of unfair labor practices by the corporation have filed most of the cases against the corporation. Most of these complaints come from women who complain that the corporation treats them unfairly by discriminating them. According to Holley, Jennings & Wolters (2012) the women complain mostly of little wages, lack of respect from their bosses, and poor promotion procedures offered by the company. Their plight has attracted attention from human activists, labor unions, civil rights, and community organizations among others. Due to its poor practices in labor relations, the corporation has lost millions of dollars in fines and damages from employees who have taken it to court.

The Company Structure

Samsung has over 80 companies, which are spread out with the activities in regions including shipbuilding, electronics, construction, medical services, and financial services. The Samsung Company deals with the consumer electronics, IT, and Household goods. They offer elevated technology to the customers of the electronics. Their goods in India are refrigerators, color monitors, washing machines, mobile phones, color television, microwave ovens etc. the company structures its good in such that they meet the consumers need.

Samsung Labor Relations and Labor Related Issues It Is Experiencing

Samsung stance in labor relations is questionable. It is questionable because it is expected that a corporation considered as having the largest number of employees in the world to have a systematic and organized labor policies that would place its employees in the first position. It is also expected that the company should have very attractive remuneration packages for its labor force to boost and maintain them for better performance. A company in the status of Samsung attracting so much attention should deploy effective labor relations with it to maintain a balance between the workforce and the output. Nevertheless, it is quite evident that Samsung has not just a negative stance in its labor relations, but has gone further to silence any moves or intentions of labor unions intervening in the matter. According to Holley, Jennings & Wolters (2012) Samsung has strategized in making sure that it has suppressed any unions cropping up in the company. Moreover, attempts from human rights watch researchers to investigate the labor issues in the company have since bore no fruits (Holley, Jennings& Wolters, 2012). The company has even gone further to direct security cameras on the activities of the employees so as to ensure that no activity of a labor union crops up without the management noticing

The labor relation issues that Samsung is facing emanate from the company discriminating one gender and favoring the other. As revealed by Ferrell, Fraedrich & Ferrell (2010) the company is faced with labor discrimination issues and the women complain that most of the high positions in the company are only preserved for men. The women in the company amount to approximately more than 60 percent of the total population but according to Ferrell, Fraedrich &Ferrell (2010) only about 10 percent of women are allowed to occupy these top positions as managers or supervisors. It is also purported that the company’s labor relations does not consider disabled people and that has also made Samsung Company to spend so much money in court as damages and fines. On that note, however large the corporation is, it did not have any equipment or facilities to consider the disabled people e.g. computer aided software etc.

Samsung Management of its Labor Relation and Strategy for Negotiating Labor Agreement

Negotiating for a common agreement in the company would first require the negotiator to have an in-depth understanding of the problem at hand and thus know how to employ the strategy to be used and the bargaining factors. The problem facing Samsung is a known problem and it basically revolves around discrimination and low remuneration. The strategy to be employed here will be a continuous process of bargaining to arrive at a common agreement that will solve the problems at hand. First, the management should arrange an agreement venue in either one of its hall or boardroom where it will arrange a sitting of all the beard members and the workers representatives since not all employees can be accommodated in the negotiation meeting. The board members could also invite representatives from the national labor relations unit or even representatives from the human rights activists. All these members present in the agreement meeting will work out ways of ensuring that the problems faced by the company are solved using the best and cheapest resources so that the bargaining process does not turn out to be more expensive to the company than the problem itself.

Strategy in Communication

Meeting and negotiating is the better option for the company to communicate its strategies, the members in that meeting will have to decide the necessity of the agreement at hand, and why the agreement is really needed. These considerations will assist in coming up with the final agreement as all parties involved will have to explain why they want the agreement to be done. Then after they have brainstormed on why they are willing to reach at an agreement, then the entire team will try to consider all the requirements of each of them and bargain on what to take and what to ignore. Finally, the management and the other parties present in the agreement table will assess all the agreements and approve all that have been passed as the agreements to solve the discrimination as well as the incentive issues.

The Principle Economic and Administrative Issues Addressed during Bargaining

The bargaining process will be aimed at addressing the issues that management deems are bringing negative effects in the performance and growth of the company. Although the main problems to be addressed are not economic per se, their resulting effects are if left unattended may result to serious economic and administrative implications. For instance, the problem of little pay will make the employees to quit their job at Samsung to look for other companies, which have better incentive packages. Similarly, if the women and other minor groups of employees are discriminated upon, the resulting effect to that could be unsatisfied and unmotivated. According to Allen & Wilburn (2002), unsatisfied employees are unproductive and thus they cause the entire productivity of the company to go down. Therefore, these issues could as well be termed as economic issues. The bargaining would mainly be based on consent and satisfaction of all parties in the meeting and most importantly, a cost and time effective agreement that would harmonize all the parties involved. The administration issues to be covered in the bargaining will include; motivation of employees by offering better incentives, training of employees to ensure that they match with the company’s expectations, monitoring of employees in a justified manner to follow up on their plight and progress in the company etc. All the administrative issues would be addressed in efforts of minimizing conflicts between the employees and the management.

The best way to develop a bargaining position is to first consider all the complaints and disagreements of the other parties and maximize on their achievements by agreeing on them. After analyzing all the agreements and disagreements of these parties, the management should then seek a neutral ground at the same time considering its interest in the agreements. Therefore, the bargaining position would thus be fulfillment of all the requirements provided that the performance of the company will increase in the next three months with significant sales.

Weak Labor Relations of Samsung

The weak labor relations occur when the company fails to look at the interest of the employees. According to Van (2005), interest disputes mainly occur during settling of a dispute and in the bargaining process. An interest dispute occurs because one party in the resolution process wants their interests or recommendations to be given more consideration than the other recommendations from other parties. The most likely interest dispute to arise in the case of Samsung Company is increment of wages and salaries for the employees who are arguing that the wages offered by the company are less than those offered by other companies are. While the employees might maintain that they demand a salary increment up to a certain percentage, the management might argue that it offers a good and fair package as well as other incentives like allowances and bonuses, which are not offered by those other companies. That could lead to an interest dispute, as both parties want their own recommendations or interests to be considered.

Leverage of economic pressure on the other hand has been defined by Holley, Jennings & Wolters (2012) as showing the disputing teams what the economic outcomes of the disputes would be in case the dispute is not resolved. In this case, the interest dispute of wage and salary increment would cause the employees to go on strike, lay-off from work, or stage other demonstrations like sit-ins etc. In the perspective of Samsung, these are threats that would cause serious economic implication to the company if not addresses, thus they cause economic pressure. Nevertheless, that economic pressure could be leveraged to resolve the disputes at hand. The management could weigh the economic situation if the employees go on strike and estimate the costs that would be incurred and use that to consider the salary increment. Unionization in Labor-Management Relationships

According to Wheeler (2002), the future of labor-management is very complex due to the dynamic changes that are taking place in the companies today. The most outstanding and predictable step in the labor-management relations is the deunionization of the labor management. Deunionization is a term to refer to avoiding union membership or unions from taking over management of a company’s labor movement. This has already started to crop up in Samsung company but it is still in the mild stages where it is doing so informally. The next step will be to document that action and formalize and then the company would be known as a union free company. Wheeler (2002) argued that, “unions are obsolete and serve no function in a modern day economy.” This shows that managers today are not seeing the benefit of unionizing their companies and that trend is likely to go into the future as a union free labor movement for companies. The likely implication for this on a company like Samsung is that more employees will continue to suffer silently because their voices, which are often channeled through labor unions, will no longer be heard and the problem of labor relation will continue to affect the company.

Reasons why the Company is Successful

The company has been able build relationships connecting the management and unions so that it can be able to solve the labor disputes. The company understands the labor relation and whenever a dispute arises, it tries to solve the problem before it is too late. Even though it does not hold frequent meetings, it ensures that each employee knows what is expected of him or her and issues rewards to those who meet the target.

What needs to be done to improve the Labor Relations and Resolve Disputes

After the bargaining process, the management of Samsung will have to lay down clear policies and procedures to be followed in the present and the future to avoid such problems or any other of the similar effects from arising. These policies and procedures will be administered in the new labor contract to be established so that Samsung Company could be free from all these labor related problems. I would recommend the management of Samsung Company to stress the policies and procedures on the current situation that it is facing. For that purpose therefore I would recommend the following policies and procedures; first, set out clear channels for reporting of grievances and disputes in the company so that the management could know what is happening on the lower levels. Secondly, to report a dispute in the company, employees should fill an employment dispute form to make the dispute formal. This would release any unnecessary tensions and uprisings in the company. The management will look at the disputes and recommend the right way of solving it and the complaining employee will be expected to follow the proposed resolution plan. Thirdly, I would recommend the management to appoint or consult a professional in conflict resolution when faced with a complex situation. Finally, I would also recommend Samsung Company to hold frequent meetings with its employees so as to update each other of the progress of the company and more so the labor challenges facing them. These policies and procedures are to be included in the new labor contract and reviewed during any disputes arising in the company.

What needs to be done to ensure the company is successful

To increase the labor relations the company needs to engage the employees in the decision making of the company and inform them of the certain changes that might happen in the organization so that they can be aware in advance and accept the changes. In addition, Samsung should build relationships involving its management and the unions to ensure that the final motion of labor disputes are investigated.

Apple Inc.

The Apple Company is a worldwide company that strives so much to expand its market share through offering quality products and services to its customers. It is very crucial to note that, since the company’s inception, it has remained committed to be in good relationship with its employees as well as its customers, a factor that has contributed to its success in the present moment. However, the company faces a very stiff competition from its major rivals, Samsung and Nokia. The company is committed to be more innovative in future and is very much delighted to cooperate with other electronic companies so that they can conquer the global markets with combined strengths.

According to the data of the Apple Inc., the total number of supply chain workers was approximated to be 120,000 as at the year that ended in 2011. However, it is very clear that the figure does not account for the total number of employees across the world. This only represents a percentage that is slightly above 50% of all the company’s workers across the whole globe.  The Apple Company is the second largest information technology company by tax and it is ranked after Samsung Electronics. It mobile phone manufacturing potential is very great and it is thirdly ranked after Samsung and Nokia. The company is situated in the United States of America and it has 408 retail stores in 14 nations as well as online stores.

The Apple Company as at 2013 is the largest publicly traded corporation globally in terms of capitalization trends in the global markets. The company’s investment capacity in the global market is approximated to be US$415 billion. As at the year 2012, the company had 72,800 permanent employees and 3,300 casual employees across the whole world. According to the report that was released by Fortune in the year 2012, the company’s worldwide annual revenue was approximated to be around $156 billion (Joanna, 2013).

Recruiting and Selection Strategy

The talent assessment strategy is the best strategy that multinational companies and corporations should employ in hiring employees because it helps the company operate effectively by dominating the world markets hence expanding its market share. In employing the talent assessment strategy, the management of the company should be at a position to determine the right size of the recruiting team. The team should consist of personalities with unquestionable traits. The team should also understand the background as well as the rules and regulations that govern the ethical practices and morality as in the 1 Apple inc. (2012).

The management should be able to create an incentive plan for the recruiting team. The team that is to deal with hiring of the new employees should possess a well-formulated plan that should govern the conduct of the team. This should aim at recruiting the best man for the best job slogan strategy achievement. It is very clear that issues of racial discrimination normally come into play especially in the recruiting processes that are conducted by worldwide corporations. However, the recruiting team should understand that knowledge and experience is not selective in terms of the color of the skin. It is therefore very important that the recruiting team discharge their work according to the criteria that is set to guide the whole process rather than judging the competency of the candidates in terms of their skin color (Joanna, 2013).

The management team of the multinational company should also know that the recruiting team should also possess some talents. The very best talent that the recruiting team of the company should possess is based on their own integrity. Integrity in the sense that does the recruiting team respect all individuals that will present themselves for the interview irrespective of their political or regional divide and body color. The argument revolves around the issue of ethical standards and the rule of morality. It is therefore very important for the multinational companies to advertise for the positions that have felt vacant so that all the interested parties are given due time for consideration. This will promote transparency and accountability as well. This strategy will improve the product marketing principles hence expanding the profitability margin of the company.

In the adoption of the talent assessment strategy in recruiting employees, the management of the multinational company should consider some of the key competencies they need to build internally in order for the firm to move forward rather than backwards. The following are the capabilities that the recruiting companies need to maintain in order for them to effectively meet their organizational requirements: knowing where good candidates look for opportunities, looking referral networks for the qualified people, understanding the most cost-effective ways and places where most qualified people can be got, initiating a current marketing strategy like writing and painting advertising ads with the aim of attracting the attention of skilled people, scrutinizing all the candidate’s documents efficiently and effectively to determine their authenticity, conducting the preamble interviews, ordering the background checks and most importantly is maintaining a competent and reliable  hiring information systems (Kong, 2012). Compliance with all the afore-mentioned procedure will automatically help the Apple Company to effectively its organizational requirements hence competently operate in different nations of the world.

Training and Development Strategy

The best strategy that can help the Apple Company to effectively achieve its organizational requirement is the role-playing training and development strategy. This strategy contributes to the engagement of the members of the public who are potential customers. The sales, the customer service and repair personnel are regularly trained to know how to competently address the situations of customers that arises from time to time hence helps to build the trust between the global business organization and its customers (Apple report 2009).

In the role-playing training and development strategy, the senior most management plays the role of customers and therefore enlightens the employees on how to effectively interact with the customers and clients in the global markets. This is important because requires satisfaction of the services that are provided by the business ventures. This is only made possible through good customer-employee relationship. For example, if the company is creating a new policy that will affect the ability of a customer to return a product, the customer service representatives can role-play with managers to learn what to tell customers and how to answer customer questions. It is therefore very important to note that the role-playing training and development strategy plays a central role in ensuring that Apple Company and other multinational organizations effectively meet their organizational requirements.

Compensation Strategy

A sound and profitable compensation strategy is a strategy that is built on truth based on the progresses that the Apple company registers based on its profitability margin. A sound compensation strategy is formulated based on the following six steps: definition of the compensation philosophy, correlation the compensation in the entire strategy of the venture, create the culture to be dynamic and reinforce it with compensation, the best practices that bring forth good results should be rewarded, the organization should also think about the total compensation value and lastly, the management should determine the returns in respect to invested compensation payroll (Joanna, 2013).

The six steps will enable the global organization to effectively meet its organizational requirement in several diverse ways. In the definition of the philosophy, the sound compensation plan will be able to reflect the economic realities of the pricing structure and the market share of the Apple Company. This will enable the management of the organization to set a limit of the compensation based on the contribution of each individual employee hence instilling hard work and commitment in the heart of the employees thereby increasing the quality of products and services (Kong, 2012).

Following the six steps will enable the multinational company to foresee its future and provides several interventions that it should employ to realize its objectives. The sound compensation strategy is a very effective tool that is used to shape the actions of the employees hence making them to move in one particular direction. A company, which has adopted a sound compensation strategy, rewards the workers according to how much they have contributed positively to the development of the global business organization. This act helps to bring in new customers and clients for the organization, which help the organization to expand its market share hence maximizing its profit margin.

In respect to change of culture, a sound compensation strategy helps to increase productivity in various ways. One of the very best ways is that, as the employees are rewarded according to their contributions, there will be an instigation of morale hence promoting competition among employees themselves in terms of their work delivery and quality. It is very important to note that competition is very healthy in the field of business because to leads to the improvement of productivity, expansion of market shares as well as increasing the profit margin that comes because of increased customer base (Kong, 2012).

Cost behavior in Apple and Samsung

Apple Inc. manufactures and markets mobile media communication devices. The company has a fiscal year count of 52 to 53 weeks and for the current period it ended on the last Saturday of September. All the information on financial statement are presented in the form 10-k basing it on the company fiscal year. The company was incorporated in 1977 in California.

Whereas, Samsung electronics is one of the world largest semi manufacture of conductors. Samsung is the top South Koreans electronic company. Manufactures lots of consumer devises such as DVDs, digital TVs, computers and color monitors. Half of the company sales are anticipated to come from pacific Asian region.

The revenue that has been recognized by the company is inclusive of sales of hardware, software’s and other services. The sales prices for the items are either fixed or determined. Considering the revenue there is an increase by 30.8 percent from the previous years, which have led to an increase even on gross profits. The cost of sales increased by 26.7 percent but this followed due to the increase in sales. Gross profit increased with a margin of around 36.2 percent (Apple Inc, 2012).

Fairly, the account receivable amount increased as well rising by 51 percent. Moreover, the account payable on the other side had increment of 31 percent. Finally, the company inventories increased with a small margin of around 1.9 percent (Apple Inc, 2012).

The company recognized revenue is on fair value basis which is part of the receivables and revenue received from the sales of goods within the ordinary course of the firm activities. The total revenue indicated is on the net of value added tax, sale incentives, and after deduction of the company transactions (Samsung, 2012).

The revenue of Samsung has marked an increase from the previous years with a margin of 18 percent, whereas the gross profit margin had an increase of 29 percent on sales. The cost of sale for the company secured an increase margin with 11.5 percent. As well, the company level of inventories increased from the previous year with 11.4 percent. Moreover, there was an increase in net receivable amount to 9.5 percent. The net account receivable on the other look increased with a small margin of 0.00095 percent. Finally, the company net income had an increase margin of 42.3 percent (Samsung, 2012).

Note:  Apple Inc. has an indication that for the last one fiscal year it outperformed Samsung mainly due to the increased sales that led the company to attain a higher revenue margin.


The paper has revealed that how labor relation issues affect companies like Apple Inc. and Samsung and more so the costs that such companies pay for neglecting its employees and discriminating them. The main labor-issues facing Samsung are discrimination issues and incentive issues and the paper has shown how each affects Samsung. However, policies and procedures have been recommended for Samsung to follow to resolve the disputes that are facing it. The outstanding recommendation is to agree on a common ground by considering the interest from all parties involved. Similarly, economic pressure can be used to solve the disputes by weighing the costs of the threats and those of solving the disputes. Future steps for labor-management relations have been found to be deunionization of companies whereby more and more companies will withdraw from union organization, a step that is predicted to cause many disputes in the organizations.


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Appendix 1. Samsung Financial Summary for the Year Ended 2012 and 2011 (‘000’ USD)

2012                                    2011

Revenue                      =$201,103,613                                    165,001,771

Cost of sales                =$126,651,931                                    112,145,120

Gross profit margin     =$74,451,682                          52,856,651

Inventories                  =$17,747,413                          15,716,715

Net trade receivable    =$26,674,596                          24,153,028

Net account payables  =$16,669,350                          16,509,490

Net income                  =$23,845,285                          13,759,043


Appendix. II.  Financial Information of Apple Inc for the Year Ended 2012 And 2011 (millions of USD)

2012                           2011

Net sales                      =$156,508                   108,249

Cost of sale                 =$87,846                     64,431

Gross profit                 =$68,662                     43,818

Net account receivable =$10,930                   5,369

Inventories                  =$791                          776

Net account payable   =$21,175                     14,632

Net income      =          $41,733                       25,922







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