Influence of institutional profiles on time to recall

Abstract

Purpose – This paper aims to understand why firms expedite or delay product recall decisions involving international sourcing. Design/methodology/approach – This paper combines US toy recall data from the Consumer Products Safety Commission database for the period from 1988to 2011 with World Economic Forum data on institutional environments to predict the effect the host country conditions have on recall timing decisions. Findings – Firms tend to expedite decisions to recall defective products sourced from countries where the informal institutional profile is perceived to be unfavorable for quality manufacture. Research limitations/implications – The reported research is empirical in nature and uses pooled cross-country, single-industry data. Practical implications – Managers should be careful not to allow their biases to affect their product recall timing decisions. Originality/value – Whereas previous research has examined recall timing decisions, this study is the first to consider the institutional environment where products are sourced from as an explanatory variable.

The more I err, the less I pay

“…Then, following Baum and Ingram, 1998;Haunschild and Sullivan, 2002) ------Please insert table 4 about here------Second, we controlled for country of manufacturing as majority of the toys sold in the US are imported from developing economies (Bapuji, 2011). While country of origin has been shown to influence consumer attributions of blame in product recall situations (Carvalho et al, 2015), extant research specifically suggests that import country of origin influences recall timing decisions (Majid and Bapuji, 2018;Muralidharan et al, 2015). Muralidharan et al (2015) characterized institutional unfavorability of the import country and predicted timing decisions.…”

“…They suggested that the more unfavourable the import country's institutions are, quicker are the defective products recalled from the market. We followed the same methodology followed by Muralidharan et al (2015) to create institutional unfavorability and used it as a control. The sample set reduced to 707 recalls as some of the recall notices did not indicate country of import.…”

“…While consequences of time to recall on stock market performance of the firm has been found to be negative (Eilert et al, 2017;Wood et al, 2017), scholars have shown that time to recall is influenced by firm-level factors (e.g., type of defects, supply chain position, recall strategy, and external agency pressure) and crisis factors (e.g., severity) (Eilert et al, 2017;Hora et al, 2011;Ni and Huang, 2017). Country of origin of imported products and components also were found to impact recall timing decisions (Majid and Bapuji, 2018;Muralidharan et al, 2015).…”

“…Outcome Studied Predictor / Context Consequences of recalls -Consumer related Archer & Wesolowsky, 1996 Customer Behavior Product-harm crisis Ahluwalia et al, 2000 Consumer Behavior and Sales Negative Information through product crisis Dawar & Pillutla, 2000 Brand-Equity Firm Response in product-harm crisis Klein & Dawar, 2004 Consumer Attributions CSR initiatives of firm in harm crisis Van Heerde et al, 2007 Sales and Marketing effectiveness Product-harm crisis Cleeren et al 2008 Consumer Behavior and Sales Advertising in harm crisis context Rubel et al 2011 Consumer Behavior and Sales Advertising in harm crisis context Zhao et al, 2011 Consumer Behavior and Sales Quality signals from harm crisis context Cleeren et al, 2013 Consumer Behavior Post crisis advertising Germann et al, 2014 Consumer Behavior Recalls and brand commitment Liu & Shankar, 2015 Consumer Behavior Brand preference and advertising effectiveness Borah & Tellis, 2016 Consumer Spillover Effects Online chatter about recalls Muralidharan et al, 2015 Time to recall Country of import Eilert et al, 2017 Time to recall Severity and brand characteristics Ni & Huang, 2017 Time to recall External, suppliers, design, models, experience Majid & Bapuji, 2018 Time to recall Country of import Liu et al, 2016 Remedial…”

Socially Responsible Practice and CSR Orientation of Chinese Managers: The Role of Confucian Ethics and Confucian Dynamism

“…Corporate social responsibility (hence CSR) practice, defined as voluntary policies, practices, and programs that go beyond narrow economic and legal requirements, have drawn worldwide attention in recent years [1][2][3][4]. Businesses today are well aware that they are expected to simultaneously address economic, environmental, and ethical-social concerns, that is, contribute to the triple bottom lines [5].…”