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WHICH FIRMS ARE LIKELY TO SUFFER PRODUCT RECALLS? THE ROLES OF COMPETITION AND CONGESTION IN LEADING TO RECALLS

Managing the firm’s product line offerings is one of the most important tasks that managers undertake. The composition and quality of the products that the firm offers significantly affect its market share, reputation, and ultimately, the organization’s financial performance and prospects for survival in the market. Managing product lines, moreover, is difficult, and both development and maintenance of product lines require financial and human resources to be deployed (Carroll 1984; Sanderson and Uzumeri 1997). The uncertainty and difficulty of managing product lines occasionally results in product defects which in turn can lead to the firm suffering a product recall, which can impact both the firm’s reputation and finances (Rhee and Haunschild 2003).