Samsung Company - Effective Communication - Case Study Example

COMMUNICATION IN BUSINESS Author’s Name Course Instructor Institution City Date of Submission Communication in Business Introduction Effective communication is always the key to the establishment an efficient business relationship. However, poor communication is a common event in many business environments and it has associated consequences. Communication which is done poorly always leads to detrimental effects to the organization in one way or the other. Whether it is lack of communication or it is miscommunication of information regardless of how minor it is, the impacts on the productivity of the firm are always felt. There is a great need for the management of every firm to be aware of the indicators of poor communication in the firm so as to apply the necessary measures to mend the situation before it gets worse. Brief Description Last year, Samsung Company was faced with the scandal of overheating batteries which later exploded. The events followed each other systematically. On 24th of August 2016, the company received the first complaint from a customer about the explosion of the Note 7 smartphone. Making the matter worse, the company’s website was flooded with images of smart phones which had exploded batteries. On the 2nd of September, the firm decided to make a global recall of all the Note 7 smartphones which had battery issues. The company replaced the smartphones and also refunded all the customers who had experienced the losses due to the firm’s faults. A week later, the aviation authorities in the United States warned the passengers about using Galaxy Note 7 phones in the planes. A day later, on the 9th of September, the department of Consumer Product Safety commission warned the public to stop the usage of the Samsung smartphones. On 15th of September, the Company implemented the earlier promise of recalling all the faulty smartphones in the market given that the faults emanated from the batteries. Later in 5th of October there was another overheating incident of the replaced Note 7 phones in by a plane passenger in the United States. More reports continued to be received by the organization and the retail shops in the United States officially stopped selling the Note 7 smartphones from the Samsung Company and also stopped issuing the smartphone replacements. On October 11th, Samsung Company officially ruled out the production of Note 7 smartphones and advised the public to switch them off and to stop using them permanently[Bry17]. Communication Models Involved There were two models of communication which were involved in the Samsung Note 7 scandal of 2017. Firstly, the transactional model was involved where the firm management was both the recipients and the sources of information. The channels were used where the public effectively communicated their grievances to the company and the company gave the feedback. After the implementation, the company also received feedbacks from the customers. Interference of the messages and the feedbacks was also experienced across the channels. Additionally, the constructivist model was also involved where the company communicated with the two partner companies which were involved in the manufacture of the faulty batteries (Bell 2013, p. 17). The company confirmed to the media what the exact failure of the batteries was. The firm management communicated with the press indicating that the batteries were designed and manufactured by two different companies, hence causing the battery failures. Thorough research was again carried out in the design and the material which were used in the production of the batteries. According to the research findings, the batteries were not made of enough and strong material which would serve the purpose of insulation. Additionally, the design of these batteries did not give enough space for the accommodation of the little insulation material efficiently. Therefore the battery electrodes were not accommodated efficiently by the materials which were used in the creation of these batteries. The activities of the company to investigate the issue concerning the batteries were a gesture of the relationship between the customers and the company (Fredriksson 2017). The company was aimed at maintaining the customers and hence, the management team took the initiative to investigate the matter so as to make the rational decisions. Problem Identification The firm solved the problem using various distinct steps which were useful in regaining the trust of its customers once again. The first step was the recognition of the problem (Schneider 2008, p. 3). Some batteries were implicated adversely by the design error whereby, the negative electrodes in the batteries were deflected to words the upper corner on the right sides of the battery causing the overheating problem. In the normal instances, the battery negative electrodes should not be deflected whatsoever. The batteries which were affected specifically by the insulation default had distinct characteristics. The welding was done strongly, thereby blocking the positive electrodes. The insulation tape hence penetrated through the separator causing direct contact between the negative electrode and the positive tab thus the explosion of the batteries. In a normal battery, the positive electrode is usually attached to the positive tab. The second step which was adopted by the organization was the information search so as to take the right decision on the matter. The firm stated that the management team was taking the responsibility of the company’s failure (Sillince 2008, p. 7). The management team of Samsung Company was looking into the issue through identification verification of the issues which arose from the batteries especially in the process of their manufacture. The two companies which were involved in the manufacturing of the faulty Samsung batteries were identified to be the affiliate organizations which are somewhat partners with the South Korean Company. One company was involved in the designing of the batteries while the other firm manufactured the Samsung batteries. These companies were the Amperex Technology Chinese Company and the Samsung SDI organization. Samsung was not ready to take legal moves if the companies cooperated and mend their faults. The firm, however, needed to put extra efforts in the production activities so as to recover from the financial and reputation loss that the faulty batteries caused the firm. The firm hence required to be consistent in the delivery without recurrence of the same or similar incident. Consumers’ trust is necessary in business and the incident of Samsung had already ruined the trust of their customers, especially due to health and life risks which were posed by the faulty batteries in the market. Firstly, the firm accepted that it had failed the customers and was willing to mend the mistakes by taking the responsibility of recalling all the Note 7 smartphones which were faulty. In addition, the company decided to involve into a collaborative resolution where it had an agreement with the two companies which has inefficiently manufactured the batteries. The decision of the company not to go to court after Samsung’s name was damaged in the market is a reconciliation act which was meant to solve the disputes which had arisen in a peaceful way as long as the other companies were willing to cooperate in creating sustainable batteries (Ernst 2010, p. 92). Alternative Evaluation The third step which the company implemented was the evaluation of the alternatives. The alternatives in this case were viewed in the marketing plan of advertising the smartphone and making it appealing to the customers. In this case, the persuasion was effectively done in the marketing strategy and positioning of the phone in the market to gain competence over the rival companies. The second part where the effectiveness of the alternatives was evident was when the company decided to take care of the losses that people experienced after the explosion of the Note 7 Samsung phones. In marketing of products, effective communication and positioning is a key feature which should always be included. Effective positioning is anchored on three factors, including the product, the pricing and the distribution (Marsh 2011, p. 94). The positioning of Samsung’s Note 7 smartphones was done through the presentation using large screens to attract the customers. The presentation was hence inclusive of the benefits that the customers acquired from the smartphones as well as the effect which was founded on the screens as a motivation. The purchase decision of the customers was effected in the retail shops as many pieces of the gadget which was still new in the market were bought across the continents and more importantly in the United States of America. Samsung Note 7 smartphones were introduced to the market in August 2016. The devices were marketed by the firm with an aim of conquering the Apple iPhone (Dempsey 2016, p. 81). However, the mission of the South Korean Company was cut short by the batteries which were installed in the smartphones. The customer satisfaction was not attained as the company ended up making losses rather than the anticipated profits. The company had to make a recall of approximately 2.5 million phones which had the faulty batteries after receiving grievances from the customers that the phones’ batteries overheated and eventually exploded. The firm assured the customers that the replaced gadgets were safe and could therefore cause no harm or anxiety to the customers. Unfortunately, the company did not mend the problem sustainably as there were more complaints from the clients that even the phones which the company offered for replacement were also heating. The reason why the firm failed to attain the goal despite the promises to the customers is due to lack of post-purchase assessment of the products. The post-purchase is the last step in the marketing communication theory which occurs after persuading the customers to buy the products (Finne 2017, p. 450). Outcomes of the Scandal There are various lessons that the company learned from the unfortunate which was as a result of faulty batteries. The company promised the customers that the fire incident will never occur again in the future and promised to produce Samsung S8 which was safer than the Samsung Note 7 smartphones. The company also promised the customers that it is aimed at moving forward through avoidance of frustrations in the products of the firm and ensuring that the mission is integrated into the culture of the firm. The firm also told the BBC news analyst that, the safety measures and strategies are already being incorporated in the firm to prevent to the greatest extent endangering the lives of the customers. The effects of the Samsung Note 7 also caused the firm to delay the launching of Galaxy S8 phones in the market especially in Barcelona to ensure that the phones were safe for human use because the flagship models would be used to mend the company’s name after the reputation was bruised by the fire incident if the Note 7 phones. The CEO, MR. Koh Dong-jin told the press that the normal Galaxy S event which usually takes place in Barcelona would hence be postponed. However, since there are people who still use the Note 7 galaxy phones, the company continually sends updates to the customers to prevent overcharging the phones by creating limitations (Mohammad 2012, p. 428). Components of Communication The eight key components of communication were identified in the scandal of Samsung Company in 2016. The company’s management team was the source of the information to the press about the acceptance of the battery explosion responsibility. The CEO delivered the information to the public through the BBC and closely observed the reaction of the customers. The second component was the message itself, which was passed through TV channel to reach the receivers who were the customers and the public. The feedback was received from the customers who continued to complain of battery explosion even after the company recalled the older pack of Note 7 Samsung smartphones. The context which was involved in this case was the product safety to safeguard the health and the lives public (Bell 2013, p. 17). Conclusion In brief, the company received a complaint from the customers and after an investigation the firm found out that the overheating was caused by battery faults which were not mended before the batteries were sold to the customers in different parts of the world. The recall about the Samsung batteries is estimated to cause the company a loss of up to $5.3 billion and the firm’s reputation was damaged as well. The company confirmed to the press that the fault was not in the hardware or in the software, but the batteries were the only parts which had faults. The internal and external investigations were carried out thoroughly in the South Korean firm and it was confirmed that all other parts of Samsung Note 7 device were safe apart from the battery which led to the Samsung company scandal. References Bry17: , (Ma, 2017), Read More