(http://www.androidauthority.com/samsung-galaxy-note-7-recall-714419/)

In a regulatory filing in South Korea this Tuesday, Samsung has confirmed that it is permanently stopping production of the Galaxy Note 7 smartphone  (https://www.theguardian.com/technology/2016/oct/11/samsung-galaxy-note-7-exploding-battery-safety-concerns) This official “death” of Note 7 has put a final end to the crisis of explosions and fires caused by overheating batteries.

 

In fact, before this final decision, Samsung has been switching its solution to quickly fix this issue. Samsung first recalled 2.5 millions of devices after the report of overheating batteries came up in the beginning of September. It urged consumers to immediately turn off the phones and get them replaced with the new Note 7. Not too long after the recall, Samsung announced that it planned to issue a software update as another “quick fix” for its recalled Galaxy Note 7 smartphones that will prevent them from overheating by limiting battery recharges to 60 percent.(http://www.cbc.ca/news/technology/samsung-galaxy-note-7-recharge-1.3759648) However, after more fires involving new devices that were supposed to be safe replacements for recalled models, Samsung decided to halt sales of the star-crossed Galaxy Note 7 smartphone on October 10th. (http://www.cbc.ca/news/business/samsung-galaxy-note-7-production-1.3798550).Just a day after the halting sale, the production has finally been ended permanently.

 

It might seem reasonable and harmless for Samsung to spend one month trying different solutions because people who own Note 7 have already paid, which means profits have already been created for Samsung. However, is Samsung really losing nothing? When busy changing its solution to public, one important factor that cannot be ignored is the opportunity cost of doing so. Consumers always seek more reliability from the producers when having a crisis. Spending a even longer period of time in deciding a responsible and reliable solution usually can better offset the damage of trust between customers and company, compared to just throwing out a quick fix，which producers are even not sure about its feasibility. Seeing Samsung making mistake to cover another mistake, consumers will only be more and more disappointed. The opportunity cost in this case, is customers’ faith on Samsung in the future. Realizing this problem, Samsung Electronics Co slashed its quarterly profit estimate by a third this Wednesday, soaking up a US$2.3 billion hit from ditching its flagship smartphone.(http://www.bnn.ca/samsung-slashes-us-2-3b-from-profit-forecast-as-note-7-crisis-spreads-1.583614)

 

This is not the first time Samsung has shown its lack of ability to recognize the severity of the problem and to find a responsible solution within a short time. The post on business ethics in Debbie Carr’s blog(https://blogs.ubc.ca/debbieecarr/) shows that when dealing with the health issues of workers such as manufacturing facilities and heavy working hours, Samsung “issued a statement of apology” supplemented by a “100 million won fund”, which still caused many to criticize Samsung’s ability to fix errors immediately. I agree with Debbie’s application of the concept of business ethics to this case. Like she said, it is critical that the company abides by the moral guidelines. A responsible solution can not only suggest a company’s ethical standards and emergency power, but help maintain a better customer relationship as well. This is what Samsung needs to learn.

 

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