Biz groups should learn from Samsung Techwin

SEOUL, June 9 (Yonhap) -- Lee Kun-hee, South Korea's top tycoon who runs the Samsung Group, said Thursday he is worried that corruption and irregularities are widespread within the conglomerate, just one day after he vented anger at alleged irregularities found at one of his group's affiliates that makes defense and precision machineries.
Details of the irregularities found at Samsung Techwin Co. were unknown but its chief executive resigned, taking responsibility for "improper behaviors" committed by his employees that were divulged in an internal audit.
"Samsung Techwin was a coincidence (that irregularities were found). It seems that corruption is widespread in all Samsung affiliates," Lee told reporters as he arrived at his office in southern Seoul.
"Samsung's clean corporate culture has been tarnished," said Lee, whose group includes the global tech behemoth Samsung Electronics Co. "Irregularities should be rooted out."
Lee's remarks came as a shock, because the group has boasted of its clean corporate culture. Since Samsung Group has been known for its tough and intensive internal audits, many suspect that similar levels of corruption and irregularities can be found in other business groups as well.
It's common practices that executives use corporate credit cards for private purposes such as dining with their family members or open for free golf, drinks and other entertainments and even for an offer of cash gifts and other valuables from their contractors or companies with which they have business ties.
Such personal irregularities jack up companies' expenses and production costs and eventually weaken their competitiveness in an era of ever intensifying global competition.
Such irregularities should not be regarded as personal wrongdoings but would rather be handled as something really bad that undermines the long-term survival of the companies involved. As most of such irregularities occur in sections that handle the purchases of parts and materials and services from contractors, they could have chain effects on smaller contractors and suppliers.
Contractors and suppliers who have to treat dearly those who buy their poroducts cannot devote themselves to enhancing the quality and technology of their products.
All industries, business groups in particular, should take the Samsung case as a valuable lesson and eradicate internal corruption and irregulaties.