Samsung Galaxy Note 7 fiasco: Response indicates challenges at the South Korean manufacturer

The Samsung Galaxy Note 7 fiasco has placed the global spotlight on Samsung. The company is under intense pressure and scrutiny to resolve the issue at the earliest, but their handling of the situation has been less than stellar. To add to this mess, reports have started popping up that the company is unintentionally crippling the investigation into the cause of the disaster. [caption id=“attachment_333835” align=“aligncenter” width=“640”]  Image: nawazsagri, imgur[/caption] While Samsung does seem keen on getting to the bottom of the issue, Samsung is even more keen on saving its own hide. Reports from The Verge and The New York Times indicate that the company is forcing its investigators to avoid using email and other electronic means of communication in order to avoid a paper trail.  This is hampering investigators’ ability to communicate and slowing down a crucial investigation. Why? The company is afraid that it might be sued and they don’t want any evidence laying around. In 1993, Samsung burnt 150,000 defective phones and then used bulldozers to raze what was left. The company chairman, who ordered this destruction, was quoted as saying, “If you continue to make poor-quality products like these, I’ll come back and do the same thing.” In 2012, three weeks before the launch of the Samsung Galaxy SIII, someone discovered that the back panel on production units weren’t of the same quality as the one demoed earlier. The result? 100,000 panels in warehouses were scrapped. Over 100,000 phones waiting to be shipped were recalled to have their back panels replaced.  For a company that’s made such a strong commitment to quality and safety, their response to the Note 7 fiasco is odd, to say the least. Another report by The New York Times points out that the Note 7 was only one in a long line of defective products being built by the company. By The New York Times’ estimates, 144,000 Samsung washing machines have been recalled in Australia, 184,000 microwave ovens in the US, 210,000 refrigerators in South Korea and a handful of smaller recalls involving tens of thousands of defective units in various countries. [caption id=“attachment_340697” align=“aligncenter” width=“640”]  The Samsung Galaxy SIII Mini[/caption] The report adds that Samsung customers are used to “jumping through hoops” to get through the recall process and that they don’t find Samsung’s handling of the Note 7 fiasco to be surprising. Product recalls are nothing new, they happen all the time, but Samsung’s handling of the situation is drawing more ire than the defective products themselves. “Samsung has not been communicative with consumers, regulators or the media as clearly as it should have during this recall,” William Wallace, a policy analyst for Consumers Union, the advocacy arm of Consumer Reports told The New York Times. More recently, we reported that certain models of Sasmung’s top-loading washing machines were smashing through walls. If it wasn’t for the US CPSC (Consumer Product Safety Commission) explaining the situation, consumers would have been clueless as to the best course of action. Obviously, there’s something seriously wrong at Samsung and everyone is pointing fingers at the company’s corporate structure.  In 2013, Bloomberg was invited to meet with Samsung employees at Samsung’s facilities in South Korea. The one quote that stood out from the subsequent report was, “For all its global reach, the company remains opaque.” Chang Sea Jin, a professor at the National University of Singapore tells Bloomberg that, “Samsung is like a militaristic organisation. The CEO decides the direction to move in, and there’s no discussion — they carry out the order.”  This “militaristic” approach and discipline has worked for Samsung in the past, their CEO did transform the company from a low-cost, Korean-centric device manufacturer to a global conglomerate with a finger in every pie that contributes to 17 percent of South Korea’s entire GDP. In 2016, that is not going to be enough. Transparency is the need of the hour and toying with people’s trust is not something that Samsung can afford to do right now. A year from now, the company might live down the Note 7 disaster, but unless we see a fundamental change in the company’s outlook, the Note 7 will not be the last Samsung device that goes up in flames.