Business professors research product recall as a way of firm’s responsible management

Assistant Professors Jongwan Bae and Hannah Oh’s research was published in Corporate Social Responsibility and Environmental Management.

Jongwan Bae, assistant professor of finance, and Hannah Oh, assistant professor of marketing, co-authored an article exploring whether cumulated corporate social responsibility (CSR) efforts increase the likelihood of engaging in a voluntary product recall.

Headshot of professor Bae and professor Oh
Jongwan Bae, assistant professor of finance, and Hannah Oh, assistant professor of marketing

In the article in the journal Corporate Social Responsibility and Environment Management, “Product recall as a way of responsible management of a firm: The roles of corporate social responsibility and board members’ sense of ownership,” Bae, Oh and co-authors Sang-Joon Kim, Ewha Women’s University, and Ryan Choi, Eastern Michigan University, explain that despite incurring financial costs and the negative consequences of product recall, and even without any positive outcomes from a voluntary recall, some firms voluntarily conduct product recalls to actively assume responsibility whereas other firms conduct product recall involuntarily, as a last resort to product‐harm crisis after a widespread scandal.

The authors also examine the moderating effect of board characteristics that give a sense of ownership to board members in increasing socially responsible firm’s engagement in the voluntary recall.

“In this study,” write the authors, “we find that a firm’s responsible behavior (i.e., voluntary product recalls) can be governed by the cumulatively constructed reputation of the firm’s various responsible behaviors (i.e., cumulated CSR efforts).” Additionally, “we claim that a firm’s responsible behavior, product recall in this case, can be reinforced by its history of CSR engagement, which is amplified by the sense of ownership of the board of directors who are more likely to pursue a legacy.”

The Corporate Social Responsibility and Environmental Management journal focuses on research and environmental responsibilities in the context of sustainable development and provides a resource for organizations interested in developing tools and case studies to improve their performance and accountability in these areas.