Managing product-harm crises

Investigates the conventional wisdom concerning consumer responses associated with product defect during a product‐harm crisis. Reports on an experiment relying primarily on three generally recognized factors: company′s reputation, external effects from regulatory agencies and the press, and organizational responses. Shows that over‐reliance on these areas may mask hidden variables which can prove counterproductive to crisis abatement.

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“…Success in dealing with a product-harm crisis, as Siomkos [4,5] showed, is influenced by three major primary factors:…”

Section: Conventional Imperativesmentioning

confidence: 99%

“…reports that the troubled company is acting in a socially responsible way in recalling the harmful product [3,5,7].…”

mentioning

confidence: 99%

The Hidden Crisis in Product‐harm Crisis Management

Siomkos

Kurzbard²

1994

European Journal of Marketing

248

244

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“…Product recalls undermine consumer confidence in a firm and its products (Dawar and Pillutla, 2000;Rupp, 2004) and have also been found to negatively affect investor perceptions (Jarrell and Peltzman, 1985;Davidson and Worrell, 1992). Extant literature asserts that firms can manage their stakeholder perceptions and thereby defend their reputations in a variety of ways, such as appropriately timing recalls (Mowen et al, 1981;Siomkos, 1989); strategically handling recall communications (Gibson, 1995;Siomkos, 1999;Coombs, 2007); and offering appropriate restitutions to customers (Davidson and Worrell, 1992).…”

Section: Product Recalls and Time To Recallmentioning

confidence: 99%

Influence of institutional profiles on time to recall

Muralidharan

Bapuji

Laplume

2015

Management Research Review

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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.

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“…This involves a recall process extremely easy for the consumer by offering discount coupons or free samples of other products and by widely advertising the recall [25,43,44]. Therefore, a more vigorous response-the super effort-signals additional concern to the public by providing compensation and increasing communication efforts.…”

Section: Hypotheses Developmentmentioning

confidence: 99%

Mitigating Product Harm Crises and Making Markets Sustainable: How does National Culture Matter?

Samaraweera

Qing

2014

Sustainability

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Product harm crisis has become a serious issue in the business world today irrespective of the crisis mitigating strategies adopted to remedy the harm. The purpose of the study is to determine whether national culture shapes consumer reactions to crisis response strategies as a result of variation of consumers' perceptions the affected firm's moral responsibility. The study considers a comparison of 303 marketing-based Chinese and Sri Lankan students. Findings of independent sample t tests and Analysis of variance (ANOVA) suggested that consumers' moral perceptions vary significantly between China and Sri Lanka in response to crisis response strategies revealing a new insight in the crisis mitigating literature. A wounded company has to launch a super effort response in Sri Lanka whereas the voluntary recall response in China is sufficient in a crisis in order to maintain moral reputation. Moreover, the study reveals that implementation of an inappropriate strategy leads to significant financial and moral reputational loss to a company. Therefore, the study recommends companies choosing culture-specific response strategies in order to protect moral reputational status and to make the market sustainable.

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Managing product-harm crises

Cited by 36 publications

References 6 publications

The Hidden Crisis in Product‐harm Crisis Management

The Hidden Crisis in Product‐harm Crisis Management

Influence of institutional profiles on time to recall

Mitigating Product Harm Crises and Making Markets Sustainable: How does National Culture Matter?

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