Supply chain in the C-suite: the effect of chief supply chain officers on incidence of product recalls

Abstract

Purpose This study aims to investigate the extent to which the presence of chief supply chain officers (CSCOs) in top management teams (TMTs) helps firms to reduce the incidence of product recalls. Design/methodology/approach The authors identified all recalls for the period 2010–2017 issued by publicly held firms regulated by the US Consumer Product Safety Commission. These data were subsequently combined with information on TMT composition from BoardEx and financial performance data from Compustat to create a unique data set. Findings The study identified a significant and negative association between CSCO presence and incidence of product recalls. The evidence also supports the conjecture that this association is stronger in larger firms, indicating that CSCOs are especially effective when operating within more complex supply chains. Practical implications The findings provide important insights into quality management in contemporary supply chains and indicate that assigning specific responsibility for supply chain management to a TMT member improves product reliability. Originality/value These findings contribute to the growing literature on the underlying causes of a product recall by identifying corporate governance antecedents of external quality failures of this kind.

Supply chain and operations management on the TMT: A study of recall propensity

“…Firms can send a strong signal to the market that they are serious about improving quality by creating SCOM roles on the TMT and hiring SCOM-experienced CEOs. We also join the growing literature indicating that SCOM representation on the TMT is an important driver of organizational strategy and has real world implications to quality and other outcomes (Körber & Cotta, 2021;Kumar et al, 2020;Kumar & Paraskevas, 2018).…”

“…However, the manner in which SCOM representation in the TMT might affect firm‐level supply chain outcomes has not been well studied. This study adds to the growing stream of literature exploring the presence of SCOM representation among top executives (Hendricks et al, 2014; Körber & Cotta, 2021; Kumar et al, 2020; Kumar & Paraskevas, 2018; Roh et al, 2016; Wagner & Kemmerling, 2014) by investigating the effects of their presence on product recalls.…”

“…Wowak et al (2020) linked the gender composition of the board of directors to recalling, and, most recently, Mayo et al (2022) found that recalls are more likely early in a CEO's tenure. While these previous studies have given us valuable insights into the nexus between operational issues and quality failures as manifested through recalls, the role of TMT supply chain functional expertise in influencing product recalls has only received sparse attention (e.g., Körber & Cotta, 2021).…”

The Incidence of Information Technologies on the Profitability of Service Firms

“…Por otro lado, Melville, Kraemer y Gurbaxani [25] explicaron que las TI conectan las diferentes empresas a través de la fusión de negocios y la búsqueda ágil de proveedores y clientes [7]. Por lo tanto, dentro del contexto del desarrollo e implementación de las TI, es necesario incluir al recurso humano tanto de la coordinación de actividades internas como de la organización externa a la empresa [22], [31].…”

The Incidence of Information Technologies on the Profitability of Service Firms

“…On the other hand, Melville et al [14] explained that IT connects different companies through business mergers and the agile search for suppliers and customers [15]. Therefore, within the context of the development and implementation of IT, it is necessary to include human resources both for the coordination of internal activities and for the organization external to the company [16]. Finally, Ghobakhloo et al [13] revealed that the implementation and application of IT is a major driver behind many socioeconomic changes.…”