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The rise of recent product recalls reveals that manufacturing firms are particularly vulnerable to product quality and safety where goods and materials have been sourced globally. The purpose of this paper is to explore the issues of quality and safety problems in global supply networks, and introduce a supply chain risk management (SCRM) framework to reduce the quality risk.

A conceptual SCRM framework for mitigating quality risk is developed. In addition, four SCRM treatment practices are proposed by consolidating the empirical literature in the operations management and supply chain management areas. The general feasibility was discussed based on literature.

The research has identified the root causes of the recent product recalls and a series of product harm scandals ranging from automobiles to unsafe toys. Supply chains are extended by outsourcing and stretched by globalization, which greatly increase the complexity of supply networks and decrease the visibility in risk and operation processes.

The paper identifies four SCRM practices, and proposes two distinct antecedents that can prompt the effectiveness of SCRM.

Previous research on brand crisis has introduced the difference between a values-related crisis and a performance-related crisis. However, little remains known regarding consumers’ varying negative responses towards these two different types of brand misconduct. This paper aims to investigate and compare consumers’ affective and behavioural negative reactions (i.e. negative word of mouth and purchase intention) towards a faulty brand during a values-related crisis and a performance-related crisis by testing the mediation of negative emotions and introducing the moderating role of cultural belongingness (collectivistic vs individualistic).

The authors tested a model of moderated mediation in a cross-cultural investigation on a sample of 229 Italian and Asian consumers. The study is a 2 (cultures: collectivistic vs individualistic) × 2 (crisis: performance-related vs values-related) between-subjects experimental design. The moderated mediation model shows that consumers’ negative reactions (negative word of mouth and negative purchase intention) towards a faulty brand involved in different crisis typologies is explained by the mediating role of negative emotions, and that this mediation depends on a consumer’s cultural belongingness.

The results suggest that consumers belonging to a collectivistic culture (e.g. Asian culture) tend to react in a more severe and strict manner when faced with a values-related brand crisis event then when faced with a performance-related crisis. The arousal of negative emotion towards a brand represents the mediating variable in behavioural responses (i.e. negative word of mouth and purchase intention).

The present study extends current knowledge in the field of consumers’ negative response to brand irresponsibility behaviours while introducing the role of crisis typology and cultural belongingness. In particular, individualistic people are more sensitive to a values-related crisis in comparison with a performance-related one. The findings of this study have strong managerial implications for defining effective response strategies to negative events involving brands in different markets.

The purpose of this study is to investigate differences in consumer reactions to high- versus low-equity brands in terms of consumer attitude toward the brand, involvement with the brand, company credibility and consumer purchase intentions.

Experimental procedure is conducted to test three hypotheses using 317 consumer participants. The experiment is carried out comparing a high-equity personal computer (PC) brand and a low-equity PC brand involved in product-harm crisis.

The results indicate that, in the case of product-harm crisis, negative consumer perceptions regardless of brand equity level; less negative perceptions for a high-equity brand than for a low-equity brand; and smaller loss in consumer perceptions for a high-equity brand than for a low-equity brand.

The findings highlight the importance of brand equity in crisis management explained by covariation theory of attributions.

Although product-harm crisis is inevitable for many firms, continuous investment in brand equity can mitigate the negative consequences.

Product-harm crisis can pose serious consequences for firms on both financial and intangible dimensions. Given the occurrence of numerous product-harm crises involving both reputable and less known brands, it is important to consider potential influences of brand equity on consumer reactions to such crisis.

This paper aims to review the latest management developments across the globe and pinpoint practical implications from cutting-edge research and case studies.

This briefing is prepared by an independent writer who adds their own impartial comments and places the articles in context.

Although product-harm crises can pose serious consequences for firms in both financial and intangible ways, continuous investment in brand equity can mitigate the negative consequences.

The paper provides strategic insights and practical thinking that have influenced some of the world’s leading organizations.

The briefing saves busy executives and researchers hours of reading time by selecting only the very best, most pertinent information and presenting it in a condensed and easy-to-digest format.

This paper aims to investigate the effect of environmental, social and governance (ESG) controversies on the cost of equity (COE) capital, exploring the moderating role of both positive ESG performance and market securities regulation.

This paper adopts a sample of 2,599 time observations related to European listed companies for which the authors examine a set of 30 negative ESG scores across the three pillars in terms of controversies, compliance and other negative issues. This study uses the average of seven implied COE estimates.

The results show that negative ESG performance, particularly environmental controversies, increases the COE, although this impact is mitigated when associated with company efforts to improve environmental performance. Besides, environmental controversies are likely to increase the COE in countries where the market regulation is stronger, as a consequence of higher investors’ expectations towards the scrutiny role of more efficient markets against companies’ controversies.

Companies should take care seriously of environmental issues such as biodiversity, product impact and resource impact, because investors do react accordingly. As despite no direct effects of positive ESG performance are observed in terms of COE reduction, the mitigating role on the ESG controversies–COE relationship makes ESG practices still significant for European investors.

The effects of ESG performance on company financial performance should be investigated under the assumption that bad events weight more than positive ESG performance.

Because no prior studies have specifically assessed the effect of the European listed companies’ ESG controversies on their COE, this paper delivers insights into the relationship between positive and negative ESG performance and their effects on capital market financing.

This study aims to the information about consumer product quality and safety that can easily attract public attention and become the focus of public opinion. In recent years, the fast-growing social media have become an import platform for firms for releasing product quality and safety information and for firms and governments to hear public opinion.

To explore how information about consumer product quality and safety gets disseminated and a public opinion is formed in social media, this paper proposes two information transmission models, one with government intervention and the other without government intervention, based on the theory of complex network. A simulation case study in MATLAB is conducted to verify the proposed models.

Information transmission models were constructed, one without government intervention and one with government intervention. The influence of information transmission with government intervention was analyzed. MATLAB was used to simulate the Barabasi and Albert (BA)-based model to consider event information level, government information level and possible panic population proportion. The government intervention effect was evaluated.

Based on a complex network, the derived transmission rule can provide decision-making support for monitoring and managing Web information of consumer product quality and safety.

This paper aims to examine whether Twitter messaging can help mitigate the harm corporations suffer in the aftermath of ethical scandals.

This paper applies Web Application Programming Interfaces (API) on the Guardian and New York Times news archives to find corporations that suffered scandals between 2014 and 2019, revealing 92 publicly listed companies in the UK. Using Twitter API and the Python library, Getoldtweets, this paper extracts historical, pre-scandal – i.e. pre-2014 – tweets of the 92 firms. The paper topic-models the tweets data using Latent Dirichlet Allocation (LDA). This paper then subjects the topics to multidimensional scaling (MDS) to examine commonalities among them.

LDA reveals 10 topics, which group under 5 themes; these are product marketing, urgent signalling of “greenness”, customer relationship management, corporate strategy and news feeds. MDS suggests that the topics further congregate into two meta-themes of future-oriented versus immediate and individual versus global.

Provided they are sincere and legitimate, corporations’ tweets on global issues with a green agenda should help cushion the impact of ethical scandals. Overall, however, the findings suggest that Twitter messaging could be a double-edged sword, and underscore the importance of strategy.

The paper offers a first exploration of the relevance of corporate Twitter messaging in mitigating ethical scandals.

The role of retailers in influencing consumer attitude during a brand scandal is quite complex, as retailers are in direct contact with both marketers and consumers. The purpose of the exploratory research is to propose a theoretical model to capture the influences retailers exercise on consumers during brand scandals.

A qualitative approach has been adopted in the study. The study employs the grounded theory approach on the data collected by conducting in-depth interviews with 25 retailers.

Four contextual conditions and six behavioral antecedents of the retailer's role in the context of the brand scandal were identified. Then, the study finds that companies tend to follow two broad approaches during a brand scandal to address retailers' queries and apprehensions. On these bases, the study proposes a six-pronged typology to better understand retailers' role in shaping consumers' brand perception.

Existing literature has not paid adequate attention to this aspect of retailers' role in influencing consumer choices during brand scandal. To the best of the authors' knowledge, there is no prior research which investigates the role and influence of retailers in shaping consumer attitude during brand scandals. It is important to underline that the current research advocates retailers' significant role during a performance-based brand scandal. Specifically, the authors explored a health-related defective scandal of a well-known food brand. In addition, the study focuses on traditional grocery retailers, which already have special relationships with their consumers. Based on retailer perspectives, the authors' contribution is also updating the discussion of branding theory in case of scandals. The identified variables and constructs may be used for empirical investigation on the role of retailers in shaping consumer attitudes toward the scandalized brand.

The purpose of this paper is to examine the impact of the moral failure of a scandalized foreign brand afflicted with a product-harm crisis on competing brands (i.e. within the same product category) while taking into account the country of origin (COO) of the brands.

This paper presents the results of two studies. The first study uses an experimental design, while the second uses a survey to examine a real-life product-harm crisis.

The results indicate that the moral failure of a scandalized foreign brand has an indirect negative effect on the intention to purchase competing foreign brands from the COO of the scandalized foreign brand. This effect is, however, reversed for domestic brands, where moral failure has an indirect positive effect on the intention to purchase competing domestic brands.

The results of this research were based on an examination of how US consumers responded to the moral failure of Japanese and German brands. Future studies should examine brands from different COOs in different countries.

These results suggest that competing foreign brands from the COO of the scandalized brand should collaborate to quickly handle a product-harm crisis to prevent a spillover and that domestic competitors should capitalize on the opportunity to attract new customers.

This study represents a first attempt to examine the effect of a foreign brand’s moral failure in handling product-harm crisis on competing brands, both foreign and domestic.

Consumers are constantly confronted with negative information on defective or dangerous products (product‐harm crisis): the car does not stop at the red light due to faulty brakes or the t‐shirt causes the skin to itch. This research aims to provide a holistic picture of consumers' experience of product‐harm crises (p‐h c). The study sets out to investigate under which conditions consumers are impacted by the crisis and how they experience p‐h c in real‐life.

The study draws on in‐depth interviews with both experts and consumers in order to investigate factors influencing consumers' experience in crisis situations.

Based on in‐depth interviews, a theoretical model is developed that captures the impact of p‐h‐c on consumers. Impact consists of personal relevance and perceived severity of the crisis and is a prerequisite for consumers' response. The study finds evidence that the personal impact and the consumer response to crisis situations are influenced by the crisis context, consumer context and company context.

Given the qualitative nature of the study, a quantitative approach should now be used to further substantiate the presented findings and validate the theoretical model.

Consumer response to crises is primarily influenced by the personal impact of the crisis. The nature of the crisis as well as consumer characteristics heavily influence the way a consumer is impacted by a crisis event.

This study illustrates the complexity of consumers' p‐h c experience and contributes to a better understanding of their behavior in p‐h c situations.