The former chair and CEO of Medtronic said the company would be wise to publicly apologize to its U.S.-based customers and possibly even appear before Congress to avoid severe repercussions.
"Look, companies have problems, they have difficulties, but you better get the fix right. They didn't have their engineers get to the root cause, no one came to the U.S. to find out what the real problems were," George, who is a senior fellow at Harvard Business School, said on CNBC's "Squawk on the Street" on Wednesday.
And, if the company doesn't deal with this crisis effectively, George said the electronics giant could end up just like Volkswagen — with "tremendous damage to a great brand."
Looking forward, Samsung has halted production of the Galaxy Note7 entirely, leaving a 25-million-phone gap in its business that other smartphone producers are eager to fill, technology analyst Toni Sacconaghi says.
George said the company is likely to lose a large portion of its shares to LG Electronics, Huawei and Google when its Android smartphones hit the market.
Sacconaghi, Alliance Bernstein's senior technology analyst, said that historically, it is unlikely Android users would be willing to switch to a new operating system like Apple's.