Corporate social responsibility refers to the self-integration of corporate institutions, including mobile phone companies such as Samsung, that are integrated into their core business model. The majority of consumers today expect a higher standard from corporations, especially as pertains to the products and services that they offer. Thus, a company ought to win the trust of customers to make them buy its products. Consumers usually have high expectations of companies and seek sustainable products. Therefore, companies should ensure safety and prevent social and environmental issues relating to the products that they produce and release to the market. Mobile companies should focus not only on making profits but also on the safety of customers, which is of paramount importance for their remarkable performance on the market.
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Samsung suffered a vast business scandal in the recent past, which resulted in the need to recall all the batteries of Samsung Galaxy Note 7. According to a technology safety analyst, it was estimated that the company would sell more than 15 million Samsung Galaxy Note 7 smartphones, thus outweighing the sales of Galaxy Note 5 model in the year 2015 (Eisler 2017, p. 372). However, this dream did not come true due to a huge setback when news about explosions of Samsung Galaxy Note 7 smartphones made the headlines. According to the information that was given by Samsung Electronics, they had tested over 200,000 Galaxy Note 7 smartphones and realized that there were some defects in two sets of batteries which had been manufactured by two different manufacturers.
The president of Samsung mobile division excluded the possibility that any other defect in either hardware or software of Galaxy Note 7 phone could lead to explosion. After the phone was reported exploding, the company ceased its production two months later after the launch (Eisler 2017, p. 372). Even though there was a high demand for the phone, the company decided to remove the smartphone from the market due to safety concerns relating battery issues. Consumers were asked to return the phones to the company because security and safety concerns affected even other areas, such as the airline industry. Thus, airline companies commenced being extra careful with passengers who use Samsung phone models after the phone exploded inside an aircraft and led to evacuation of passengers of Southwest Airlines. The returned phones were dumped, which produced tons of electronic waste that is detrimental to the environment.
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The airlines of Canada and the U.S banned transportation of the phones on their flights. The administration ordered passengers and pilots not to carry their Samsung Galaxy Note 7 phones on board. In addition, passengers flying from Canada and the United States or even within the two countries were not allowed to pack the phones in their checked bags (Pillot 2015). The shipping of the phones was also stopped, and they could not be transported as air cargo either. According to Air Canada, they introduced new regulations, and the directive on the ban of Samsung Galaxy Note 7 came into force immediately (Stephan 2017, p. 99). Passages who were carrying the phones were denied boarding the planes. Besides, a directive from the criminal investigation department alerted people that those found guilty of hiding Galaxy Note 7 phones in their bags could be subjected to criminal prosecution and other fines as carrying the phones in bags could increase potential risks in case of an explosion. In addition, the U.S Consumer Product Safety Commission alluded to about 100 reports that the phones were overheating. For instance, a family in St. Petersburg, Florida presented a report which indicated that their phone caught fire while they were charging it in their car.
The cofounder of the company producing the battery, Qichao Hu, claimed that the engineers who had worked on the battery had been forced to ensure that the battery separator is thin since the management wanted the phone to be slim and appealing. Some of the phones that had been recalled were using batteries which came from another supplier. They had defects that were associated with welding or lack of a protective tape. Samsung blamed explosions on the manufacturing failures (Stephan 2017, p. 99). Thus, even after the Japanese company Amperex Technologies Limited was chosen to produce new batteries for Galaxy Note 7, there were new explosions and a terrible failure on their part to make safe batteries.
The key factor leading to the scandal was the material used for the production of batteries. Thus, it was discovered that rechargeable lithium batteries are more susceptible to overheating than other types of batteries (Hartley 2017, p. 9). Furthermore, when these batteries are exposed to high temperatures, they suffer damage or cause manufacturing flaws. The batteries were large, did not fit well into the phones, and did not have enough insulating material. The batteries that were utilized in the Note 7 recall had damages on the upper corners, thin separators and high energy density, which led to the overheating of the phones (Hartley 2017, p. 9). There was not enough space to accommodate safety electrodes, which was another flaw in the phone.
Another situation factor that contributed to the scandal was the communication breakdown between the company, suppliers, quantity control and testing department, which should have acted jointly to remedy the situation. According to the Samsung Company, they are taking responsibility for their failure to identify and verify issues that were arising due to the design of the battery and its manufacturing. The company treated the situation as a good chance to make the safety measures stronger and safer by the use of lithium-ion batteries for a whole industry. The problem of battery explosions cost the company about $5.3 billion from early 2017 (Hartley 2017, p. 9). Besides, the company has been able to recall 3.06 million Note 7 phones, although a small percentage of the phones that were recalled were not returned. Currently, the company is working on resolving the mystery and releasing more Galaxy generations.
The policy that governs the CSR is built-in and regulates the company’s operation. It ensures that the company complies with the rule of law, ethics, and international requirements that govern the operation of similar companies (Strategic Risk 2016). Companies can ensure their responsibility while embracing and encouraging activities that have a positive impact on the environment. Ethical labor practices, the safety of users of the products manufactured by the company and volunteering are some of the important areas of CSR that are crucial in the society.
According to the head of Samsung mobile systems Koch Donjin, they had to make the decision of returning smartphones even though they understood that it would cost the company too much. He said that this step was necessary for the sake of the safety of customers that. Samsung arrived at the decision in order to review the whole system and assess the quality control (Kelsey 2016). As a result, certain improvements could be made to ensure that the customers feel safe while consuming the company’s products.
There were various people who were involved in the Samsung battery recall scandal. These include designers, manufacturers of both types of batteries, particularly SDI and ATL, and the customers, who felt a direct impact of the recall and illegalization of the devices. Thus, customers were not allowed to travel by air with the flawed phones. Airline companies were also affected by the scandal because there were cases when Samsung Galaxy Note 7 phones exploded in an aeroplane and people had to be evacuated, which caused disturbance and put the passengers at risk.
The company had plans to release Samsung Galaxy Note 7 with a smaller capacity of the battery, but they changed it. The manufacturers of the technology failed to consider all the possible risks of using the technology, which ultimately led to a big scandal. The companies were tasked with manufacturing batteries because they had been trusted by the company. However, they manufactured many batteries without considering the possibility of safety risks to the customers.
President DJ Koh agreed that the company was liable for the safety risks posed to the customers. Therefore, the company decided that it was crucial to ensure that the customers were compensated for the losses that they had suffered (Stanwick 2017). Pesident Koh aimed to preserve the image of the company and thus awarded compensation to all the customers that had suffered losses. In spite of the fact that the battery was recalled, the managers had a duty to ensures that they retain their customers through the use of ethical business management. The company was not ready to lose its authority and competitiveness in the market and a wide range of consumers.
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The culture of the company played a crucial role in ensuring that they settle the conflict. The organization laid focus on solidarity of employees, which enabled them to overcome the battery recall scandal. The company recognized the mistakes that they had made, apologized to the customers and compensated for their losses. Hence, Samsung corrected the mistakes that it had made even though the cost of battery recall was very high and affected the company’s returns for some time.
There are many ways that the company utilized to solve the issue of battery recall. For instance, Samsung stopped using exchange of batteries from other companies and started installing black labels on their packages. The move to recall all Samsung Galaxy Note 7 batteries was painful, but it helped to save the image of the company as the issue changed the perception of only one specific product rather than a whole range of the company’s products (Pillot 2015). This helped the company to continue enjoying market competitiveness and retain its consumers after the scandal. This approach assisted in ensuring that the brand power remained unchanged and the consumers concentrated on former rewards.
Additionally, Samsung should take measures to prevent future scandals. Ensuring that the reasons that led to the scandal are identified will help to prevent similar scandals in the future and avoid losses that were incurred by the Samsung battery recall. The main reason why engineers put accessories closely parked was the desire to attain a stylish slim body of the phone, which resulted in much pressure on the battery even though it had been placed in a different compartment. It is necessary to consider providing more space for the battery owing to the fact that whenever the battery charges, it increases in size. This fact necessitates space allowance of about 10%, which can allow batter expansion without causing any havoc. The thickness of the shell can also be increased. The reason which led to the recall of the battery was focusing on the design at the expense of the technology issues that had to be considered when assembling the battery.
The scandal can help to ensure that similar situations do not repeate in the future. Thus, when releasing a new product, risk assessment should be done and contingency plans should be devised so that the risk can be managed before it gets worse (Pillot 2015). Precautionary steps ought to be taken to ensure that the company is ready to respond to any emergencies. Research on the risks will ensure that the company can respond promptly to situations of emergency. The employees also need to have specific responsibilities to avoid possible dismissal and to ensure that the risk management of the company is improved. Therefore, when the company plans to launch a new product or use new technology, it must ensure the safety of the customer, which is fundamental and cannot be underestimated.
In conclusion, when launching a new technological product into the market, a company needs to ensure that it has complied with all the safety measures. Besides, the management should be able to foretell impending risks and be able to prevent them. The Samsung Company should improve the safety of all its appliances as it has already suffered a blow on the market. It should be extra careful, especially in terms of policy formulation and implementation of safety measures, and be able to prevent occurrences that may hurt its profit margins and reputation.