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Managing a Product-Harm Crisis Product-recalls have become increasingly commonplace in American media reports. Everything from food products to toys and cars have been recalled with increasing frequency in recent years. Some researchers predict the numbers will continue to rise as regulatory agencies and consumers alike become more vigilant about health and safety (Gunther 2010; Berman 1999). A product-harm crisis, which often necessitates a product-recall, can have tremendous human and financial costs. For example, a 2010 case of salmonella-infected peanuts involved a massive recall effort involving 70 companies, 3,900 products, and approximately $1 billion in financial losses. It also made hundreds of people sick and caused 9 deaths (Gunther, 2010). No industry or brand-no matter how large or well known-is immune to the impact of such a crisis, as proven by Toyota's over $2 billion loss stemming from a 2009 gas pedal recall (Isadore, 2010). Given recent trends and the high-stakes consequences, businesses are interested in knowing what to expect in case of a product-harm crisis in terms of consumer and stock market reaction. Researchers continue to study what factors influence those reactions and hope to use their findings to build a viable product-harm crisis response strategy.
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