Last week the Samsung Galaxy Note 7 has been officially recalled and retired from the market on account of manufacturing defects leading to numerous units catching fire and burning to a crisp. However, while the smartphone has been retired, the ripple effects created by these unfortunate events are ongoing and will probably affect the company for many months to come. Needless to say, the company's image – or at least the “Galaxy Note” brand - has been stained by these recent events, and apparently Samsung Electronics’ heir and vice chairman, Lee Yae-yong, is now under increased pressure to show greater leadership in moments of need, with some market watchers saying that Lee should issue an official apology for the Galaxy Note 7 fiasco.
Vice chairman Lee Jae-yong has been leading the company since the year 2014 after his father, Lee Kun-hee, has been hospitalized for a heart attack, and last month in September the vice chairman has also been nominated to join the board of directors on October 27th. Meanwhile, analysts cited recently by Nikkei are of the opinion that Lee Jae-yong must show firmer leadership in reforming the company’s mobile and IT branches, ensuring that the PR fiasco surrounding the Samsung Galaxy Note 7 won’t spread and cause any further losses. According to certain estimates, the faulty Galaxy Note 7 may lead to the company losing around 7 trillion Won ($6.13 billion), and citing the CEO of Score, Park Ju-gun – an information provider dealing with Korea’s top 500 companies – “Lee needs to take the initiative in patching up the crisis by putting the IT and mobile communications divisions on the right track.” Park added that “Jae-yong is also responsible for strengthening the company’s manufacturing technology which had been top class under his father’s leadership.” Although Lee-Jae-yong has been leading Samsung since the year 2014, and while Lee is considered a down-to-earth leader, his ability to lead the group out of such troubled times has yet to be proven.
Another South Korean analyst and CEO at Mingle Spoon – a crisis management consultancy agency based in Seoul – says that Lee Jae-yong should be truthful about the problems surrounding the Galaxy Note 7 and that the vice chairman “should show that he and the company care for customers not only in Korea but also all over the world by letting them know the problems[...]”. The analyst believes that this will be the best way to regain customer confidence, which is vital for the company in order to make the upcoming Samsung Galaxy S8 a success. Mingle Spoon’s CEO believes that Lee Jae-yong may apologize to consumers once he joins the board of directors later this month. Meanwhile, other market watchers seem to weigh in by saying that Lee Jae-yong should borrow a page from the playbook of Akio Toyoda, CEO of Toyota Motor, who led the company through a recall crisis in the United States back in year 2009 after some vehicles have been identified to have faulty breaks. The CEO of Toyota Motor apologized to American customers in Congress, and market watchers believe that a public apology for the faulty Samsung Galaxy Note 7 by Lee Jae-yong could save the company’s image just as well.