Whose call to recall: Institutional pressure, technological capability and product-harm crisis response strategy

Abstract

The existing studies have reinforced accommodating (i.e., voluntary product recall) and defensive (i.e., involuntary product recall) product-harm crisis responses. Little attention has been devoted to institutional influences on a firm's product-harm crisis response strategy. This research examines how institutional forces affect firms' accommodating (vs. defensive) product-harm crisis responses. Two distinct studies with different methods have been conducted: Study 1 adopts a set of cross-sectional survey data deriving from 178 top managers in Chinese auto firms; Study 2 takes a set of longitudinal archival data on Chinese automakers during the 2010–2018 period, confirming the results of Study 1. The results demonstrate that mimetic and normative pressures enhance the accommodativeness of product-harm crisis responses, whereas coercive pressure has a negative effect. Furthermore, superior technical capabilities and high crisis severity amplify the positive effects of normative pressure on response accommodativeness. This study contributes to the literature by elucidating the factors that drive accommodating reactions to product safety issues.