Product Recalls and Public Safety

Product failure is a possibility that firms and their managers work hard to prevent, but there are many ways a product can “fail.” For instance, it may fall short of its sales and profit goals, it may not gain access to an appropriate number of distribution points, or it could simply be replaced by a technologically superior substitute. However, a particularly damaging form of product failure occurs when the product must be recalled from the market. A product recall typically involves withdrawing and/or repairing a defective product with the goal of resolving or preventing public safety issues.

In the United States, there has been a steady increase in the number of product recalls issued over the past few decades. This rise in recalls has occurred despite ...