Post by Sapphire Capital on Aug 11, 2008 21:18:44 GMT 4
A Strategic Analysis of Product Recalls: The Role of Moral Degradation and Organizational Control
Yadong Luo
University of Miami - School of Business Administration
Management and Organization Review, Vol. 4, Issue 2, pp. 183-196, July 2008
Abstract:
Although product recalls are neither new nor unique to China, China bears much of the bitter criticism from the media and negative reactions from the public. This essay discusses the reasons behind recalls from a moral degradation perspective, grounded in the larger framework of anomie theory. While making remarkable economic progress, China is also moving toward a society with degraded moral standards. This moral degradation propels illicit and immoral business practices. This essay further presents an analysis of recall from the organizational control perspective, tackling the issue of how safety and quality problems damage a firm's long-term corporate credibility, legitimacy, trust and governance in a competitive environment. Strategic repercussions of recalls include impairing capability building, organizational learning and resource allocation. The essay ends with a call for action by the Chinese government, firms and management researchers to address and further understand this complex issue.
papers.ssrn.com/sol3/papers.cfm?abstract_id=1158770
Yadong Luo
University of Miami - School of Business Administration
Management and Organization Review, Vol. 4, Issue 2, pp. 183-196, July 2008
Abstract:
Although product recalls are neither new nor unique to China, China bears much of the bitter criticism from the media and negative reactions from the public. This essay discusses the reasons behind recalls from a moral degradation perspective, grounded in the larger framework of anomie theory. While making remarkable economic progress, China is also moving toward a society with degraded moral standards. This moral degradation propels illicit and immoral business practices. This essay further presents an analysis of recall from the organizational control perspective, tackling the issue of how safety and quality problems damage a firm's long-term corporate credibility, legitimacy, trust and governance in a competitive environment. Strategic repercussions of recalls include impairing capability building, organizational learning and resource allocation. The essay ends with a call for action by the Chinese government, firms and management researchers to address and further understand this complex issue.
papers.ssrn.com/sol3/papers.cfm?abstract_id=1158770