The Samsung Galaxy Note 7 was one of the hottest phones in the market when it was released in August 2016. The phone was so hot that several of them caught fire in the hands of consumers. This led to Samsung’s decision in October to issue a worldwide recall of the Note 7; resulting in a $5.5 billion loss. Now, just five months later, Samsung has made yet another decision: resell the refurbished devices to recoup losses.
Samsung’s decision can be explained through the Six-Step Rational Decision-Making Model. With the problem of a $5.5 billion loss identified, the second step for Samsung would be to identify the criteria. In Samsung’s case, their criteria would include any additional expenses needed to rebuild its loss, and customer feedback. As the refurbishment of recalled devices is less costly than the development of a new device to replace the Note 7, Samsung valued the decision to simply refurbish and resell the Note 7 over other alternatives.
Was this decision ethical from a long-time Samsung user’s perspective? Personally, I view Samsung’s decision as unethical. From Exhibit 12-6 on page 435 of Nancy Langton’s Organizational Behavior textbook, Samsung’s decision to keep costs low and resell recalled devices is largely considered a decision motivated by self-serving interests. On the contrary, I believe that an alternative that Samsung may have passed over would be to face the situation and develop a newer, safer, device to compete in the tech market. This would have placed Samsung back in the competition with the other tech giants. But for now, the decision may have further lowered the market confidence in Samsung, digging Samsung deeper into its problem.
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Sources:
Langton, Robbins, Judge, Organizational Behaviour, 7th edition, p. 435
Reuters, Thomson. “Samsung to sell refurbished Galaxy Note 7s after battery fire recall.” CBCnews. CBC/Radio Canada, 27 Mar. 2017. Web. 28 Mar. 2017.
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