Ethics and Organizational Effectiveness
The report brings about the discussion of the multinational enterprises and the case study analysis of the company “Samsung” . The purpose of the report clearly defines the inclusion of the management theories and practices in the context of the organisations. One of the common practices affecting the organisational effectiveness and performance includes an approach to the ethical conduct. It defines about the ethics and ethical principles followed in the organisation, to ensure long-term survival and success, in the industry. Ethics define the ways and practices which are the standards stated by the company towards their employees, customers and the other stakeholders. Acting in an ethical manner describes about the behaviour that is acceptable for both the company as well as the society (Yun et.al, 2018).
Ethical behaviour or ethical code of conduct is good for every business organisations, and it accepts the important moral principles, which includes honesty, fairness, equality, dignity, and the integrity of the diverse employees in the organisation. The case study analysis has carried out in the report, of “Samsung Galaxy Note 7.” The application of the management theories and other aspects has taken with respect to the company and the case study chosen (Crane & Matten, 2016).
One of the notable and the most successful company, Samsung is a South-Korean based company, one of the largest producers of the electronic products. Samsung founded by the Lee Byung-chul in the year 1938, as a trading business company. After the establishment over next three decades, the Samsung group diversified the operations into areas like food, textile, insurance, securities, and the retail sector. The company is headquartered in Samsung town, Seoul Korea, and it includes numerous business affiliated, and most of them are included under the name of Samsung brand (Samsung Newsroom, 2017).
Samsung has been specialising over years in the production of a wide variety of the consumer and the electronic products. The major products include appliances, media devices, semi-conductors, memory chips, and the other systems. The case study taken for the analysis discusses about the ‘Samsung Galaxy Note7”, that was titled as “Samsung’s Exploding Note 7: A Case study in how not to release a smartphone”. The smartphone has been now discontinued which was produced and marketed by the Samsung electronics, due to numerous issues. Note 7, was officially launched on 19th august, 2016, as the successor to the Galaxy Note 5. This smartphone was the first the Samsung’s first variant with the symmetrical order and the last in the series of Galaxy Note with the option of the home button (Hartley, 2017).
Case Study Overview (Samsung Galaxy Note 7)
The Galaxy Note7 was the evolution of the note 5, as it consist the hardware components and improvements from the Galaxy S7. Considering the introduction of the note 7, at the time of the launch or the release of the smartphone, the demand was high in South Korea. It also delayed the international release of the phone due to the shortage in the supply. The Galaxy Note ‘7’ was in the category of the phones that received positive reviews and response from their critics, who praised about the quality of the construction and HDR support of the phone (Arya & Verma, 2018).
Galaxy note, after a positive feedback and high demand in the market, brought about a drastic change in the sale of the smartphone. The crisis of the Galaxy Note 7 considered the fact that the company Samsung suspended the sales of the note 7 on 2nd September 2016. After this, an informal call was announced on discovering a manufacturing defect in the smartphone. The defect in the manufacture of the Note 7 batteries, led to the generation of the excessive heat resulting into fires. Then, Samsung exchanged about the defected phones with the issues in their batteries for a new revision that included the resourcing of the batteries from a different supplier. On 11th October 2016, the company ceased the production of the Galaxy Note 7 on permanent basis. Due to the continuous battery faults in the Note 7, Samsung discontinued the production, as these issues observed repeatedly (All techs considered, 2016).
Samsung galaxy note 7, released on 19th august, 2016 has now been discontinued for the production, due to the issues related to the manufacturing defect in the batteries. Despite the special features and extra-ordinary qualities, the smartphone resulted into a big crisis, which hampered the sales of the company. Samsung Galaxy special features included a number of things which defines about the positive feedback and response received by the company. As per the negative change of the decreasing sales, which later on resulted into permanent, abandon of the model, there were few things mentioned by the Samsung officials, which described in a detail much about the crisis. Samsung officials stated that the battery of the smartphone was designed and manufactured from the different companies, in a different manner. The reason for the failure of these batteries was different from each other, and the reason identified by the Samsung , was that the fires has been caused due to the defects in the batteries which led to the short-circuits disturbing the performance (Harding, 2016).
Analysis of the Case Study
In a broader sense, the analysis of the case study states about the newsletter, dated back in the later weeks of September 2016, Samsung announced about the improved and updated Galaxy Note 7 replacement smartphones on the date 21st September 2016. The action directed towards those who were participating in the exchange program process of the smartphone. According to the estimation, it was found that almost 500,000 phones or Note 7 was available for the exchange process. It was also stated that after an exchange program, the new phones will be equipped by a special feature showing a green light, which will indicate that the phone is now safe to use , and the issues related to the batteries has been resolved (Park & Lee, 2015).
After the exchange and the replacement process, of the Note 7, even in the early October some issues found, even on the ‘new and safe’ Note 7. Then the company called to extend the status of their original recall and the exchange program with the new or the replaced Galaxy Note 7’s. Even after such replacements and exchange of the device, there were issues which are described in a better way in the below paragraph, which analyses the case study in an optimum manner (Loveridge et al., 2018).
According to the words of the President of the Samsung Electronics America, Tim Baxter, it was mentioned, “The galaxy note 7 is the best phone we have ever built, and it is made even better by the ecosystem of the Samsung devices that enhance it”. The public response for the Samsung Galaxy Note 7 was ‘Too hot to handle’. The company received a backlash from all the social media platforms, about their smoking and defective phones. The issue covered through the crisis, was used by all the media platforms to make their customers and other important public aware of the issue. As the company, Samsung published a research report claiming that the batteries were at the fault. The first explosion was reported in South Asia and on the same day in China. The public complaints were high which included the reactions of anger, disappointment, and losing trust, and loss of the loyal customers (Yun & Kim, 2016).
The crisis of the Galaxy Note 7 was identified by the number of issues that included the defected battery of the Samsung devices, which further led to the major issues or problems. It included the effect on the many of the note 7 units due to overheating, combust and the explosion. This led to the discontinuation of the note 7 devices from that time, due to these repeated incidents. In the beginning, of the issues at the time of original run of devices, when the note 7 first released in the market, which was manufactured by the subsidiary of Samsung. The particular situation of these batteries leading to the separation of the positive and negative tabs of the battery resulting in thermal runaway, and short-circuits (Wu et.al, 2018).
Issues in the Smartphone
Followed by the official recall on the 12th September 2016, the note 7 was then re-versioned using the batteries from a third-party supplier. The company mentioned on the 23rd January 2017, that these batteries faced the problem of defect was due to the fault in the manufacturing of the wielding process. The initial reports were given by Samsung, which included the delayed shipment of the Galaxy note 7 and then the discontinuation of the device after the recall by the company for the battery (Tan et.al, 2018, July).
In the month of October 2016, there were several incidents notes even after the replacement still suffered from the battery failure and combustion issues. Therefore, there were some issues regarding the device even after the replacement of the note 7. The new and fresh devices also faced problems, which then called subsequent recalls and then final discontinuation. Thus, it was analysed that there were number of the issues that disturbed the functioning of the device, making the customers of the Samsung, to complain or switch to other products or brand. Therefore, the issues and the management of the company linked to some of the management theories, which are described below (Dalton, 2017).
The management theories defined in the context of the organisations, which guides the supervisors and the managers in an organisation to follow up the ethics, fulfilling their responsibilities and the attainment of their goals and objectives in the long-term. Therefore, there are four management theories, which can be applied with respect to the company, Samsung, and the operations carried out in the organisation. The management theories include scientific management theory, bureaucratic management theory, human relations theory, and the systems theory. One of the most important and crucial aspects of these theories include the “approach to the ethical conduct”. The concept of ethics and the ethical management in any organisation is essential and significantly affects the smooth functioning as well as the effectiveness of the organisation in the long-run (Bratton & Gold, 2017).
Samsung adopted fair and transparent corporate culture, following the ethical code of conduct, which established it amongst the largest producers of electronic products. As the company spans across many different countries around the globe, therefore it recognizes and accepts the laws, regulations and practices in their operations; conducting their business in lawful and ethical manner. The company also developed the global data security policies to keep the confidentiality of the data of their customers and the employees working in the organisation. To manage the compliance and the ethical risks are followed by the Samsung code of conduct, also it included compliance with the Business conduct guidelines which states about taking action and the value judgement by their employees (Samsung, 2018).
Battery Faults
The company through their ethics management website, disclosed their Global Code of Conduct, i.e. Samsung Business principles, to their suppliers, customers, or the other key stakeholders. It states about the compliance and the violation of the defined ethical standards. The organisation focused upon ensuring that all the Samsung electro-mechanics and the executives are given the anti-corruption training and education, which enables them to identify and improve vulnerabilities in the organisation processes (Marin, Mitchell & Lee, 2015).
In the case of the ‘Galaxy Note 7’, there were two approaches were followed, which ensured upon following the ethics and taking action to improve the situation of loss. The approach of individualism and utilitarianism were followed. It was stated, according to the individualist approach that the owners behaved in the ethical manner in organisation. According to modern individualist, Samsung adopted the ethical system and focused on not sending the replacement phones again as it would hurt and make their relationships with their customer’s unhealthy (Lee et.al, 2015).
On the other hand, the utilitarianism approach stated that it was unethical, as they faced the consequences because of the Samsung’s mistakes and the lack of awareness. Samsung put more attention to the deadline of the product launch rather than the safety and the satisfaction of their stakeholders; therefore, they violated the ethics, in their operations (Choi et.al, 2018).
The other three theories included Bureaucratic management theory, which focused, upon the clear designation of the roles of their employees and the management, based on the hierarchy and the management defining who is supposed to do what work and in what manner. The human relations theory focused the shift in the management of the organisations to the human-centred approach that focuses on identifying the capacities of the individuals and acting autonomously and creatively (Vu, Abel & Morizet-Mahoudeaux, 2015).
It emphasized on the alignment of the potential of the employees with the needs of the organisation. The system theory is the holistic approach to ensure the work and the processes carried out in the proper systematic manner. The approach focuses on the organisation as a whole, included identifying the functional elements to achieve organisational goals and objectives. These all theories are effectively implemented by the diversified functions of the Samsung (Shafritz, Ott & Jang, 2015).
Conclusion
To conclude the overall assessment of the report that focused upon the Samsung’s effectiveness and the performance, with respect to the case study there were number of things were discovered during the analysis. Samsung is considered as one of the largest producers of the electronic devices, in the industry with the larger market share.
It has been analysed from the report about Samsung’s Galaxy Note 7 Crisis, that the phone depicted the manufacturing defect, which led to the subsequent recalls of the note 7. The analysis also included the note 7, issues in the batteries even after the replacement or exchange program processes. Thus, Samsung made several recalls and strategies to improve the situation, but even then, there were manufacturing defects in their device.
Samsung is in a curious position, that determines about the strategies and plans carried out by the performance of their operations. The future scope or the mission of the Samsung focuses upon satisfying their customers worldwide, and improving the work practices, and the achievement of goals and objectives.
It can be recommended or suggested from the case study analysis , of the Galaxy Note 7, that despite the number of trials and recalls, the phone faced discontinuation , therefore the company should focus on initiating new strategies and plans, towards ensuring the safety and good of their employees as well as the customers. They should have proper check, testing and examining the quality before the launch of the product in the market, keeping the goals and needs of their customers aligned.
References
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