Capstone Project – Oral Presentation
The capstone project is a consultative report for Samsung Electronics which focuses on areas including management, time management, quality management, cost management, and risk management. In addition, the consultative report will consider how effectively the target organization performs in cross cultural settings with the aim of making improvements in domestics and international markets. This is important given the multinational nature of the target organization.
Samsung Electronics was started as an export business. Since then, it has transformed into an electronic giant, one of the biggest globally. The company specializes in semiconductors, digital appliances, system integration and memory. Samsung Electronics, a subsidiary of Samsung Corporation, is a major player in the consumer electronics, home appliances, and telecommunication equipment and semiconductor industries. Although the flagship company for which Samsung Electronics is a subsidiary was started in 1939, Samsung Electronics as a subsidiary was not established thirty years later in 1969.
Slide Four: Management at Samsung Electronics
The hallmarks of leadership and management at Samsung Electronics include collaboration, creativity and excellence. In keeping with these hallmarks, the company has continued to attract the most talented managers in the global labor markets. The company has also evolved its organizational culture in order to continually offer support to the management team. In December of 2010, Samsung Electronics, after shake up of the management team, the company changed its organizational structure. Under the new changes, the company abandoned the previous system where the company was headed by a single chief executive officer. Under the previous system, the chief executive officer was Choi Gee-Sung. Under the new system, a management team comprising of two people was introduced. The two people management earn comprise do Choi Gee-Sung who doubled as the vice chairman and the chief executive officer and Lee Jae-Yong who doubled as the chief operating officer of the company and its president. The management team was further change in June of 2012 when Samsung Electronics appointed a new chief executive officer in Kwon Oh-hyun.
Slide Five: Management at Samsung Electronics
The changes in the management team were also based on the much needed reorganization of the overseas market bases of Samsung Electronics in recognition of the changes in the global market. Owing to these changes, the company created a subsidiary for the Britain and Continental Europe region and another subsidiary for the China and Taiwan region (The Economic Times. 2012). The new management team under the leadership of Kwon Oh-hyun was seen as younger in terms of outlook and age.
Slide Six: Time Management
Time is a scarce resource for all organizations
The time-scarcity problem has been perennial for organizations for a long. The acuteness of this problem has become even more severe in the recent past, with the increase competition in the global markets and the organizations raising their thresholds for the evaluation of performance. The effect that always-on communications, the pressures that result from the profound economic uncertainties and the increased complexity of the organizations in the contemporary business environment has left chief executive officers feeling that the man-hours in a day are insufficient to complete the work that needs to be done.
The causes of poor time management are in the corporate culture and structures
In order to solve the time-scarcity problem in an organization, chief executive offices should change their approach. Instead of thinking of the problem of time management in the organization as an individual problem, such problems should be addressed from an institutional level. Time management is not merely a personal productivity problem which companies cannot control. time management is an institutional issue which has its root causes deeply entrenched in the corporate cultures and structures. This is fortunate for organizations because it means that that through systemic change, organizations can tackle their time management problems. Some of the proposed approaches include creating time budgets and complimentary and formal processes through which time for these budgets can be allocated. Alternatively, organizational leaders should consider the availability of time when addressing organizational design matters including the spans of control, decision rights and roles. Additionally, the organizational culture of companies can be reformed in order to ensure that the organizational leaders have the incentives, tools and the motivation to institute good management regimes
Slide Seven: Time management
Adoption of a flexible time program
As part of its highlights in the 2008 annual report, the efforts of the organization towards time management includes adopting a flexible time program in the organization in order help the employees maximize their creativity. Under this program, the working schedule of the employees at Samsung Electronics is outside the formal and normal working patterns that are followed by other organizations. This also implies that the working schedule at Samsung Electronics, especially in the design team is not fixed and repetitive as the working hours and schedules in most organizations are. Instead, it involves various variation and changes implying that the employees are not required to work at all times, or report to their work stations.
Monitoring the overtime hours
Samsung Electronics resolved to monitor the overtime hours in order to help their employees improve the quality of their life. This is related to the concept of time banks under the flexible working conditions. The workers could either be paid for the overtime worked, or take time off work in compensation for the overtime hours accumulated. These were important strides towards proper time management in the organization. The adoption of this program at Samsung Electronics was aimed at engineering a shift from the individual time management approach towards an institutional approach in order to enable creativity within the organization. The program was rolled out in a few selected divisions in the company.
In an effort towards time management, Samsung Electronics also instituted work-life balance reforms. This is in recognition o the changing social norms leading to the increase in the number of workers of the female gender who participate in economic activities. As such, business with successful business operations must focus on retaining their high potential employees. The satisfaction and happiness of the employees in any organization is now an overarching value in the quality of life of the employees. This has resulted in increase in the social and institutional interest in striking a balance between work and life
Slide Eight: Quality Management
Improvement in quality vital with the waning dominance
These quality issues are significant because they not only affect the bottom line of the organization, but also its brand reputation, an element of the company that has largely contributed to the continued dominance of the company in various divisions and the upstaging of Apple Inc in the sale of smartphones. One of the most prominent and widespread quality issues affecting the products in the consumer electronics line of Samsung Electronics is the capacitor issues affecting its Liquid-Crystal Display television sets, its plasma television sets and the DLP television sets (Sakr, 2012).
Any Improvements should focus on process improvement
Boepple (2013) considered the quality problems that Samsung Electronics, especially in its mobile communications division. In his argument, Boepple (2013) considered the fact that some of the quality problems that Samsung Electronics faced did not have a single and defined root cause. This implies that the supply chain management, quality assurance, product design, and testing functions of the organization are all implicated in these quality problems. This means that not one single department can be singled out for blame. If the testing and quality assurance functions of the organization did not capture these defects in the products prior to shippment to the market, it is because these problems defects emanated during the production phase. It could also be that the problems emanated from the product design phase or through the raw material which are used during the production of the products. This implication points towards a systemic problem within the organization. As such, any attempts towards solving the quality problems within the organization should focus on business process improvement, operations management, total quality management, and organizational effectiveness
Slide Nine: Quality Management
Review qualitative as well as quantitative data
Boepple (2013) agrees with the concept of process improvement, but also points out the need to focus on market research, particularly the feedback from the customers regarding its products. To this end, Samsung Electronics has customer complaint database which details the various complaints for various items in its portfolio. This information is vital in solving the quality problems within the organization. Boepple (2013) argues that the quantitative data is particularly important in highlighting the extent of the problems, the number of items in its portfolio which are affected and the diverse nature of these quality problems.
In addition to this, Boepple (2013) argues that the qualitative data from the customer complaints in the database and those comments that are posted in the consumer affairs website that is hosted and maintained by Samsung Electronics also paint a picture of the quality problems. In the article by Boepple (2013), Sarni, an employee who has worked with the quantitative data on the customer complaints regarding various items in the product line of Samsung Electronics was concerned with the multitude and the emotional tone and content of the comments by the consumers was particularly disconcerting. The worry is that such comments, especially when they are punctuated with such emotional tone could start a public relations firestorm which is fueled by the social media.
Slide Ten: Cost Management
Cost management is a very important factor in performance of an organization. Cost management has a direct relationship to the bottom lines of an organization. If the sales remain constant, high costs of production reduce the profitability of the organization. This is even more significant when the sales of an organization are dipping and the organization is being upstaged by the competition. Cost management at Samsung Electronics is imperative, especially given the need for the company to remain competitive following the resurgence of Apple Inc. and the cheaper products from the Chinese competitors, and also the recent dismal performance in its finances
Manage costs by reducing preventive costs
Prevention costs include ensuring that the raw material used in the production process is of high quality through seeking the technical support of the suppliers and vendors. Samsung Electronics can also manage the costs associated with quality by improving the skills and knowhow of its managers in the various divisions and its workers through periodic and continued training programs which are customized to meet the training needs of the organization and the employees
Manage costs by minimizing appraisal costs
The appraisal costs that Samsung Electronics may incur include inspecting and testing the incoming materials to ensure that they conform to the quality requirements of the company. Additionally, the company will incur the cost of inspecting and testing the work in progress in order to ascertain that the end products meets the quality requirements of the organization. Other appraisal costs that Samsung Electronics is likely to incur include quality audits and supervision.
Slide Eleven: Cost Management
Manage costs by minimizing internal failure costs
Internal failures costs entail the costs associated with the products that do not conform to the quality standards of the organization. Under this cost, the defects in the product are identified after the production process is complete, but are fixed before the products are delivered to the consumers. The internal failure costs that Samsung Electronics may incur include downtime, scrap, rework, repair and re-testing. One significant cost associated with the internal failure costs is the human resources which are required to carry out the tasks outlined above. Of course this cost can be reduced or eliminated by incurring other costs, such as the process inspection cost (Weil & Maher, 2005).
Manage costs by minimizing internal failure costs
The final cost associated with quality is the external failure cost. These are the costs which Samsung Electronics incurs due to the delivery of poor quality products to the market. The nonconforming products are detected after the batches are shipped to the market and have already been purchased by the consumer. The external failure costs that Samsung Electronics might incur include recalls, replacements, allowances and sales returns, product liability insurance, lost sales, handling customer complaints and lost customers. Samsung Electronics has incurred many of these costs after the widespread quality issues that engulfed many items on its product line between 2012 and 2015.
Slide Twelve: Risk Management
All organizations assume some risks in order to operate their business. There are three ways through which organization can deal with risks of running a business. An organization can either take up the risks. This implies that the organizations assume the costs that come with the risks. Alternatively, an organization can transfer the risk to another partner. Finally, an organization can seek help from organizations whose core business is risk mitigation and management.
The risks associated with suppliers can be solved by using suppliers from different countries. This could come in handy in mitigating the political risk, especially when there are strikes resulting in a shut down in one country. This averts a situation where the supply chain is entirely disrupted, thereby causing delays (Oh, 2004). Although mergers and acquisitions are not common among the big players in the consumer electrics industry, there is still a probable risk that the competitors may complete the merger or acquisition of supplier. The effect of this would be an increase in prices for the competitors, who in this case would be Samsung Electronics. Samsung can mitigate this risk through strategies initiatives. For instance, Samsung Electronics has forged and maintained long and robust relationships with its supplies. The core suppliers of the company are given incentives such as technological and financial assistance.
Slide Thirteen: Risk Management
Capacity risk as it relates to the consumer electronics industry relates to having too much of a product or having too little. Any of these two situations is costly for the company because of misapplied investment and lost sales respectively. It takes time for an organization to increase of building capacity. There is also the question of the location where additional manufacturing plants are located. All these factors pose risks for the organization. This risk can be handled from a strategic perspective
Slide Fourteen: Ethics at Samsung Electronics
Samsung Electronics sees ethical management as a way through which the organization can respond to changes occurring in the business environment globally as well as a vehicle through which the company builds and sustains a relationship of trust with the many stakeholders of the company, including its shareholders, business partners, customers, employees and the local communities in the market where the company has operations. Samsung Electronics, as expressed in many of its responsibility reports, aims to feature highly in the ranking of the most ethical business enterprises globally. In this regards, the company is actively involved in training its employees and also develop and operate systems to monitor ethical compliance in the organization. The company is also keen on practicing transparent and fair corporate management (Samsung Electronics, 2009).
Slide Seventeen: Recommendations
A review of the effectiveness of the ethical management programs and organizations in the company.
Monitor and reform its supply management system
Invest in prevention and appraisal costs in order to successfully reduce the costs and maximize on the profits.