Samsung Electronics Recalls as a Business Issue

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Not so long ago, Samsung Electronics faced a crucial to their business issue, in the framework of which the company had to recall the whole product line twice. Needless to say that such a solution turned out to be extremely expensive and affected clients’ perception of Samsung Electronics adversely. The company lost more than $5 billion, so enormous attention was paid to the problem. Some of Note 7 products exploded and hurt their owners. Moreover, professionals who investigated this issue claimed that other devices of this type could unexpectedly explode as well.

Months of thorough work proved that the root causes were “design and manufacturing flaws associated with the lithium-ion batteries used in the phones, which were produced by Samsung’s battery suppliers” (Baig 2017, para. 1). These drawbacks were associated with two suppliers who were believed to be Samsung SDI and ATL. The batteries used in these devices were made from different materials that were not discussed along with other requirements.

The suppliers of Battery A failed to ensure enough space for electrodes, while the suppliers of Battery B committed an abnormal welding process and the absence of the isolation tape in some devices. As initially, the problem occurred only with Battery A, Samsung decided to change these phones for those with Battery B, which proves that they did not realize the necessity to check the parts provided by suppliers even after the incident. Thus, the absence of a timely safety check turned into another issue that affected the final quality of Note 7. In this way, even though the company put particular demands on suppliers, it did not ensure that they were met.

All in all, it can be stated that if Samsung Electronics improved its communication with suppliers, it could have avoided the occurrence of issues related to a battery explosion. Ineffective communication, in this situation, impacted both the quality of the product and the company’s performance. It prevented Samsung Electronics from receiving extended information regarding the product that was supplied, reduced checking options, and worsened the overall quality of a phone in this way.

Gambetti and Giovanardi (2013) state that communication is vital for successful cooperation between the parties of a supply chain. They emphasize the fact that it allows spreading values and increasing intellectual capital within an organization. As a result, the quality of provided services and products is expected to enhance. Proper communication between the members of a supply chain improves competitive performance dimensions.

It ensures the high quality of products, their timely provision, and practices alignment. Having homogenous values, a buyer and supplier are likely to have similar views towards a product, which makes it easier to meet demands. In addition to that, effective communication ensures that parties can clearly state the scope of their demands and opportunities. They can share detailed information that includes all those product peculiarities that can potentially affect their characteristics.

According to Jiang, Henneberg, and Naudé (2012), relations between a buyer and a supplier are to develop on the basis of mutual trust and dependence. Professionals believe that these two parties tend to work better if they realize that their actions can affect those they cooperate with, as well as the final quality of a product. However, it is significant to remember that interpersonal relations should not affect business ones adversely.

Even though they tend to make a company and its supplier understand one another better, it is significant to ensure that their business operations are not based only on trust. Standard tests and assessments should be used to make sure that all the demands are met, and a product is of high quality. In fact, interpersonal communication and trust that is revealed as a part of them are expected to increase the quality of product or service, providing buyers and their suppliers with an opportunity to share values and code of conduct. They enhance the efficiency and effectiveness of information exchanges but do not cancel any checking procedures.

Finally, Yam and Chan (2015) believe that knowledge sharing is vital for cooperating organizations because it provides them with a range of additional opportunities. They emphasize that a buyer-supplier collaboration can be improved as well as manufacturability if unique difficulties are considered along with commitment and trust between the partners. Realizing that they all are responsible for a product and issues related to it, they are expected to recheck everything several times.

Taking into consideration the information discussed previously, it can be recommended for Samsung Electronics to improve its communication with suppliers in order to obtain an opportunity to deliver higher quality products to clients. The company should share its values and main concerns with the other parties of its supply chain so that they share them and take into consideration when providing services. An assessment guideline should be developed to check the quality of products on a routines basis.

More attention should be paid to the characteristics of the received products. If the company faces quality issues once, it should recheck other products as well to ensure that no problems will be observed further.

Reference List

Baig, E 2017, Samsung reveals cause of exploding Note 7 cellphones. Web.

Gambetti, R & Giovanardi, M 2013, ‘Re-visiting the supply chain: a communication perspective’, Corporate Communications, vol. 18, no. 4, pp. 390-416.

Jiang, Z, Henneberg, S & Naudé, P 2012, ‘Supplier relationship management in the construction industry: the effects of trust and dependence’, The Journal of Business & Industrial Marketing, vol. 27, no.1, pp. 3-15.

Yam, R & Chan, C 2015, ‘Knowledge sharing, commitment and opportunism in new product development’, International Journal of Operations & Production Management, vol. 35, no. 7, pp. 1056-1074.

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Samsung Electronics Recalls as a Business Issue

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