Samsung, Shame, and Corporate Atonement

South Korean political leaders are more determined than ever to correct the country’s reputation for being too lenient on the country’s family-controlled business dynasties known as chaebol. The winner of South Korea’s presidential election, Moon Jae-in, is coming to power in the wake of a corruption scandal that ousted President Park Geun-hye. Her impeachment followed the arrest of Samsung’s de facto leader Lee Jae-yong on bribery charges. Samsung’s path to repairing its damaged reputation is different than if it were based in a Western country. The hidden rules of redemption differ across cultures. In guilt cultures, which exist generally in Western countries, redemption derives from executives serving jail time and company fines and settlements. But in a shame culture such as Korea’s where the public decides what is right, global companies are much more vulnerable. Global firms often fail to manage such crises because they focus on proving innocence. Samsung fundamentally needs actively accept moral and social responsibility. Now is the time for the executives’ culture of loyalty to the “family” to be replaced by a culture of loyalty to the “organization.”