De La Salle University - Dasmariñas

RETIRADA DEL PRODUKTO

An Enabling Assessment
Presented to Prof. Rosario T. Reyes
Allied Business Department
College of Business Administration and Accountancy
De La Salle University-Dasmariñas
Dasmariñas City, Cavite

In Partial Fulfillment
of the Requirements for the Subject
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B-ENTR314 Special Topics in International Business

ZAIRAH MAE P. DAGOHOY

November 2023

INTRODUCTION

Background

Product recalls, or Retirada del Producto in Spanish, are remedial

measures taken to address identified safety concerns with a product after it has
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been manufactured. As stated by Kenneth E. Homa (1996), a recall is a costly

distraction from normal business routines caused by failures within the internal

development and operating processes. Despite the importance of being prepared

for a recall, many companies still lack the capability to handle a recall. A lack of

preparation can lead to delays in issuing a recall, which can put consumers at

risk. It can also damage the company's reputation and lead to lost sales.

Effectively managing product recalls can help businesses to avoid reputational

damage, which could lead

to a loss of clients and revenue. This involves having a well-defined recall plan

in place and being prepared to act quickly and decisively when a recall is

necessary.
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This paper examines product recalls that have occurred over the past two

decades and evaluates the ethical responses of the companies involved. In

circumstances involving product recalls, the ethical viewpoint is crucial.

Building trust and maintaining brand reputation are facilitated by a company's

demonstration of its dedication to putting its customers' safety and well-being

first. Furthermore, it helps avert potential financial penalties, legal and

regulatory problems, and additional harm to consumers. In the end, moral

behavior is just the correct thing to do.

PRODUCTS YEAR COMPANY INDUSTRY

Cruise Control 2003 Ford Motor Automotive
System Company
Floor Mat 2004 Toyota Automotive
Ignition Switch 2005 General Motors Automotive
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Tylenol Infants’ Drop 2006 Johnson & Healthcare

Johnson
Peanut Products 2007 Peanut Food
Corporation of
America
Accelerator 2008 Toyota Automotive
Motrin Infants' 2010 Johnson & Healthcare
Drops Johnson
Fabuloso Multi- 2011 Colgate- Bath
purpose Cleaner Palmolive
Washing Machines 2013 Samsung Electronics
Electronics
Airbag Inflators 2014 Takata Automotive
Corporation
Diesel Engine 2015 Volkswagen Automotive
Galaxy Note 7 2016 Samsung Electronics
Electronics
Cereal 2018 Kellogg’s Food
Pixel 4 Smartphones 2020 Google Electronics
PlayStation 5 2022 Sony Electronics
Consoles=
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Table 1. Products recalled starting from 2003 up to present (2023)

From the table, we can see that there are 3 companies that recalled a

product more than once. The first one is Toyota, the world's largest automaker

by production volume, known for its quality, reliability, and durability. It is a

global company with operations in over 170 countries, making it a leader in

hybrid and electric vehicle technology. Automotive is the most industry on my

list that has at least five product recalls. Cars are complex machines, making it

very difficult to eliminate all defects in the design and manufacturing process.

However, car companies take this responsibility very seriously and are

constantly working to improve the safety and reliability of their vehicles. The

safety and dependability of a vehicle is of utmost importance to car companies.

Another company is within the Healthcare industry, the Johnson & Johnson.
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Founded in 1886, Johnson & Johnson is one of the largest and most diversified

healthcare companies in the world. Over the years, J&J has been entangled in

several high-profile disputes and legal battles pertaining to the marketing of its

opioid painkillers, the security of its talcum powder products, and the security of

its hip replacement implants. Despite this, it remains a powerhouse in the

healthcare industry with annual revenue of over $80 billion. And lastly is

Samsung Electronics, one of the largest and most successful tech companies.

Known as a major player in producing memory chips and processors for many

of its own devices.

Ethical Valuation

 Reactive

 Ford Motor Company

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 From an ethical perspective, Ford’s response to the recalls can be

considered reactive, as they only acted after the danger was widely

reported. Ford waited for 11 years before letting everyone know

about the recall. This is a long time, and it means that some people

may have been driving with the defective switch for many years.

Ford’s track record of recalls due to faulty cruise control disconnect

switches is indicative of a wider trend of corporate irresponsibility

and disregard for consumer safety.

 Toyota (2004 Floor Mat)

 In the case of the recall from 2004 Floor mat, Toyota should have

acted faster to inform customers of the safety risk. Waiting months to

notify affected owners is unacceptable, as it puts customer safety at

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risk. Toyota could have endangered the lives of its customers by not

taking swift action.

 General Motors

 General Motors chose not to redesign a faulty switch because it

would have cost an extra dollar per car. This decision, which

prioritized profits over people, put customers at risk and may have

contributed to the deaths of 13 people. Ethically, a company's top

priority should always be the safety of its customers. The company

failed to prioritize safety in this case, and its decision to prioritize

cost savings over the lives and well-being of people is inexcusable.

 Johnson & Johnson

 J&J handled the recall unethically. Their response to the recall was

reactive and defensive. Before initiating the recall, there had been
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numerous reports of serious injuries and deaths. In order minimize

the severity of the problem, they claimed that the injuries and deaths

were caused by consumers overdosing on their babies. But later

admitted that the product was indeed defective.

 Peanut Corporation of America

 The recall only happened after Salmonella was found in their

products. PCA’s recall was a major food safety crisis that was linked

to Salmonella contamination in their products. The outbreak led to

several fatalities and numerous cases of sickness.

 Johnson & Johnson

 Another product recall from Jonhson & Johnson is the Motrin

Infants' Drops. The response to this recall is reactive and defensive.

If not for the third-party supplier discovering the plastic particles in

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the product, they wouldn’t initiate the recall. As plastic particles

could cause choking or other injuries, this delay puts infants at risk

for serious harm. To save their reputation, they claimed that the

plastic particles found were tiny and unlikely to cause harm.

 Colgate-Palmolive

 The 2011 Colgate-Palmolive recall of the multipurpose cleaner

Fabuloso was an overly reactive rather than proactive measure.

Although it's commendable that they acted to recall the product as

soon as they learned about the problem, it appears that they waited

until the bacteria risk had already materialized.

 Samsung Electronics

 Samsung's response to the 2013 washing machine recall was

reactive. The company should have been more proactive in their

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quality control and testing protocols to prevent the problem from

happening in the first place. The fact that there was an "internal

fault" that might have caused a fire is very concerning, as it suggests

that the product may have had quality problems or design flaws that

should have been discovered sooner.

 Volkswagen

 For several years, the company was aware that its diesel cars could

evade emissions tests by installing "defeat devices." Even though

these cars released up to 40 times the permissible number of

pollutants, they were marketed as "clean diesel." When they were

discovered, they reacted reactively and concentrated on minimizing

damage. They only acknowledged their mistakes and offered an

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apology in response to public outcry, which is regarded as extremely

unethical.

 Samsung Electronics

 Samsung’s response to the Galaxy Note 7 recall was reactive and

unethical. The business failed to put the safety and happiness of its

customers first and moved slowly. Initially, Samsung declined to

provide complete refunds or replacements, and its customer service

was insufficient. This further tarnished Samsung's reputation and

caused inconvenience and outrage among customers.

 Kellogg’s

 Reactive and unethical was Kellogg's response to the 2018

Salmonella Mbandaka outbreak connected to Honey Smacks cereal.

Even though the company had been aware of the issue for some time,
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it didn't recall the product until the Centers for Disease Control and

Prevention (CDC) issued a warning. Customers could become ill as a

result of this delay.

 Google

 Google's response to issues with its phones' battery life and other

technical issues was reactive. Only after multiple customer reports

surfaced did the company decide to recall the phones. While Google

eventually accepted responsibility and offered to replace or

reimburse affected customers, their response was not proactive

enough.

 Defensive

 Toyota (2008 Accelerator)

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 Toyota was defensive about the issues regarding the accelerations in

its vehicles. They denied and blamed the consumers for having

unintended acceleration accidents. They had been aware of the

problem but failed to take action, putting consumers at harm.

 Takata Corporation

 In their first reaction, they were extremely defensive and denied the

existence of the issue for far too long. They prioritize profits over the

safety of people, which is incredibly unethical. It's just not acceptable

that defective airbags have the potential to burst and shoot shrapnel

into the air, injuring or possibly killing people.

 Sony

 Sony's response to the PS5 console recall was slow and initially

reluctant to acknowledge the problem. The company blamed users

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for the console crashes, but eventually offered to repair or replace

affected consoles after a class-action lawsuit was filed.

Conclusion

Although they are a difficult and complicated procedure, product recalls

are necessary to keep consumers safe. Effective recall management helps

businesses minimize business disruption and maintain moral standards.

Nonetheless, businesses put customers in danger and act unethically when they

put off recalls or attempt to dodge accountability. When an ethical company

recalls a product due to a safety issue, it will have a greater chance of keeping

customers’ trust if it is open and honest about the issue and acts swiftly to

address it.
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Product recalls are seen by ethical businesses as a chance to enhance

their offerings and operational procedures. They carefully examine the

underlying causes of every recall and put remedial measures in place to stop

reoccurring issues. This makes it more likely that there won't be any more

product recalls in the future and that the ones that do happen will be handled

better.

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