On achieving exoneration after a product safety industrial crisis

Abstract

Deals with the management of industrial crises, low-probability, high-impact events which typically affect companies involved in them, negatively. Specifically examines the role of three important factors, i.e. company's reputation, the organizational response that it selects to adopt in order to deal with the crisis, and external effects that are faced during a product safety crisis. Emphasis is placed on determining the effects of an industrial crisis (caused by a harmful product) on the consumers' attributions of company responsibility. It is shown that high reputation companies have generally an easier time dealing with industrial crises. In addition, companies faced with positive external effects and having voluntarily recalled the defects, are held the least responsible for the harm by consumers. Managerial implications are presented for high and low reputation companies involved in product safety crises, with emphasis placed on crisis prevention rather than mere reaction to it.

Effect of Product-harm Crisis on Customer's Based Brand Equity: The Moderating Role of Attitude towards Brand

“…However, compliance will avoid increasing attributions of blame towards the company. These findings are consistent with evidence that negative news bears far more weight than positive news (Dean [63]). …”

“…Knowledge about the company's brand as well as goodwill affect the consumer attitude towards brand (Mowen et al, [48]; Siomkos and Kurzbard, [9]; Dean, [63]; Siomkos and Shrivartara, [50]; Dawar and Lei, [4]), the consumer's brand loyalty during PHC (Cleeren et al, [56]), external factors role in product harm-crisis (Siomkos and Kurzbard, [9] [73]), pre-crisis category advertising and usage (Cleeren et al, [56]), the role of CSR (Klein and Dawar, [57]; Matos and Rossi, [6]), safety measures on the defective products (Griffin et al, [58]), before defects, product recall approach (Matos and Rossi, [6]), and customer's prior perceptions (Dawar and Pillutla, [3]). …”

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

“…Consumers' attitudes are the most important indicator for measuring the effectiveness of crisis management [25]. Effective crisis management involves the consumer's approval of the organizational response and consumer's persuasion that the product is safe again as the company has overcome the crisis [26].…”

The importance of factors influencing product-harm crisis management across different crisis extent levels: A conjoint analysis

“…In involuntary recall, a company takes action only after an agency ' s intervention. Siomkos 28 defi nes involuntary recall as ' simple compliance with the minimum legal requirements ' . Voluntary recall includes the disclosure of information regarding the crisis and the recalling of the product before an agency ' s order.…”

“…Other studies have shown that a company ' s reputation signifi cantly affects the degree to which a company is successful in dealing with the crisis. 16,19,28 Siomkos 28 concluded that companies involved in a crisis are more likely to be held responsible for the defective product if they have a poor reputation. More specifi cally, it has been shown that a highly respected and well-known company is regarded more favourably in cases of product recalls.…”