MAIN ISSUES
Samsung’s Founder Grandson Scandal
The company has faced some issues in the international business process. It seems interesting to examine these issues and evaluate the pertinent strategies for better solutions. The company intends to solve these issues effectively. The grandson of the founder of the Samsung Company was arrested. Interestingly, He was accused of different briber, corruption and other charges. Lee Jae-Yong gave donations to different nonprofit organizations to gain government favors. Unfortunately, Lee Jae-Yong was unable to contain the moral authority in the company. It has become the major issue in this company. Winning government support is good for the company. However, it should be done ethically. The company gave 20.4bnwon to foundations. However, after the revelation of this scandal, he still denies any favor in return. The arrest of the founder’s grandson is a big blow for the company that can hit the short and long-term production along with other financial implications (BBC.com). Interestingly, the grandson of the founder of this company used his power to gain personal benefits. All key stakeholders are not considered in the decision-making process. Thus, this issue has created many question marks on the role of Lee Jae-Yong (Ricker)
THE ISSUE WITH THE CELL PHONE BATTERIES EXPLODING
The issue with the cell phone batteries exploding indicates some manufacturing or production implications. Note 7 batteries are exploding, and it is creating frustration among customers around the globe. For Instance, Samsung is using irregularly size batteries in Smartphone that cause extra heat. Samsung Company is depending on its subsidiary, Samsung SDI, which is making batteries for phones. These batteries are not fitted for different Android phones. Unfortunately, this issue has changed the perception of customers, as they are moving towards different alternatives in the competitive mobile phone market (Swider). The quality has been compromised due to much creativity. The design has become controversial for both customers and the company. Therefore, people prefer different alternatives (Moynihan).
PRIMARY CAUSES
The primary causes of the first issue are the political gains and government support. It is a fact that the companies restructure the whole process in different regions. Giving donations to controversial non-profit organizations could provide huge government support. It was the unethical way to get the business benefits that led towards the stakeholder dissatisfaction.
A possible cause for the second issue is the quality of the production process. The company is depending on its subsidiary. There are not effective quality measures for the subsidiary. Thus, the company did not expect this issue. On the other hand, manufacturing issues such as missing sharp edge protrusions and insulation tape are other causes of the explosion. The company has recalled and reissued cell phones to fix the issue.
ADDITIONAL FACTORS AFFECTED THE SITUATION
Due to these issues, there are some factors, which have been triggered prominently. For Instance, due to the battery issue, sales of Smartphone declined in the competitive mobile phone market. The company tried to give some clarifications in different press releases. However, it puts a dent in the sales and revenues. It changes the perception of customers, as people were unsafe when using mobile phones. The bribery scandal of the founder’s grandson impaired the reputation of the company, and it may take time to regain the trust of stakeholders. The situation was getting worse for the company. In the competitive technology market, people like to have high-quality products. Samsung customers were finding products unsafe, and they were converted. It was a huge factor, as the firm was losing the competitive advantage.
SOLUTIONS TO PROBLEMS
Accountability
To solve the first issue, the company has introduced an effective corporate policy. The leadership team is accountable or answerable to all key stakeholders of what he does or intends to do in the business process. Bringing accountability back is the pertinent solution to this issue. There are some culprits in the company, which can break the stakeholder trust and take unethical action. Along with the establishment of the ethical culture, each person, including the leadership team, is to be accountable. After implementing the solution, the cases of bribery and immoral business considerations have been reduced (Fifield).
Competitive Strategy
The solution to the second issue is to make a competitive strategy, as far as the manufacturing process of the company is concerned. For Instance, the company has to recreate the quality measures in the manufacturing process. It can enable the safe and secure product for people. Making the new quality measures in an innovative culture is a good move by the company that can enrich people’s trust. Amusingly, it seems like a competitive strategy by the company that can augment the visibility of sustainable product quality (Eadicisso).
WAS THE BUSINESS SUCCESSFUL IN SOLVING THE PROBLEM?
The business was successful in solving these problems. Samsung Company is capable of adopting new business and manufacturing trends. The change management team of the company is quite effective and sharp that led towards the successful implementation. The company intends to behave ethically in the international markets and design some sustainable products for customers around the globe.
Work Cited
BBC.com. “Samsung heir Lee Jae-yong arrested in South Korea.” BBC. BBC, 17 February 2017. Web. 7 September 2018. https://www.bbc.com/news/world-asia-38997370.
Eadicisso, Lisa. “This Is Samsung’s Plan To End its Exploding Smartphone Problem.” Times. Times, 23 January 2017. Web. 7 September 2018. http://time.com/4643296/samsung-galaxy-note-7-recall-battery/.
Fifield, Anna. “Samsung Group’s heir Lee Jae-young sentenced to five years in corruption case.” Washington Post. Washington Post, 25 August 2017. Web. 7 September 2018. https://www.washingtonpost.com/world/samsungs-heir-apparent-found-guilty-of-corruption-sentenced-to-five-years-in-jail/2017/08/25/03a71976-894e-11e7-9ce7-9e175d8953fa_story.html?noredirect=on.
Moynihan, Tim. “Samsung Finally Reveals Why The Note 7 Kept Exploding.” Wired. Wired, 22 January 2017. Web. 10 September 2018. https://www.wired.com/2017/01/why-the-samsung-galaxy-note-7-kept-exploding/.
Ricker, Thomas. “Samsung heir found guilty of perjury, embezzlement, bribery.” The Verge. The Verge, 25 August 2017. web. 10 September 2018. https://www.theverge.com/2017/8/25/16201360/samsung-lee-jae-yong-guilty.
Swider, Matt. “Here’s why the Samsung Galaxy Note 7 batteries caught fire and exploded.” Techradar. Techradar, 23 January 2017. Web. 7 September 2018. https://www.techradar.com/news/samsung-galaxy-note-7-battery-fires-heres-why-they-exploded.
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