The concept of Multinational Corporation emerged after the Second World War when the need for peace and unity was accentuated by many diplomats and humanitarian associations (Bierstaker et al., 2011). Many scholars have expounded that multinational corporations are the characteristic of social institutions in contemporary societies. The diplomats were referring to both quantitative importance, prosperity, and productivity; therefore, determining the economies of the concerned countries. The multinational corporations are also important because they provide solutions to social problems and promote peace and unity in the world. Large corporations contribute to the emergence of the integrated industrial units that lead to big business enterprises and the social reality of western culture (Bierstaker et al., 2011). Currently, the power of multinational corporations exceeds that of the national governments because it involves an integration of multiple jurisdictions in the world. Multinational corporations are also powerful because they do not represent the modern capitalism; therefore, ensuring economic development in all parts of the world.
Many diplomats and political scientists have established the relationship between multinational corporations with the development of effective political organizations and judicial systems in the world. The formation of large corporations is also power over governmental authorities because they help in the identification of appropriate strategies to be used in conflict resolution processes. This paper will expound on how multinational corporations affect leadership through the ability to break territorial bounds in the political systems. The concept of Multinational Corporation has received criticism from many capitalists who are interested in their gains on the expense of other people. The relations between national jurisdictions and multinational corporations are usually prone to conflicts due to poor leadership skills and corruptions in most developed countries (Bierstaker et al., 2011). Business companies determine are essential in determining the nature of interactions between people from different geographical location. Samsung is one of the multinational corporations that have determined the levels of economic growth in many countries. This provides a critical analysis of how Samsung has shaped the economy of South Korea. The discussion is based on the case study in which one of the influential leaders is arrested due to his corrupt operations.
Operations of Samsung Corporation in the Republic of South Korea
In March 1994, Chaebol separated from the Samsung groups and became an independent business company (Jung et al., 2011). Samsung Corporation ventured into the retail business after separating with Chaebol group. Other corporations started were under pressure that their business activities will decline when after the Samsung Corporation engaging in retail business in the country. Samsung Corporation was so competitive in the market due to its stable capital and effective management skills. Samsung Corporation operates in most of the important electronic devices in South Korea and other parts of the world. Samsung also provides job opportunities to the increasing Korean population; therefore, improving the economy of the country and cumulative increment in the gross domestic product (GDP) per capita (Bierstaker et al., 2011). Opening of three different Samsung branches undermined its business activities because the managerial approaches were also changed to accommodate the operations of the established branches.
The separation of Chaebol and creation of the three branches from the Samsung Corporation resulted in a serious financial crisis in the organization. Samsung Corporation had to established appropriate strategies to overcome the financial crisis and embark on its serious business operations (Jung et al., 2011). some of the strategies applied by the Samsung Corporation to restructure its business was downsizing of the organization and using different marketing strategies to attract many customers in the global markets. according to the views of most of the political scientists, multinational corporations were eliminated from operating within the South Korean territories because the country had a historical believe that foreign powers should not be wholly trusted. The failure to wholly trust the foreign corporations resulted from the concerns of the World Wars and the Cold War.
Private businesses are operated differently as compared to state-owned enterprises. South Korean government have the powers to select and determine the right corporation to engage in joint business activities or partnership together. The sovereignty of the people also drives the government the effective policies and strategies that can be used to improve the economy of the country. Some of the small corporations were eliminated from the partnership with the government because of their financial instabilities. Samsung is one of the multinational corporations that were selected and engage in a partnership with the Korean government due to their stable financial record a d effective management skills. President Park's administration selected Samsung Corporation for partnership because the company dominates the Korean markets and the ability to contribute a lot of products for Korean exports. The negative diplomatic attitudes developed by South Korea resulted from the historical relationships with China and Japan. The South Korean interest to multinational corporations was much little as compared to the Brazilian and Mexican desires for partnership with the Multinational corporations. Samsung Corporation enjoys total collaboration with the Latin American countries unlike in South Korea.
Samsung Corporation had to engage in production practices that benefit both the country and the stakeholders to win the trust of the South Korean government and citizens. I order to control the business activities in the country and achieve control over the South Korean government, Samsung decided to apply appropriate strategies and business policies. One of the strategies used by Samsung Corporation to achieve attain effective business in the country and improve its sales was engaging in serious partnership with the government. The partnership provided a competitive advantage to Samsung Corporation over other companies. Samsung was allowed to supply most of the electronics for the government to improve the quality of services delivered to South Korean citizens. Secondly, Samsung Corporation analyzed the effects of the Korean Civil wars on the economy of South Korean. The analysis of the post-civil war issues provided an insight into how Samsung will collaborate with the South Korean government.
Thirdly, Samsung Corporation will gain control of the South Korean economy by providing loans and financial support to important governmental activities. The Government and its citizens will develop trust in the organization due to its contributions to the development of the national economy. Additionally, the Samsung Company should avoid monopoly as a way of preventing customer exploitation. Samsung is a multinational corporation that shuns corruption and promotes the development of good leadership skills to achieve economic growth. In the case scenario, corruption is the main issue that affected the relationship between Samsung Corporation and South Korean government one of the leaders was engaged in bribery.
How the Operations of Samsung Corporation determine the GDP of the South Korean Economy
Samsung Corporation introduced a ten-year strategy that emphasized to improve economic growth in the country. The announced growth strategy involved five business operations. Productive outcomes were achieved other the application of the growth strategy in South Korea when Samsung Corporation increased its sales. Samsung Corporation was the leading multinational corporation in the manufacture and sale of mobile phones and other electrical devices in South Korea. The dominance of the Samsung Corporation in the sale of electronic devices increased government revenues. The dominance of the company in the market places accounts for 22% of the total South Korean exports (Heo & Roehrig, 2010). The increased percentage of exports improves the GDP of South Korea. Samsung also provides job opportunities for the growing South Korean population. The scandals tied to Samsung Corporation affected the economy of the country because the South Korean government have been depending on products from the company for export.
Samsung has been facing serious competitions from other est6ablished companies like Apple Inc. and Nokia Company. The competition reduces the productive dominance of the Samsung Corporation. The dominance of the Samsung Corporation is inevitable because the company is supported by the Korean government for its productive partnerships. Samsung Corporation has power over the South Korean government because it leads to the percentage of the market capitalization as compared to other multinational corporations operating in the country. Samsung SDI is leading in the South Korean stock-exchange (Heo & Roehrig, 2010). the company also accounts for the economic growth in South Korea because it also provides some important services like fixing of cathode-ray tubes on televisions and other related devices. Samsung also manufactures lithium barriers that are used for automatic vehicles like BMW. Conviction and imprisonment of the Samsung Billionaires affect the economic growth of the country; therefore, the corporation of powerful than the South Korean government.
Why Samsung Corporation have Power over the South Korean Government
Multinational corporations are important because they promote unity and collaboration among different countries in the world. The ability of the corporations to operate in many countries improves their management skills; therefore, enabling quality relations from the interactions of many people. Samsung has power over the national government of South Korea due to various factors relating to the dominance of the corporation in the market and the financial stability of Samsung Corporation. Most of the CEOs from Samsung Corporation have been bribing the South Korean Presidents to get the government's support in their operations. The ability of the CEOs to bribe the country's president is a clear indication that the developed multinational corporations are powerful than the government of South Korea.
The scandals of Chaebol affects the economy of the country because the group emerged from Samsung Corporation that determines the exports of the country (Keum, 2018). Samsung also produces products that are greatly consumed by the local people; therefore, contributing to the national GDP of South Korea. A chaebol is a business grouped owned by multiple families that have subsidiaries in many industries in the country. Chaebol has been relying on cooperation with the national government to achieve their business success. The Chaebol determines the economy of South Korea because it provides loans, subsidies, and loans that improve the national revenue in the country; therefore, making the multinational corporations powerful than the South Korean economy (Keum, 2018). A chaebol is one of the Samsung affiliates that make a lot of profits in South Korea. Samsung is owned by third-generation members Lee family. According to Forbes, the Lee family is the second-wealthiest family in Asia. Samsung has diversified its products and services in South Korea. Samsung Corporation deals with insurance services, manufacturing of ships, luxury hotels, making of ele...
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