How to respond to a crisis

On August 19, 2016, the South Korean government released the Samsung Galaxy 7 for sale. However, it took a month or so after the phone was introduced before explosive phone cases started to surface. The first reports of a Note 7 battery explosion occurred on August 24th, when the device exploded while charging. After the initial incident where reports of the Note 7 catching fire started to circulate, similar accounts later started to emerge. 92 instances of battery overheating were reported by the Samsung Company in the US. 92 reports were made, of which 26 were burns from the Galaxy 7, and the remaining 55 concerned property damage. There was also a case in Florida where a man claimed his vehicle caught fire when the Galaxy Note 7 was charging inside. The world’s largest carrier known as American Airlines, United Airlines, and Delta Airlines occasionally instructed their passengers at the entrance and also when on board to switch off Note 7 to avoid a possible explosion. Because of these scenarios, the Samsung Company, in early September decided to halt the sale of Note 7, arranged for the replacements, and dispatching of improved versions. The decision to suspend had adverse financial implications on the company (Raja, 2016). The total amount of the product recall led to a 7% drop in the market share. The company needs to act fast because the situation is delicate when it comes to balancing of timeframes and accuracy.

Samsung appropriately handled the Note 7 crisis by stopping the sale. It achieved this decision by ordering for a delay in shipment and official worldwide recall according to Reuters.

Samsung inappropriately managed the crisis because of the way it communicated the action they had taken. The way they described the information was bureaucratic as stated by Mr.Crutenfied.

Crisis appropriate response

Samsung appropriately managed the galaxy seven-battery explosion problems by delaying the shipment and the formal global recall. Samsung decided to postpone the dispatch for the Note 7 according to Reuters. The delay followed the announcing of an official worldwide recall, through the company’s website. Following the recall, Samsung instituted an exchange program, whereby the initial users of Note 7 got a replacement with the improved Note 7 and at this time, it was possible to tell the set the phone belonged to by consulting a black square found on the bottom of the box. The journal mentions two individual users from California who got a substitute galaxy Note 7 each, though they became too hot later. Also, the cases of replaced phones catching fire begun to surface on nineteenth October. A week early, a Southwest Airlines had an experience of a telephone producing smoke even when it was off. The scenarios intensified the Samsung’s decision to stop the sale of Note 7 phone. According to Gaines-Ross (2015), the company needs to act fast during a crisis to protect its reputation.

The posting of a statement on the website warning users of Note 7 to switch off their phones instantly and get in touch with the selling outlets for refund is an attempt to gain a positive reputation. Delaying of the shipment granted the company adequate time to perform quality control and testing on the Note 7 and find what caused the battery explosion problem. Recalling Note 7 phones once sold to customers and promising an improved substitute shows the magnitude of committed Samsung has towards its customers. Samsung therefore suitably handled its crisis by presenting to the world its ability to provide replacements to those users affected.

Crisis inappropriate response

Samsung inappropriately handled the Galaxy Note 7 battery explosion problem because of a mix-up in the way they communicated the actions they took. Samsung published a statement on its website; alerting the owners of the phones that it has stopped the production of Note 7 phones and that they should stop using those phones. However, it took some days for the information to be displayed on the facebook page or twitter account. Andrew Gilman, Chief executive of the crisis communications firms, issued a caution message on the Samsung Homepage. He stated that the company should exhibit its duty of care through constant communication in twitter, facebook, and other social channels. Due to this, public disappointment was beginning to show, for example, a consumer twitted to sprint complaining, “I have lost faith in Samsung mobile devices.” Also, earlier September, Samsung gave a press statement in Hong Kong, convincing customers that their phone had a different battery from the one reported and that they should not shy away from using their phones. But the following day Samsung was forced to withdraw its statement after 500 phone cases emerged.

Samsung is essential to South Korea’s economy, contributing approximately 17% of its gross domestic products. Therefore, the government regulators were not that quick to call Galaxy Note 7 off when compared to regulators from other countries. However, Consumer safety should remain a top priority for any organization, and crisis best practices should be into consideration (William, Gruber, Sutcliffe, & Shepherd, 2017). The company should follow a transparent approach and make it easy for its global consumers to follow the guidelines in case of a crisis (Stephen, 2017). Unclear communication results in public disappointment (Ulmer & Pyle, 2016). According to Mr. Cratenfied, and Andrew Gilman, Samsung failed to handle its crisis accordingly because it was bureaucratic and passive in its approach.

References

Gaines-Ross, L. (2015). Reputation warfare Harvard Business Review, 88(12), 70-76

Raja, S. (2016). Samsung: It’s Time To Take Note. The Market Mogul.

Stephan, K. (2017). Exploding Galaxies: How to do recalls right. IEEE Consumer Electronics Magazine, 6(2), 99-100

Ulmer, R. R., & Pyle, A. S. (2016). International Organizational Crisis Communication. The Handbook of International Crisis Communication Research, 108-118.

Williams, T. A., Gruber, D. A., Sutcliffe, K. M., Shepherd, D. A., & Zhao, E. Y. (2017). Organizational Response to Adversity: Fusing Crisis Management and Resilience Research Streams. Academy of Management Annals, 11(2), 733-769.