How Should a Company Respond to a Product Harm Crisis? ((Located in e-reserves module))
Product harm crises such as Vioxx and Firestone can be devastating events for companies. Although lawsuits by victims tend to draw most of the attention, observers, who typically learn of product harm crises through media outlets, can also cause extensive damage to the companies involved, as they represent current and potential customers of the product.
Daniel Laufer and W. Timothy Coombs “How Should a Company Respond to a Product Harm Crisis? The Role of Corporate Reputation and Consumer-based Cues,” Business Horizons, September-October 2006, pp.379-385.
When the chief executive of Maclaren USA learned about a rise in injuries to children's fingers involving the hinges on his strollers--which were similar to those used for almost all strollers on the market--he and his colleagues immediately began working with the U.S. Consumer Product Safety Commission to plan a voluntary "recall," during which the company would send protective hinge covers to anyone who wanted them.
A personal narrative is presented which explores the author's experience as Timberland Company's chief executive officer at a time when the Greenpeace International organization's activists were pressuring Timberland's Brazilian supplier.