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Discuss the 4G Model and the purpose firms must have beyond the products they sale or the service they provide. Pretend you are the executive officer at Samsung responsible for not releasing the Galaxy Fold, what would be your response to shareholders and customers regarding the failed product. Use the economic theory and concepts in chapter one to support your response. Remember the idea is to maximize the wealth of shareholders but also be socially responsible to the community that must sustain your product.

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The 4G Model of corporate social responsibility (CSR) emphasizes that companies should go beyond profit maximization, integrating social, environmental, and ethical considerations into their core strategies. As Harish Manwani suggests in “Profits not always the point,” firms are increasingly recognizing that long-term profitability depends on their social license to operate and their commitment to the broader community. Similarly, Samsung’s delay in launching the Galaxy Fold after screen failures highlights the importance of balancing shareholder wealth with corporate social responsibility (CSR).

From an economic perspective, the primary objective of firms, according to classical theory, is profit maximization. However, modern economic and managerial theories recognize that firms operate within a socio-economic environment where stakeholders—including customers, employees, regulators, and communities—play a vital role in sustainable success (Freeman, 1984). The 4G Model extends this view by stressing that firms must incorporate governance, goodness, and growth alongside profitability. For Samsung, this means ensuring product quality and safety to protect consumers and uphold the company’s reputation, which ultimately sustains shareholder value.

In response to the Galaxy Fold’s issues, as an executive, I would address shareholders and customers openly. I would emphasize that safety and quality are paramount, and that halting the launch aligns with our commitment to responsible innovation. According to economic theory, balancing cost, quality, and stakeholder interests ensures long-term profitability—an ideal that the postponement supports by preventing potential costly recalls, lawsuits, and brand damage (Porter & Kramer, 2006). It demonstrates that Samsung values its social license and aims to build trust with consumers, which are essential for sustained economic success.

Moreover, emphasizing that this decision aligns with the 4G Model shows that Samsung recognizes its societal obligations. Consumers today expect transparency and corporate accountability; thus, prioritizing product integrity fosters loyalty and reduces reputational risk (Elkington, 1997). This responsible approach corroborates the idea that profits are important but not the sole purpose of a firm; rather, they should be part of a broader framework that includes social responsibility, ethics, and environmental sustainability.

In conclusion, by embracing the 4G Model and economic principles, Samsung’s decision to delay the Galaxy Fold relaunch underpins a strategy that aims to maximize long-term shareholder wealth while being socially responsible. This approach secures the company’s reputation, ensures consumer safety, and supports the community—thus aligning corporate success with societal well-being.

References

• Elkington, J. (1997). Cannibals with forks: The triple bottom line of 21st century business. New Society Publishers.
• Freeman, R. E. (1984). Strategic Management: A Stakeholder Approach. Pitman.
• Porter, M. E., & Kramer, M. R. (2006). Strategy & Society: The Link Between Competitive Advantage and Corporate Social Responsibility. Harvard Business Review, 84(12), 78–92.
• Manwani, H. (2013). Profits not always the point. Harvard Business Review.
• Gurman, M., & Kim, S. (2019). Samsung delays launch of Galaxy Fold after screen failures. Bloomberg.