How Do I Fix This? Managing a Product-Harm Crisis (original) (raw)
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How do I fix this? Managing Product Harm Crisis
According to Klein and Dawar (2004) a product related crisis is one where a product is found to be flawed or dangerous. In this situation, as Siomkos & Kurzbard (1994) indicate, there is potential harm not just in terms of company reputation, media influence and external agency reports but also in how these factors influence customer views, a perspective also noted by Dean (2004). This paper examines the factors that impact on how a product harm crisis develops with the aim of understanding how it can best be handled by an organization.
Communicating in Product Harm Crises: Do the Right Thing
Journal of Food Science and Engineering, 2019
Food recalls can have very serious aftermath from many points of view: starting from the outbreak consequences on public health, on company's reputation, sellout , finance, up to putting at risk the survival of the firm itself. From a formal point of view, a product harm crisis presents similarities with other emergency situations: both of them consist in unpredictable events, often due to unknown or undervalued causes, which can significantly alter normal business and compromise the safety of the company, of its employees and customers. Given the potential damage resulting from a dangerous product crisis, it is surprising that in the food industry alongside mere procedures (often reducible to botched manuals compiled solely because their presence reassures auditors and authorities) there is still little attention to an approach based on a method. Formal corporate procedures (manuals and crisis management plans) are important, but can cause a false sense of security and preparedness, if executives do not possess an adequate crisis management culture, which depends, as well as on experience and training, also on the ability to assume the correct behavioral posture, and which involves psychological, organizational and communicational skills that can not be undervalued. The purpose of this article is to provide a practical approach based on the experience of crisis-management (applied in emergency situations by health professionals, armed forces and civil protection) useful to support food industry during a food recall, in order to avoid the most classic errors that can undermine speed of reaction, corrective measures effectiveness and leadership, in the most delicate moments for a company life. If it is true the way a firm manages the recall affects its impact, it is necessary to assess the fundamental factors to be observed at such times: timeliness, lucidity, responsibility, leadership.
Product harm crisis hinders firms' reputation and financial viability. Recent research has shown that in a product harm crisis late response and compulsory product recall hinders businesses reputation (Jolly & Mowen, Mowen & Ellis, Siomkos Jolly 1999). It has been concluded that consumer tastes and preferences fades out and consumers are not motivated to buy the new product that is developed to replace the recalled one (Jolly 1999). Businesses are more prone to risk than ever before to product related issues and challenges causing supply chain disruptions. To find meaningful solution to this risky and vulnerable situation, businesses should find a lastly and sustainable solution to businesses reputation and financial viability. A result oriented and focused management team thrives in all seasons and act swiftly with appropriate tools and techniques to crisis management. In this review, the researcher harmonized secondary data showing product harm crisis management modalities and parameters. With reference to the review literature, concepts, contents, facts; the researcher differentiates parameters, models used and interprets findings. Advice businesses on managing product harm crisis effectively and efficiently with proper planning and mitigation strategies in place.
Crisis management practices and approaches: Insights from major supply chain crises
: Recent market trends, such as outsourcing and globalization, have made supply chains more exposed to disruptive external incidents, such as catastrophic man made events and natural disasters. Globalization favors the expansion of the supply chain across national borders; a fact that can transform even much smaller incidents to organizational crises (Manuj & Mentzer, 2008). More and more, stakeholders are being implicated in contemporary supply chains and when a crisis occurs it has to be faced timely, otherwise the consequences can get out of proportions (Randall & Farris, 2009). Lately, organizations try to make proactive planning to enhance decision making in the time of a crisis, but still no specific guidelines, either from literature or practitioners, exist about supply chain crisis management (Hittle & Leonard, 2011). In this paper, we try to identify specific processes and practices that make enterprises successfully confront supply chain crises or drive them to failure by studying major crises incidents as reported in the literature. In doing so, indicative case studies are studied and the business practices are examined, analyzed and discussed.
An Entrepreneur's Personal Value Perspective in Managing Product Harm Crises
Product harm crises often reflect the outcomes of firms’ unethical business decision-making behaviours. Literature showed that the majority of crisis management studies have paid high attention for finding strategies from the consumer’s perspective. Hence, the purpose of present study is set to conceptualise the impact of an entrepreneur’s personal values on making ethical business decisions to fill the empirical gap that has been arisen from a firm’s perspective. A systematic approach was followed to review the crisis management literature and to examine the current status of product harm crisis management strategies in scholarly accepted databases. The analyzed content found that the relationship among the variables of entrepreneur’s personal values, firm’s attitude towards fulfilling the corporate social responsibilities, and the ethical decision-making behaviour can be explained through the value- attitude-behaviour hierarchy model. Some propositions have been suggested as future research directions for academia and it is believed that the present study finding is a pre-requisite for the content provision from a firm’s perspective in product harm crisis management study context.
Asian Consumers' Purchasing Behavior during Product Harm Crises
2016
Purchase behavior during product harm crisis decides the sustainability of a business. This study focuses on young consumers in Sri Lanka (n= 100) and China (n=101). Results related to the fictitious company controllability and the consumer controllability crises situations revealed that company controllable crisis affects significantly on purchase intention of the crisis brand. Therefore, study suggests implementing country specific crisis mitigating strategies in particular in product harm crises, where the controllability is in company's side. Current study provides new insights for companies in particular for multinational companies to stand in midst sudden and unexpected product harm crises.
Supply Chain Management: An International Journal, 2020
Purpose Does internal integration extend to business continuity and to managing supply chain disruptions (SCDs)? Despite the voluminous literature on supply chain integration, evidence on its effectiveness on risk management and disruption response is scant. The purpose of this paper is to assess the effectiveness of business continuity management (BCM) and of supply chain involvement in BCM (SCiBCM) on reputational and operational damage containment in the face of SCDs. Design/methodology/approach This study draws on Simons’ Levers of Control framework to explain how the involvement of supply chain in BCM affects firm capabilities in containing damages caused by major SCDs. The authors develop and test hypotheses by analyzing large-scale questionnaire responses from 448 European companies. Findings Results of the data analysis suggest that BCM improves reputational damage containment, whereas SCiBCM improves operational damage containment. The findings also show that the significan...
Rising from the Ashes: How Brands and Categories Can Overcome Product-Harm Crises
Journal of Marketing, 2013
Product-harm crises are omnipresent in today's marketplace. Such crises can cause major revenue and marketshare losses, lead to costly product recalls, and destroy carefully nurtured brand equity. Moreover, some of these effects may spill over to nonaffected competitors in the category when they are perceived to be guilty by association. The extant literature lacks generalizable knowledge on the effectiveness of different marketing adjustments that managers often consider to mitigate the consequences of such events. To fill this gap, the authors use large household-scanner panels to analyze 60 fast-moving consumer good product crises that occurred in the United Kingdom and the Netherlands and resulted in the full recall of an entire variety. The authors assess the effects of postcrisis advertising and price adjustments on the change in consumers' brand share and category purchases. In addition, they consider the extent to which the effects are moderated by two key crisis characteristics: the extent of negative publicity surrounding the event and whether the affected brand had to publicly acknowledge blame. Using the empirical findings, the authors provide context-specific managerial recommendations on how to overcome a product-harm crisis.
Product Harm Crisis, Attribution of Blame and Decision Making: An Insight from the Past
Review of product harm crises show that it affects consumers' attitudes, beliefs and future intentions about the product. Researchers stress to know how consumers respond and attribute blame for product harm crisis, role of media, its spillover effect and how the managers analyze and respond to product harm crises. Based on the review, it is concluded that the role of demographic factors in various aspects of product harm crises is a neglected area. A comprehensive research is needed to understand how the demographic characteristics of consumers, managers and firm owners affect the reaction towards product harm crisis.