Order 1060548: Research Report on Samsung Group assingment
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SamsungKanchan1.docxSustainability
Samsung has claimed so much in their sustainability report regarding their concern for environment, quality control and product safety in terms of producing products in sustainable way. However, it cannot be denied that Note 7 crisis has left the great impact on the environment. There was storm of questions about how a sophisticated electronics company with decades of experience can put a faulty product in the market. There was an issue with quality assurance and testing to make sure the device is safe and properly designed. Samsung boasted so much about the assurance and quality (refer to appendix A) but failed to apply in practical. Even Samsung has revealed in their sustainability report that they had quality issue related to the Galaxy Note 7. (Samsung Sustainability Report 2017)
According to the Greenpeace (International NGO), Samsung manufactured 4.3 million Note 7 devices added about 730,000 kg material which contained rare earth minerals and precious resources such as cobalt, Tungsten, Tantalum, Gold, Silver. It was said that 99% of rare earth minerals cannot be recovered for recycling stated by iFixit. It was just an estimated that recycling effort by Samsung will help to collect up to 142,828 kg of resources. Now the question is, what will happen to the remaining waste? Even environmental organisations questioned Samsung about its recycling plan following an eco-friendly manner and how will they execute their plan.
It was stated in the Samsung’s sustainability report 2017 that company has reduced its Sustainability management value due to environmental impact of wastage.
Actions taken by Samsung after Note 7 Crisis:
Their plan was to recall all the sold devices at the initial stage and after five months, Samsung revealed its commitments towards the environment, recycling and to save the galaxy. Samsung said it will considered to be used their devices as refurbished phones after the consultations with regulatory authorities, carriers and local demand. Moreover, components such as camera modules and semiconductors will be detached and used for test sample and production purposes. Final process will be to extract precious metal using environmentally friendly methods. Apart from all, Samsung has joined the EUs and R&D and new eco-friendly processing methods for testing.
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Effect on company’s goodwill
According to the report published by Boston-based consulting group Reputation Institute, Samsung’s place has fallen drastically to 89th, a huge drop of 69 spots in the global Corporate Social Responsibility ranking (Lee Wan 2017). The report examines Corporate Social Responsibility and weighs factors such as social influence, treatment of workers and corporate structure in major companies from different companies.
It was estimated that Samsung’s shares prices were declined almost 7%, knocking about 17billion off the company’s market value. Apart from this, class action lawsuits have been launched in many countries but again Samsung has not stated this provision as a contingent liability. Insider from Samsung has also revealed that the crisis was really worse that it directly impact company’s products, brand and trust with customers.
Actions that company has taken to recover their goodwill
Without any doubt, incident with Note 7 cost Samsung a lot of money and some goodwill. Samsung had a choice to continue to sell their phones, continue or delay trying to find out issues with the device. But Samsung is doing whatever is within their power to maintain an ethical and sustainable business. Company chose not to risk with counsumers’ life or risking the entire Samsung brand so it took sencond road by recalling its 3 million devices. Furthermore, firm announced to give owners of Note 7 a price reduction on the Note 8, obviosly on some terms and conditions, such as by returning old samsung phones.
Referencing
https://ciwm-journal.co.uk/samsung-sets-recycling-plan-faulty-galaxy-note7/
http://time.com/4531372/samsung-note-7-recall-fires-overheating-why/
http://english.hani.co.kr/arti/english_edition/e_business/811843.html
https://www.triplepundit.com/2016/10/samsungs-failed-note-7-phones-pose-big-environmental-problem/
http://bgr.com/2017/07/18/galaxy-note-fe-vs-galaxy-note-7-recycling/
