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Oops! I did it again: Effect of corporate governance and top management team characteristics on the likelihood of product-harm crises

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  • Kashmiri, Saim
  • Brower, Jacob

Abstract

Product-harm crises are ubiquitous in today's marketplace. Prior research has explored the negative consequences associated with these crises and highlighted effective crisis management strategies. Limited attention, however, has been devoted to exploring the antecedents of such crises. The authors use agency theory to explore corporate governance and top management team (TMT) characteristics that impact firms' likelihood of experiencing a product-harm crisis. They argue that family firms, firms with higher levels of managerial ownership, and firms in which the marketing function has a higher influence in the TMT are likely to exhibit a higher strategic emphasis on product quality. Strategic product-quality emphasis, in turn, mediates these firms' lower likelihood of encountering a product-harm crisis. An analysis of 116 S&P 500 firms across 2006–2011 provides considerable support for the authors' arguments. These results have important implications for practitioners and for scholars working in the areas of innovation, family business, and corporate governance.

Suggested Citation

  • Kashmiri, Saim & Brower, Jacob, 2016. "Oops! I did it again: Effect of corporate governance and top management team characteristics on the likelihood of product-harm crises," Journal of Business Research, Elsevier, vol. 69(2), pages 621-630.
  • Handle: RePEc:eee:jbrese:v:69:y:2016:i:2:p:621-630
    DOI: 10.1016/j.jbusres.2015.06.019
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    References listed on IDEAS

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    Cited by:

    1. Like Jiang & Michel Magnan & Lixin (Nancy) Su & Shafu Zhang, 2018. "Damage Control: Earnings Management by Firms Facing Product Harm Crises / Dérapage contrôlé : gestion des résultats par les entreprises qui font face à une crise résultant d’un rappel de produits," CIRANO Working Papers 2018s-01, CIRANO.

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