Samsung’s Note 7 Production And Replacement Haste Big Factor In Downfall

By now, Samsung’s fall from grace is well-documented, what with the second gigantic recall of its “Galaxy Note 7” smartphones and all the related gaffes that followed making headlines. Now, people are wondering exactly why events turned sour so quickly for the South Korean company. It turns out that Samsung might have been too much of an eager beaver, both in releasing the Note 7 and recalling it.

When reports started flooding in that some examples of the Note 7 were catching fire, Samsung’s leadership was divided as to what to do. Some thought that the issue wasn’t all that important while others wanted to act on it right away, The Wall Street Journal reports. Based on the results, it would seem the latter group got their way, which they handled badly.

According to people familiar with the matter, it was the company’s mobile division chief D.J. Koh and Samsung’s third-generation heir Lee Jae-yong who advocated for the recall of the 2.5 million Note 7 devices in the market in an effort to “do the right thing.” Unfortunately, they did so without the knowledge and cooperation of U.S. regulators, which only resulted in more liabilities falling on the company.

Sharing the company’s initial findings and diagnosis with the relevant agencies in the U.S. including the Consumer Product Safety Commission would have allowed for a coordinated effort in not only getting to the bottom of the issue but also to handle the recall in such as a way that would have salvaged Samsung’s reputation. Instead, the South Korean giant simply opted to issue the recall, which caught regulators by surprise.

When the company finally did seek the help of the CPSC, it wanted what they called a “fast-track resolution,” which left no room for effective investigation, The Verge notes.  It involved the full-scale recall of all of the devices, which the agency simply does not recommend.

The Note 7 case involved complex technical problems that needed time to be resolved, but all Samsung cared about was getting it out of the streets. So now, the company has no idea what happened, are left with billions in losses, and with their reputation in tatters.