Managerial Decision Making: Operational Issues at Samsung Report

This report provides a detailed analysis of the operational issues faced by Samsung, particularly focusing on the Note 7 recall incident. It examines the problem background, defines the core issues related to product defects and battery failures, and explores various solution generation techniques, including the application of the How-How diagram. The report evaluates these solutions, emphasizing the importance of effective decision-making and the development of quality control plans. Furthermore, it outlines an implementation plan, detailing the steps necessary to improve Samsung's operational efficiency, including setting goals, timelines, employee accountability, and performance metrics. The analysis underscores the significance of proactive problem-solving and strategic planning in maintaining a competitive edge within the fast-paced smartphone industry.

OPERATIONAL ISSUES AT
SAMSUNG
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2020
STUDENT DETAILS
[Company name] | [Company address]

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Table of Contents
1. Introduction............................................................................................................................2
2. Problem Background..............................................................................................................2
3. Problem Definition.................................................................................................................3
4. Solution Generation...............................................................................................................3
5. Solution Evaluation................................................................................................................5
6. Implementing the Plan...........................................................................................................6
7. Conclusion..............................................................................................................................8
8. References..............................................................................................................................9

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1. Introduction
The managerial effectiveness of the organisation is required to be maintained so that
the organisation can effectively perform within the industry. As the smartphone industry is
highly competitive and is influenced by technological changes emerging within the industry.
Therefore, the organisations are required to produce competitive products within the industry
so that it can maintain its market share within the industry. Samsung’s inefficiency to analyse
the defects within the product resulted in an explosion of its smartphones and the company
had to finally recall its smartphones from the market. The report is focused on analysing the
reason due to which Samsung faced such issues, and effectively finding the possible solution
to overcome the impact of the issues.
2. Problem Background
The recall of Samsung Note 7 smartphone was the result of a fault in the operational
level of the organisation, as they failed to analyse the product fault before its launch which
resulted in an explosion within the phones and finally the organisation had to recall its
devices from the market. due to the fault in the product design of the smartphones, the mobile
phones were overheating and resulted in the explosion of its devices. The smartphone
manufacturer launched its Note 7 which was the part of its Samsung Note Series, in August
2016, soon after the release the customers started reporting about the overheating of the
smartphone (Heathman, 2017).
Samsung recognized that the issue was due to the faulty battery designs that were
used within the smartphones, and focused upon recalling the existing devices and replacing
them with a new one which contains battery manufactured from another battery
manufacturer. But again, the product design team at Samsung failed to identify the faults

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within the battery and the replacements provided to the customers started exploding, which
resulted in a ban on usage of Samsung Note 7 within airlines and at public spaces. And in
October, the company had to finally shut down the production unit for Note 7 and pressurize
the customers to return the Note 7 smartphones which they are using for security purpose
(BBC News, 2017).
3. Problem Definition
Customer satisfaction is the primary and ultimate objective of an organisation.
Therefore, the product or the service that has been delivered to the customer must be
effectively analysed and monitored so that it can meet the customer expectation and can fulfil
his need his demand. The product designing is an important part of the operational level
within an organisation (Morrisa, Halpernb, Setchia, & Pricketta, 2015). As the products
manufactured within the organisation is required to be designed and developed as per the
customer as well as industry requirements, therefore ensuring efficiency of product designing
is the key objective of the organisations operating in the product manufacturing industry.
4. Solution Generation
The issue at Samsung was due to the fault in the product designing and of using the
defective batteries in its smartphone devices, which resulted in overheating of the
smartphones and explosion of smartphones while charging or during power on/off the device.
Samsung focused on replacing the battery used within the device with battery manufactured
by a different manufacturer, but the solution for the issue did not solve by replacing the
batteries from the devices because the replaced batteries were not analysed and they were
also proved to be defective (Seifert, 2016).

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To meet the product requirement and to provide the customer with a better product in
replacement in it required that Samsung follows How-How Diagram. As the theory is focused
on analysing the fact that how the problem can be addressed and what is the range of
alternatives available for the organisation to handle the situation. How-How Diagram is
focused on analysing the key problem for which the solution is required to be generated.
Then identifying the possible solutions that can be used to address the issue and evaluating
each of the possible solutions, so that the effectiveness of the alternatives can be identified
and concludes with implementing a specific and effective solution that would address the
issue and contributes towards improving the performance of the organisation (Wood, Cogin,
& Beckmann, 2009).
The issue faced by Samsung was the explosion of its smartphone devices, upon which
it is required to be focused and find out the alternative ways through which the issue can be
addressed. The company focused on replacing the defective batteries with batteries
manufactured from a different manufacturer but failed to identify the defect within the new
batteries, which resulted in the final recalling of the devices from the market. Rather than
using batteries manufactured by Amperex Technology Limited, Samsung would have
focused on analysing the defect within the batteries which were initially used within the
smartphones, and set up an in-house a battery manufacturing unit for the smartphones, so that
such issues can be overcome (Agomuoh, 2017).
Samsung also had an alternative source to import the batteries after analysing the
battery effectiveness and the safety of using the battery within the smartphones. The
evaluation of the alternatives is required to be done by the operational level managers and the
employees working to improve the product design and quality. As evaluating the solutions
before implementation is necessary to overcome any challenges during the implementation of

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the planned process and to ensure that the problem will be addressed effectively within the
organisation.
At Samsung, the operational level managers were required to effectively analyse the
issue within the smartphone before focusing on replacing batteries from the devices, as the
replaced batteries were not able to solve the issue because the batteries used were also
defective (Byford, 2017). Therefore, at Samsung, it is required that the managers effectively
focus on analysing the product and the respective parts before introducing the product within
the industry so that such issues can be identified and necessary steps can be taken to
overcome the issue.
5. Solution Evaluation
Implementing the use of How-How diagram effectively in problem-solving within the
organisation results in effective decision making and finding effective solutions to address the
issue within the organisation. the management at Samsung is required to focus upon finding
the alternative solution as discussed above which may help the organisation in addressing the
issue the organisation is facing. To address the issue of defective batteries within its
smartphone, Samsung was required to effectively analyse the issues due to which the problem
arises, as such analyses would help Samsung at an early stage to identify the root cause of the
issue and would help the managers in taking effective decisions.
The implementation of an effective theory of decision making within the organisation
would also help the management in analysing the available alternatives and find out the most
suitable alternative for addressing the issue within the organisation. The evaluation of
batteries before introducing the product within the market would have resulted in early
identification of the defect and would have been solved. As Samsung has launched its Note 7
as a rival for the Apple’s 7 series, but due to the defect within the devices, the company failed

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to compete with the products and had to recall more than 2.5 million Note 7 in September
2016 (Chen & Sang-Hun, 2016).
The solution to the issue at Samsung is to develop product policies and quality plan a
per the customer as well as industry requirements and to effectively analyse and evaluate the
product and its related parts before release so that the customer expectation can be met and a
competitive product can be introduced within the industry. Also, while deciding upon the
solution to address an issue within the organisation, it is required that the employee
engagement within the organisation is ensured, and their recommendation is also considered
so that the organisation effectiveness can be ensured (Carucci, 2019).
Implementing a control plan within the organisation is also effective to ensure that the
solution implemented within the organisation will result in improving the performance of the
organisation. As an effective solution generation within the organisation is based on the
assumptions that might happen within the industry (Randhawa & Ahuja, 2017). Therefore, it
is required that while implementing the solution an effective analysis of the implemented
solution is done so that the effectiveness within the industry can be ensured.
6. Implementing the Plan
Implementing the plan effectively within the organisation is required to ensure the
success of the organisation within the industry. As the set strategic goals are required to be
put into action as per the requirements so that the activities within the organisation can be
carried out as per planned and the goals and objectives can be achieved. The implementation
process involves a set process that is required to be followed to ensure the effectiveness of the
organisation (Herrera-Sánchez, Leon-Perez, & Leon-Rubio, 2017). The implementation
process starts with identifying the goals and objectives that are required to be met by the
business organisation.

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Samsung goal is to be the market leader in the smartphone industry and is focused on
providing the customers with the product and services that satisfy their needs and
requirements. Therefore, it is required that the products offered by Samsung are competitive
and would provide customers with innovative products so that the market share for the
product can be increased and the goal can be achieved (Cecere, Corrocher, & Battaglia,
2015). As Samsung launched Note 7 to compete with the Apple 7 series, within the industry.
The next step within the implementation of the plan includes setting up of specific
timeline within which the goals and objectives need to be achieved. As deciding a specific
time helps the management in framing policies and strategies to achieve the set goals and
objectives (Meyers, Durlak, & Wandersman, 2012). Samsung should focus on effective
analysis of issues within the organisation and forming policies to overcome such issues
effectively.
The implementation of plan within the organisation requires that the employees
within the organisation are held accountable for their roles and performances within the
organisation. As holding people accountable for their job roles, ensures that the employees
will be focused towards the task allocated to them and will contribute towards the
effectiveness of the organisation (Clark, 2013). As in the case of Samsung holding the
operational level managers accountable for ensuring the product quality and service would
have prevented the usage of the defective batteries within the smartphones.
Setting up of a performance metrics is also important to evaluate the success within
the organisation, as the activities within the organisation is performed to achieve the goals
and objectives of the organisation, therefore it is required to set up a qualitative or
quantitative metrics so that the ultimate result of the organisational performance can be
measured and analysed whether the goals and objectives have been achieved or not

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(Raymond, 2015). Samsung’s performance metrics can be based upon the market share for its
product in comparison to its competitors.
7. Conclusion
The smartphone industry is highly competitive and to succeed within the industry it is
required that the organisation must focus upon providing its customer with products
competitive within the industry so that the customer needs and requirements can be fulfilled
and the organisation can improve its market share within the industry. Samsung among the
world’s leader within the smartphone industry, due to its inefficiency to identify the defects
within the product, resulted in high criticism within the industry and finally had to recall its
product from the market.
As to overcome the issue Samsung would focus on improving the efficiency of its
operational level managers by implementing an strategic plan based on How-How diagram,
which helps in identifying and analysing the possible solutions for a particular issue and also
helps in selecting the best among the available alternatives so that the issue can be addressed
and the effectiveness of the organisation can be achieved. Also, an effective implementation
plan is required to be adopted so that the activities within the organisation can be done as per
planned and the goals and objectives can be achieved.

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8. References
Agomuoh, F. (2017, January 22). Samsung Galaxy Note 7 Battery Failure Explained:
Manufacturer Details Separate Defects In Two Device Components. Retrieved from
International Business Times: https://www.ibtimes.com/samsung-galaxy-note-7-
battery-failure-explained-manufacturer-details-separate-defects-2479276
BBC News. (2017, January 23). Samsung confirms battery faults as cause of Note 7 fires.
Retrieved from BBC News: https://www.bbc.com/news/business-38714461
Byford, S. (2017, January 22). Samsung says bad batteries and rushed manufacturing
doomed the Galaxy Note 7. Retrieved from The Verge:
https://www.theverge.com/2017/1/22/14353686/samsung-galaxy-note-7-recall-
reason-report
Carucci, R. (2019, November 01). Balancing the Company’s Needs and Employee
Satisfaction. Retrieved from Harvard Business Review:
https://hbr.org/2019/11/balancing-the-companys-needs-and-employee-satisfaction
Cecere, G., Corrocher, N., & Battaglia, R. D. (2015). Innovation and competition in the
smartphone industry: Is there a dominant design? Telecommunications Policy, 162-
175.
Chen, B. X., & Sang-Hun, C. (2016, October 11). Why Samsung Abandoned Its Galaxy Note
7 Flagship Phone. Retrieved from The New York Times:
https://www.nytimes.com/2016/10/12/business/international/samsung-galaxy-note7-
terminated.html
Clark, D. (2013, May 8). The Right Way To Execute Your Strategic Plan. Retrieved from
Forbes: https://www.forbes.com/sites/dorieclark/2013/05/08/the-right-way-to-

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execute-your-strategic-plan/#4b4e662e29e2
Heathman, A. (2017, January 24). We finally know why Samsung's Galaxy Note 7s 'exploded'.
Retrieved from Wired: https://www.wired.co.uk/article/galaxy-note-7-issues-what-
happened
Herrera-Sánchez, I. M., Leon-Perez, J., & Leon-Rubio, J. (2017). Steps to Ensure a
Successful Implementation of Occupational Health and Safety Interventions at an
Organizational Level. Frontiers in Psychology.
Meyers, D. C., Durlak, J. A., & Wandersman, A. (2012). The Quality Implementation
Framework: A Synthesis of Critical Steps in the Implementation Process. American
Journal of Community Psychology, 462-480.
Morrisa, A., Halpernb, M., Setchia, R., & Pricketta, P. (2015). Assessing the challenges of
managing product design change through-life. Journal of Engineering Design, 25-49.
Randhawa, J. S., & Ahuja, I. S. (2017). 5S implementation methodologies: literature review
and directions . International Journal of Productivity and Quality Management, 48-
74.
Raymond, A. (2015, March 02). 5 top ways to implement a strategic plan. Retrieved from
The Business Journal: https://www.bizjournals.com/bizjournals/how-to/growth-
strategies/2015/03/5-top-ways-to-implement-a-strategic-plan.html
Seifert, D. (2016, October 11). The Samsung Galaxy Note 7 Has Been Recalled. Retrieved
from The Verge: https://www.theverge.com/2016/8/16/12491196/samsung-galaxy-
note-7-review
Wood, R., Cogin, j., & Beckmann, J. F. (2009). Managerial Problem Solving: Frameworks,
Tools & Techniques. Australia: McGraw Hill.