(Press-News.org) Lobbying can help companies reduce costs related to product recall, but it can also have a negative impact on the firm’s image. Research published in Strategic Management Journal offers clear data on the phenomenon, suggesting that managers should pay careful attention to the reputational cues from the media to determine when lobbying may be problematic and to refrain from the practice.
Firms can use lobbying to influence the government, which in turn potentially limits their costs during product recall crises. Previous research has shown that when a firm increases its lobbying spending by approximately $417,014, which has been found to lead to one less recall, it can save the firm millions of dollars. Each recall conservatively costs about $12 million. Such lobbying can, however, draw scrutiny from the media if the lobbying gives the impression that companies would rather save costs than focus on safety, which can come across as hypocritical.
The researchers — Jinsil Kim of the College of New Jersey, Miranda J. Welbourne Eleazar of the University of Iowa, and Seung-Hyun Lee of the University of Texas at Dallas — wanted to better understand how firms could resolve the tension around lobbying. They hypothesized that the greater the negative publicity of a firm's product safety recalls, the less likely that firm would be to lobby for recall-related issues.
The researchers used auto firms' lobbying responses to news about product recalls and lobbying. They tapped multiple data sources and a sample of 3,747 manufacturer-recall observations related to auto recalls and lobbying in the U.S. between 2008 and 2022. They also conducted 15 interviews with lobbyists and heads of external affairs overseeing firms' lobbying activities.
“As there is more and more attention around this issue, and we've come long past the era when the focus was only on the gains from corporate political action, firms are increasingly considering this tension as well,” Kim says. “We asked what the triggers or signals that firms look out for in their decision regarding CPA (corporate political action) management: whether to go ahead with lobbying or strategically eschew it.”
Upon analysis of the data and interviews, they found that companies are more likely to strategically refrain from lobbying to minimize additional, unwanted media spotlight and its associated negative repercussions when they receive negative media coverage of product recalls, or recall-related lobbying. While lobbying can reduce costs related to product recalls, the repercussions to firm reputation appear to not be worth the savings.
“From our field interviews with corporate lobbyists and head of external affairs, we learned that practitioners are aware — to a certain extent — of the impact of media and pay much attention to what goes on in the media, and make lobbying decisions accordingly,” Kim says. “We view that our paper would reinforce their tendencies to exercise caution. It may be challenging to accurately anticipate the costs and benefits upfront, but we've made a first step by showing that gauging the media temperature is important.”
To read the full context of the study and its methods, access the full paper available in the Strategic Management Journal.
About the Strategic Management Society
The Strategic Management Society (SMS) is the leading global member organization fostering and supporting rigorous and practice-engaged strategic management research. SMS enjoys the support of 3,000 members, representing more than 1,100 institutions and companies in more than 70 countries. SMS publishes three leading academic journals in partnership with Wiley: Strategic Management Journal, Strategic Entrepreneurship Journal, and Global Strategy Journal. These journals publish top-quality work applicable to researchers and practitioners with complementary access for all SMS Members. The SMS Explorer offers the latest insights and takeaways from the SMS Journals for business practitioners, consultants, and academics.
Click here to subscribe to the monthly SMS Explorer newsletter.
Click here to learn more about the programs and opportunities SMS has to offer.
END
Research shows managers of firms handling recalls should review media scrutiny before deciding whether to lobby
2024-11-13
ELSE PRESS RELEASES FROM THIS DATE:
New model system for the development of potential active substances used in condensate modifying drugs
2024-11-13
The origin of many diseases such as Alzheimer's or Parkinson's can be found at the molecular level in our body, in other words, in proteins. In a healthy system, these proteins are responsible for numerous physiological functions. In order to carry out certain tasks, they may also assemble in groups consisting of numerous proteins. Once that job is done, they split up again and go their own ways. However, if larger clusters of a hundred or more proteins form so-called fibrils, which are bundles of long, filament-like accumulations of proteins, the ...
How to reduce social media stress by leaning in instead of logging off
2024-11-13
Young people’s mental health may depend on how they use social media, rather than how much time they spend using it, according to a new study by University of B.C. researchers.
The research, led by psychology professor Dr. Amori Mikami (she/her) and published this week in the Journal of Experimental Psychology: General, examined the effects of quitting social media versus using it more intentionally.
The results showed that users who thoughtfully managed their online interactions, as well as those who abstained from social media entirely, saw mental health benefits—particularly in reducing symptoms ...
Pioneering research shows sea life will struggle to survive future global warming
2024-11-13
A new study highlights how some marine life could face extinction over the next century, if human-induced global warming worsens.
The research, led by the University of Bristol and published today in Nature, compares for the first time how tiny ocean organisms called plankton responded, when the world last warmed significantly in ancient history with what is likely to happen under similar conditions by the end of our century.
Findings revealed the plankton were unable to keep pace with the current speed of temperature rises, putting huge swathes ...
In 10 seconds, an AI model detects cancerous brain tumor often missed during surgery
2024-11-13
Researchers have developed an AI powered model that — in 10 seconds — can determine during surgery if any part of a cancerous brain tumor that could be removed remains, a study published in Nature suggests.
The technology, called FastGlioma, outperformed conventional methods for identifying what remains of a tumor by a wide margin, according to the research team led by University of Michigan and University of California San Francisco.
“FastGlioma is an artificial intelligence-based diagnostic system that has the potential to change the field of neurosurgery ...
Burden of RSV–associated hospitalizations in US adults, October 2016 to September 2023
2024-11-13
About The Study: In this cross-sectional study of adults hospitalized with respiratory syncytial virus (RSV) before the 2023 introduction of RSV vaccines, RSV was associated with substantial burden of hospitalizations, ICU admissions, and in-hospital deaths in adults, with the highest rates occurring in adults 75 years or older. Increasing RSV vaccination of older adults has the potential to reduce associated hospitalizations and severe clinical outcomes.
Corresponding Author: To contact the corresponding author, Fiona P. Havers, MHS, MD, email fhavers@cdc.gov.
To access the embargoed study: Visit our For ...
Repurposing semaglutide and liraglutide for alcohol use disorder
2024-11-13
About The Study: Among patients with alcohol use disorder (AUD) and comorbid obesity/type 2 diabetes, the use of semaglutide and liraglutide were associated with a substantially decreased risk of hospitalization due to AUD. This risk was lower than that of officially approved AUD medications. Semaglutide and liraglutide may be effective in the treatment of AUD, and clinical trials are urgently needed to confirm these findings.
Corresponding Author: To contact the corresponding author, Markku Lähteenvuo, MD, PhD, email markku.lahteenvuo@uef.fi.
To access the embargoed study: Visit our For The Media website at this link ...
IPK-led research team provides insights into the pangenome of barley
2024-11-13
Reliable crop yields fueled the rise of human civilizations. As people embraced a new way of life, cultivated plants, too, had to adapt to the needs of their domesticators. There are different adaptive requirements in a wild compared to an arable habitat. Crop plants and their wild progenitors differ, for example, in how many vegetative branches they initiate or how many seeds or fruits they produce and when.
A common concern among crop conservationists is dangerously reduced genetic diversity in cultivated plants. But crop evolution needs not be a unidirectional loss of diversity. “Our panel of 1,000 plant genetic ...
New route to fluorochemicals: fluorspar activated in water under mild conditions
2024-11-13
Researchers at Oxford University have developed a new method to extract fluorine from fluorspar (CaF₂) using oxalic acid and a fluorophilic Lewis acid in water under mild reaction conditions.
This technology enables direct access to fluorochemicals, including commonly used fluorinating agents, from both fluorspar and lower-grade metspar, eliminating reliance on the supply chain of hazardous hydrogen fluoride (HF).
The findings are published today in the journal Nature.
Currently, all fluorochemicals – critical for many industries – are generated from the highly dangerous mineral acid ...
Microbial load can influence disease associations
2024-11-13
In sickness or in health, the billions of microorganisms that inhabit our guts are our constant companions throughout life. In the past few decades, scientists have shown how the nature of this ‘microbiome’ can provide valuable clues to human diseases and their treatment.
A new study from the Bork group at EMBL Heidelberg, recently published in the journal Cell, reports that a number of conditions, such as lifestyle and disease, affect the total number of microbes in the gut, making this often neglected metric one that bears ...
Three galactic “red monsters” in the early Universe
2024-11-13
An international team led by the University of Geneva (UNIGE) has identified three ultra-massive galaxies – nearly as massive as the Milky Way – already in place within the first billion years after the Big Bang. This surprising discovery was made possible by the James Webb Space Telescope's FRESCO program, which uses the NIRCam/grism spectrograph to measure accurate distances and stellar masses of galaxies. The results indicate that the formation of stars in the early Universe was far more efficient than previously thought, challenging existing galaxy formation models. The study is published in Nature.
In the theoretical model favored by scientists, galaxies form ...