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Doctoral Study Submitted in Partial Fulfillment of the Requirements for the Degree of
Doctor of Business Administration
Walden University xxx ABSTRACT Product-harm crisis situations have increased in frequency no matter which business is targeted and has a negative effect on its operation. In many instances products can be released as defective or pose a health or safety risk to its users. It could affect the whole lot of production or a small segment of the company’s products at large. The manifestation of such an issue can cause a reduction in sales along with the increase in costs involved in recalling the products affected. This could also prove harmful to the company’s brand and reputation. Challenges pop up and one crisis is to regain the customer’s trust and the reinstatement of the company’s brand as one to be sought after and be proud of. Product-harm crisis situations can be either addressed proactively or passively to their existence. How a company chooses to address this situation determines the effect on their bottom line. This paper addresses what constitutes a product-harm crisis and the potential effect and suggested response from the organization at hand.
INTRODUCTION A product-harm crisis is defined as “A highly publicized event caused by a product being found to be defective, contaminated or even harmful to consumers” (1). “A crisis is an event developed through complicated processes that causes extended damages and potentially affects an entire organization” (2). “Crises are often difficult to anticipate and, realistically, to prevent; this is why many researchers emphasize on pre-crisis management practices such as risk analysis, efficient training of crisis management units and so on” (2). The magnitude of importance intensifies when the actions of a company responding to a product-harm crisis fails. The negative effect on the competitive
References: (1) Lexicon Financial Times, 2014 http://lexicon.ft.com/Term?term=product_harm-crisis (2) Vassilikopoulou, Aikaterini, Apostolos Lepetsos, George Siomkos, and Kalliopi Chatzipanagiotou. "The Importance of Factors Infl Uencing Product-harm Crisis Management across Different Crisis Extent Levels: A Conjoint Analysis." Walden Library Business Source Complete. Journal of Targeting, Measurement & Analysis for Marketing, 10 Dec. 2008. Web. 27 Jan. 2014. (3) Chen, Yubo, Shankar Ganesan, and Yong Liu. "Does a Firm’s Product-Recall Strategy Affect Its Financial Value?" Walden Library Business Source Complete. Journal of Marketing, 1 Nov. 2009. Web. 1 Feb. 2014.