Competition can be a motivation to compromise on quality and focus more on the result of a product than the actual process of making it. Most firms, both local and international, have sometimes had to take responsibility for irresponsible actions resulting from competition and posing a considerable danger to clients. In most cases, the strategies used are a quick fix and not as long-term as expected. Internationally, some firms and brands have faced competition that pushed them to compromise on quality and ended up having lawsuits and a lot of money lost to recalling or working towards lifting a ban and compensation. However, there is a thin line between competition and ethics that causes business dilemmas when faced with scandals. Moreover, social responsibility is vital to ensure that societal values are upheld to minimize unhealthy competition and crime.
Competition and Ethics
Competition has both pros and cons for the extremities. Most competition is meant to be healthy and help businesses enhance services or grow. However, some forms of competition can be fatal when quality is compromised. Most firms are quick to grab any slight opportunity that gives them an advantage over competitors to make sales rise (Ferrell et al., 2019). However, if aggressive competition leads to a brand’s defamation, companies should learn to be careful about how they ensure that healthy competition is upheld (Ferrell et al., 2019). More robust policies should be put in place to ensure that employees, especially the marketing team, do not act unfairly or make mistakes that can cost an entire brand. For instance, according to Rhodes (2016), Volkswagen lied to the US authorities regarding fuel emission which cost them to recall over two million vehicles in a short span.
Firms are expected to have operations in ethical ways that protect society and maintain the standard set by the quality assurance teams. Sometimes strict adherence to ethics and standardization rules is time-consuming and expensive, but rectifying a cheap mistake can also be costly. Also, society plays a vital role in a company’s growth (Ferrell et al., 2019). Good relations between a firm and society contributes to the word of mouth advertising, making sales, and having loyal clients. However, once society realizes a compromise in quality or a breach in ethics, the losses are equally numerous due to lousy human relations (Ferrell et al., 2019). Samsung lost numerous clients to having faulty phones forcing clients to shift to other brands.
Expansion and growth are exhilarating for companies, and most firms aim to increase sales per financial year to gain a competitive advantage. However, research proves that companies are most likely to engage in ethical misconduct as they attempt to outpace rivals (Sroka & Szántó, 2018). This is mostly attributed to the short time needed during a supposed competition or deadline to be met. Samsung should develop a strategy to have healthy competition that encourages progress without having ethical misconduct rather than compromising quality to survive rivalry. Corporates should ensure compliance with all legal directives during competitions to avoid future cases of misconduct.
Business expansions should be strategic, not competitive, to reduce unhealthy struggles to lead. Most firms and brands have strategic plans that give them timelines of plans and product launches (Sroka & Szántó, 2018). Samsung entangled its strategic plan to align with its competitors, which gave them pressure to deliver. The pressure may have caused the production team to reduce the time taken to make phones to beat the deadline.
Impact of Unfair Competitions on Brand
The Samsung case scenario may have two sides to their public relations disaster, as explained. Perhaps, the company has been producing good Android phones but still targeted to beat iPhone 7 release date (Sroka & Szántó, 2018). Most companies rush to overtake a competitor’s milestones, which exacerbates the rate of engaging in ethical misconduct. Corporates should learn to compete in a manner that does not pose a risk to clients or potential clients pursuing competitive decisions should be logical to ensure that mistakes resulting in competitive pressure are avoided (Sroka & Szántó, 2018). Further, creating a healthy environment that allows creative competition is essential. Samsung should have sought immediate resolutions when several complaints were noted before airplanes banned the phone.
Unfair competition is a catalyst for bad public relations for a company or brand. The recovery of bad public relations for businesses is costly. For instance, Samsung had to recall phones, reduce annual sales, and cover massive victims’ massive lawsuits (Robertson et al., 2016). By the time the company owned up to its mistake, several warnings against it had been made to potential clients. The brand lost many clients to other mobile phones to ensure their safety (Robertson et al., 2016). The millions of dollars lost in recalling and compensation may take a while to recover.
Companies should mostly focus on customer safety and satisfaction as Samsung did when they accepted their mistake. Further, each firm should be responsible for its products and admit to acting ethically irresponsible when products in the market cause harm to society. Competition should not result in the production of substandard products. Firms should focus on making quality products and not focus on quantity during healthy competitions. Lastly, Samsung was right to focus on customer safety and satisfaction by compensating their customers.
Ferrell, O., Harrison, D. E., Ferrell, L., & Hair, J. F. (2019). Business ethics, corporate social responsibility, and brand attitudes: An exploratory study. Journal of Business Research, 95, 491-501. Web.
Rhodes, C. (2016). Democratic business ethics: Volkswagen’s emissions scandal and the disruption of corporate sovereignty. Organization Studies, 37(10), 1501-1518. Web.
Robertson, D. C., Voegtlin, C., & Maak, T. (2016). Business ethics: The promise of neuroscience. Journal of Business Ethics, 144(4), 679-697. Web.
Sroka, W., & Szántó, R. (2018). Corporate social responsibility and business ethics in controversial sectors: Analysis of research results. Journal of Entrepreneurship, Management and Innovation, 14(3), 111-126. Web.