Reactions
The Galaxy 7 Note case study evokes different reactions because of the initial Samsung’s response and the actions that followed. The company publicly denied that the smartphone was faulty and below the industry standards. I believe it was inappropriate for the company to deny such accusations despite knowing that the product was prematurely launched to compete with Apple’s iPhone 7. However, when the issue became a global crisis, Samsung attempted to correct the unethical business practices by recalling the faulty gadgets and replacing them with newer versions. This was a strategic move that promoted the company’s corporate social responsibility (CSR) and enhanced its competitiveness.
Background Experiences
Following ethical practices ensures that organizations promote the workers’ integrity and enhance business image and trust among the stakeholders. I believe that adopting business ethics as a guiding principle in the production process and customer relations to avoid negative publicity is critical. I feel that Samsung’s case shows the significance of using moral laws to support corporate social responsibility initiatives as a ‘means’ to achieve business goals. The company produced Galaxy 7 Note without proper testing to compete with the iPhone 7, endangering the lives of many users. Although Samsung denied the initial allegations of the smartphone exploding, it took considerable measures to recall more than 2 million phones worldwide and replace them with improved versions. In my opinion, the move shows that organizations should include customer value and experience as part of the core business strategy that informs CSR practices.
Important Takeaways
The case provides numerous lessons that companies should consider in their CSR operations. Negative publicity significantly affects the company’s reputation and can impact customer loyalty leading to fewer profits. However, through practical CSR approaches, a firm can redeem its name and improve its market share. Jizi et al. (2013) claim that a special relationship exists between corporate governance and CSR efforts. The study found that CEOs might use higher CSR disclosures to appease the stakeholders to salvage their reputation. This indicates that CSR can be used as a strategic initiative to restore a brand’s image after a public relations crisis. Samsung exploited this philosophy to ensure business continuity and competitiveness in the dynamic smartphone industry. Further, it emerged that the company was promoting ethical business practices, which resonates with consumers’ interests. In that case, the increased market share resulted from the widely publicized CSR initiative of recalling the phones and replacing them with newer models.
Other Comments
Kant’s categorical imperative assumes that individuals should act in ways that can be regarded as universal laws. This implies that making others happy is a moral duty not imposed by statutes (Tapek, 2018). Applying categorical imperative in Samsung’s CSR stunt shows that the company chose to replace the faulty smartphones to gain a competitive advantage. The organization attempted to present itself as an ‘ethical corporation’ despite using CSR as a ‘means’ to achieve the business goal (Tapek, 2018). This approach can help other organizations to develop sustainable CSR initiatives to ensure continuity by ethically appealing to the consumers. Although the company might have incurred losses during the process, the long-term organizational goals were achieved. In most cases, the categorical imperative fails to apply in businesses because of the costs involved in fulfilling these mora duties and raising the shareholder value. Despite this hindrance, Samsung was able to overcome these expenses to promote customer happiness. Therefore, firms can selectively apply this concept in their CSR approaches to enhance the sustainability of the business image.
References
Jizi, M. I., Salama, A., Dixon, R., & Stratling, R. (2014). Corporate governance and corporate social responsibility disclosure: Evidence from the US banking sector. Journal of Business Ethics, 125(4), 601-615.
Tapek, K. (2018). Corporate social responsibility in the light of Kant’s categorical imperative. Annales. Etyka w życiu gospodarczym, 21(7), 85-96.