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Non-conforming food products that reach consumers create potential for consumer harm and negative financial consequences for recalling firms. Food quality management systems are therefore of critical importance to consumers, policy-makers, and firms. In addition to implementing a Food Safety Management System (FSMS) for regulatory compliance, a firm may invest in a certified FSMS that enables downstream traceability. Downstream traceability is the ability to follow a product through the supply chain from production to point of sale. We use information processing theory (IPT) and supply chain coordination theory (SCCT) to hypothesize that downstream traceability improves integration and coordination, and hence, outcomes, of a product recall. Evaluating the role of downstream traceability systems in enabling firms to manage quality failures and associated outcomes is relevant because managers and policy-makers need to understand incentives for making such investments. We empirically investigate the effect of downstream traceability on the length of time unsafe product is in distribution, number of products recalled, incidence of product harm, and shareholder value using event study and regression methods in a sample of 211 food recalls announced in the United States (U.S.) from 2007–2013. We find downstream traceability enhances food safety by reducing time in distribution and number of products, but is not significant with respect to product harm. Furthermore, this capability mitigates negative shareholder value impacts. These findings suggest that downstream traceability is both fiscally and socially responsible. These results contribute to the extant academic literature and offer new insights to both practitioners and policy-makers.

An increasing emphasis on social responsibility from consumers, media, and government agencies has expanded the discourse around product recalls from what can be done to prevent a product recall to also include what can be done to make a product recall more effective to reduce harm to consumers. Surprisingly, little research has addressed the latter, leaving a gap in our understanding, while a substantive body of research has investigated the former. As a result of this gap, managers face a dilemma regarding what recall strategy to adopt in order to conduct an effective recall and reduce harm to consumers. To address this dilemma, we empirically examine how recall strategy affects two measures of recall effectiveness, recall completion time and recalled product recovered, using secondary data from recalls regulated by the United States Department of Agriculture from 2005 to 2015. We further investigate how the difficulty or complexity associated with the recall task may moderate the relationship between recall strategies and recall effectiveness. Our results provide managers with actionable guidance regarding the influence of different recall strategies, and indicate that the effect of recall strategy on performance may depend on the complexity of the recall recovery task.