What Drives a Firm's Choice of Product Recall Remedy? The Impact of Remedy Cost, Product Hazard, and the CEO

2016 ◽  
Vol 80 (3) ◽  
pp. 79-95 ◽  
Author(s):  
Angela Xia Liu ◽  
Yong Liu ◽  
Ting Luo
Keyword(s):  
Product Recall ◽  
The Impact

Labor Unions and Product Quality Failures

2021 ◽  
Author(s):  
Omesh Kini ◽  
Mo Shen ◽  
Jaideep Shenoy ◽  
Venkat Subramaniam
Keyword(s):  
Product Quality ◽  
Labor Unions ◽  
Product Recalls ◽  
Employee Morale ◽  
Product Recall ◽  
Quality Outcomes ◽  
Panel Regressions ◽  
Broad Cross Section ◽  
Operating Leverage ◽  
The Impact

In this paper, we study the impact of labor unions on product quality failures. We use a product recall as our measure of quality failure because it is an objective metric that is applicable to a broad cross-section of industries. Our analysis employs a union panel setting and close union elections in a regression discontinuity design framework to overcome identification issues. In the panel regressions, we find that firms that are unionized and those that have higher unionization rates experience a greater frequency of quality failures. The results obtain even at a more granular establishment level in a subsample in which we can identify the manufacturing establishment associated with the recalled product. When comparing firms in close elections, we find that firms with close union wins are followed by significantly worse product quality outcomes than those with close union losses. These results are amplified in non–right-to-work states, where unions have a relatively greater influence on the workforce. We find that unionization increases firms’ costs and operating leverage and, consequently, crowds out investments that potentially impact quality. We also find some suggestive evidence that unions may compromise quality by hurting employee morale and by resisting technological upgrades in the firm. Overall, our results suggest that unions have an adverse impact on product recalls, and thus, product quality is an important dimension along which unions impact businesses. This paper was accepted by Gustavo Manso, finance.

scholarly journals Institutional differences and integration difficulties

2018 ◽  
Vol 35 (5) ◽  
pp. 850-868 ◽  
Author(s):  
Kashef A. Majid ◽  
Hari Bapuji
Keyword(s):  
Product Quality ◽  
Failure Time ◽  
Accelerated Failure Time Model ◽  
Local Market ◽  
Product Recall ◽  
Content Type ◽  
Starting Point ◽  
Institutional Differences ◽  
The Usa ◽  
The Impact

PurposeThe purpose of this paper is to examine how the location of a firm’s headquarters and component sourcing impact a firm’s responsiveness in a product-harm crisis in local market.Design/methodology/approachThe authors collected data on 1,251 vehicle recalls from 12 manufacturers, six in the USA, three in Germany, and three in Japan. All of the recalls occurred in the USA between 2002 and 2010. The time the product was first released into the marketplace was used as the starting point while the time the recall was initiated (if at all) was used to record the probability of the product recall over time. Specifically, a survival analysis with an accelerated failure time model was employed to examine the speed with which a product is recalled. The authors examined the impact of foreign composition using information provided by the American Automobile Labeling Act, which lists the proportion of each vehicle that is composed of domestic parts (USA/Canada) and foreign parts. Organizational characteristics (i.e. size, market share, assets, net income, and reputation) and recall size (i.e. number of affected vehicles) that might have an effect on time to recall were controlled for.FindingsThe authors found that firms headquartered outside the local market would take longer to issue a product recall than firms that were headquartered in the local market. Firm headquartered outside the local market can reduce the time taken to recall by sourcing parts from the local marketplace, rather than from abroad. Interestingly, even local firms are affected by the location of component sourcing, such that they take longer to issue a recall if they sourced parts from abroad.Originality/valueResearch in international marketing has examined the benefits of integration to firms, but has not studied the risks of integration. By highlighting the challenges of managing institutional differences and integration difficulties, the authors show that location of headquarters and the location from where components are sourced have an effect on firm responsiveness in product-harm crises. Further, the authors build on the global supply chain management literature that has shown the effect of upstream activities (i.e. foreign production) on downstream activities (i.e. product quality). Specifically, the authors show that upstream activities can not only affect product quality, but also the ability of firms to respond to those product qualities in a timely fashion.

scholarly journals All Supply Chains Don't Flow Through: Understanding Supply Chain Issues in Product Recalls

2008 ◽  
Vol 4 (2) ◽  
pp. 167-182 ◽  
Author(s):  
Marjorie A. Lyles ◽  
Barbara B. Flynn ◽  
Mark T. Frohlich
Keyword(s):  
Supply Chain ◽  
Supply Chains ◽  
Current Situation ◽  
Future Research ◽  
Product Recalls ◽  
Product Recall ◽  
Flow Through ◽  
Research Questions ◽  
The Impact

Our paper conceptualizes and highlights the role of the supply chains in China's product recall problems. We raise questions about the interrelationships of the focal manufacturer and the supplier firms and the consequences of these relationships. We address some of the causes of the current situation, including a discussion of deep supply chains, the importance of relationships, the role of trust and the impact of cultural misunderstandings. We suggest many future research questions to further understand how the supply chain can cause or deter product recalls.

EXPRESS: Regulating Product Recall Compliance in the Digital Age: Evidence from the “Safe Cars Save Lives” Campaign

2021 ◽  
pp. 002224292110230
Author(s):  
Sotires Pagiavlas ◽  
Kartik Kalaignanam ◽  
Manpreet Gill ◽  
Paul D. Bliese
Keyword(s):  
Media Coverage ◽  
Digital Marketing ◽  
Regulatory Agencies ◽  
Product Recalls ◽  
Product Recall ◽  
Before And After ◽  
Empirical Context ◽  
The Impact ◽  
The U.S

The unprecedented number of product recalls in recent years and subsequent low consumer recall compliance raise questions about the role of regulatory agencies in ensuring safety. In this study, the authors develop a conceptual framework to test the impact of a regulator-initiated digital marketing campaign (DMC) on consumer recall compliance. The empirical context is the launch of a nationwide DMC by the U.S. automobile industry’s regulator. The analysis utilizes recall completion data from 296 product recalls active both before and after the DMC’s launch. The results show that the DMC improves consumer recall compliance. In the first four quarters after it was introduced, the DMC increased the number of vehicles fixed, on average, by 20,712 per recall campaign over what was to be expected without the DMC. Regarding boundary conditions, the study finds that the DMC is more effective for recall campaigns with greater media coverage and for those with older recalled products. However, the DMC’s effect is weaker as the time needed to repair a defective component increases. The findings should help regulators make compelling cases for greater resource allocation toward digital initiatives to improve recall compliance.

scholarly journals Looking Deeper into the Galaxy (Note 7)

2017 ◽  
Author(s):  
Melanie J. Loveridge ◽  
Guillaume Remy ◽  
Nadia Kourra ◽  
Ronny Genieser ◽  
Anup Barai ◽  
...  
Keyword(s):  
Short Circuit ◽  
Product Recall ◽  
Total Product ◽  
The Galaxy ◽  
The Media ◽  
Li Ion ◽  
Consumer Device ◽  
Battery Energy ◽  
The Impact ◽  
Field Failure

Li-ion cell designs, component integrity and manufacturing processes all have critical influence on the safety of Li-ion batteries. Any internal defective features that induce a short circuit, can trigger a thermal runaway: a cascade of reactions, leading to a device fire. As consumer device manufacturers push aggressively for increased battery energy, instances of field failure are increasingly reported. Notably Samsung made a press release in 2017 following a total product recall of their Galaxy Note 7 mobile phone, confirming speculation that the events were attributable to the battery and its mode of manufacture. Recent incidences of battery swelling on the new iPhone 8 have been reported in the media, and the techniques and lessons reported herein may have future relevance. Here we look deeper into the key components of one of these cells and confirm evidence of cracking of electrode material in tightly folded areas, combined with a delamination of surface coating on the separator, which itself is an unusually thin monolayer. We report microstructural information about the electrodes, battery welding attributes and thermal mapping of the battery whilst operational. The findings point to the most likely combination of events and highlights the impact of design features, whilst providing structural considerations most likely to have led to the reported incidences relating to this phone.

scholarly journals PENARIKAN MEREK PRODUK: EFEK INDUSTRI, STRATEGI PENARIKAN DAN BAHAYA PADA KEKAYAAN PEMEGANG SAHAM

2020 ◽  
Vol 18 (3) ◽  
pp. 521-535
Author(s):  
Dwi Dewianawati
Keyword(s):  
Supply Chains ◽  
Share Price ◽  
Product Recalls ◽  
Manufacturing Companies ◽  
Product Recall ◽  
Factors Affecting ◽  
Pharmaceutical Markets ◽  
Study Process ◽  
Major Factors ◽  
The Impact

The purpose of this paper is to provide insight into the impact of product recalls on manufacturing company shareholders in various supply chains. Previous research investigating this phenomenon was dominated by sectoral units and/or did not recognize threat interactions, policy recalls and sectors. Using the case study process, the study explored investor responses to key market product recall characteristics, recall policies and hazard levels, in a cross-industry survey of 295  product recall notices. The findings revealed a strong negative response from the share price to product recalls and a significant variation between the type of business and its level of danger. More controlled and tighter supply chains, such as the car and pharmaceutical markets, have shown statistically substantial share price declines. The findings suggest that the business sector and the level of harm associated with defective goods are major factors affecting the shareholders of manufacturing companies. Contrary to some reports, the effects of the recall policy have not been verified, although the recall campaign has proactively, in some cases, contributed to the rise in the share price. This  study will further benefit from a more thorough investigation of recall strategies on business assessments in certain industries, especially those vulnerable to regular and expensive product recalls.

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