Case Study:

Samsung's Recall of Its Galaxy Note 7

In August 2016, Samsung launched its much hyped-about Galaxy Note 7.Within a week of its launch, Samsung received reports of the Galaxy Note 7 catching fire.The first explosion was reported in South Korea and another was reported in China on the same day.No official feedback was given and instead a staffer replied that burning incidents do happen and the user did not use an original charger.

On 2 September, Samsung announced the global recall of its Galaxy Note 7.Galaxy Note 7 owners were urged to switch off their devices while Samsung investigated reports of the device catching fire and exploding.Two and a half million Galaxy Note 7 were recalled and an exchange programme was offered to US customers (China was excluded).The Chief Executive of Samsung Electronics made a public apology.

Subsequently, there were reports of the replaced Galaxy Note 7s catching fire, despite Samsung insisting that the replaced devices were safe.Airlines advised passengers with Galaxy Note 7 to turn off their device before boarding.On 11 October 2016, Samsung announced that it would halt the sales and production of the Galaxy Note 7."Because consumers' safety remains our top priority, Samsung will ask all carrier and retail partners globally to stop sales and exchanges of the Galaxy Note 7 while the investigation is taking place," the company said."Consumers with either an original Galaxy Note 7 or a replacement Galaxy Note 7 device should power down and stop using the device and take advantage of the remedies available," it added.

Source: Adapted from Samsung Galaxy Note 7 Owners Told to Turn Off Device, 2016.

Required:

a.Identify three stakeholders in the above case and explain their stakes.

b.Critically evaluate Samsung's action of recalling the Galaxy Note 7 using Velasquez's Moral Standards Approach.

In addition, to recalling the Galaxy Note 7and giving a full refund, propose two possible ways how Samsung can regain customers' confidence in their products.