...Product Recall and Associated Liability Professor Muse Business | 670 Legal environment Londone Williams February 4, 2014 Product liability has been a subject that can create issues within a business. There have been various businesses that have gone bankrupt as a result of product liability problems. It is important for a company to consider the risk and liabilities with great consequences. This paper will discuss the significance of product liability and the role retailers play. The product that will be discussed in this paper is the Lion Force boys Puffer coat. The Puffer Coat, was recalled February 4, 2014, the recall number is 14-100. The Puffer Coat was recalled due to hazardous strangulation of children. The Puffer Coat was made in China, and as with many other products, is imported into the United States. “They typical product liability case involves a defective product purchased by the plaintiff who was subsequently injured by the product” (Kluwer, 2007). The goal of the United States Consumer Safety Commission is to guard the public from irrational possibility to injuries connected with consumer products. The U.S. Consumer Safety Commission’s function is to observe corrective plans that are known as recalls. There are more than 300 recalls each year from different manufacturers and distributors. Some of the recalls that are made are done because the Consumer Safety Commission determines that a product is faulty. In some...
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...Defective Product: Recall or Repair November 13, 2014 Within the past several months, automobile manufacturers and baby care product industries have been recalling defective products to save the life of their consumers. Consumer safety is regulated by the Consumer Product Safety Commission (CPSC), an agency that strives to “protect the public from hazardous consumer products” this includes children and families (USCPSC, 2013, p. i). In unit one the discussion related to a defective memory chip; in unit two we deal with yet another defective product, in which a lead engineer saw the need to correctly deal with a defective fuel-line component. Product safety standards have been the number one concern for all businesses from automobile to toy manufacturers. In this scenario, Minnie discovered the defective fuel-line component; unfortunately, there are some risks associated with the company continuing to sale the product even if the product will cause little to no harm to consumers. In addition, the company will face some risks if management decides to recall the product. It is the responsibility of the management team of the manufacturer to recall or notify everyone involved about the defective product - this includes consumers. Soon as Minnie notified the management that the fuel line may potentially cause harm to consumers, swift action needed to be taken to prevent any further harm and save the company’s reputation and brand name. Therefore, if the company decides...
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...Case 3 Analysis: Product Recall Submitted by: GROUP 6 Torcal, Giellan Eunice L. Yrad, Jenesis Hsieh, Jeemily A. Tubosa, Mark Rosales, Gillian M. Torres, Matthew Rex Submitted to: Dr. Mirabelle J. Engcoy Subject Professor Date Submitted: August 31, 2012 Main Problem: * To accept or not the suggested rate per repair by the dealer from $88 to $110. Objective: * To complete the repair of all cars being delivered at a lower cost. Alternative Courses of Action (ACA): i. Continue paying the dealers with the reasonable rate of $88 per repair decided by the company engineers themselves. Advantage: * They will incur a certain amount of expense that is favourable for the company itself. Disadvantages: * Conflict would arise between the company and the dealer if the company would pay the rate of $88 per repair. * The workers of the dealers, whose going to do the labour, will not be encouraged to continue the task. ii. Pull out the products being distributed to the dealers and repair it through the use of the company engineers. Advantages: * The company will not pay anymore the workers of each dealer. * The repair will be more efficient and effectively for the engineers of the company, themselves, will do the work. Disadvantage: * This will be costly in part of the company for a reason that there will be additional payments in shipping back the cars from different stations of dealers to the main company, where it will...
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...Running header: Johnson & Johnson Johnson & Johnson: The Tylenol Crisis Renita Edwards Virginia College MGT3410 Mike Aday 3/20/2008 Outline I) Brief history of Tylenol crisis II) Recalling the product from points of view a) Economic point of view b) Legal point of view c) Moral point of view III) Benefit from the company’s credo and mission statements a) Johnson & Johnson b) Bristol- Myers Squibb c) Merck Corporation d) Bridgestone Tires IV) Conclusion Johnson & Johnson: The Tylenol Crisis Brief History During the fall of 1982, on September 30, Johnson & Johnson CEO James Burke received the horrible information that several deaths had occurred. The deaths of seven people were a result of them taking cyanide-laced capsules of Extra Strength Tylenol. This information captivated the nation’s attention. Before this happen Johnson& Johnson “had captured over 35 percent of the $ 1 billion analgesic market- over three times the market share of it’s nearest competitor.” (Boatright, 2007) Tylenol was actually dominating the analgesic market; this product was making a lot of money for Johnson & Johnson. The cyanide was placed into the capsules of the Extra Strength Tylenol, the capsules were easy to lace because they could be pulled apart and put back together again and no one not know it. James Burke and staff found out that “the tampering had...
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...CHILDREN: MATTEL’S TOY RECALLS AND SUPPLY CHAIN MANAGEMENT We apologize to everyone affected by this recall, especially those who bought the toys in question. We realize that parents trust us with what is most precious to them—their children. And we also recognize that trust is earned. —Robert Eckert, CEO of Mattel, Inc.1 On August 2, 2007, Mattel announced a voluntary worldwide recall of 83 products in its Fisher- Price toy lines, including characters such as Dora the Explorer, and the Big Bird and Elmo characters from Sesame Street. The recall, which applied to approximately 1.5 million toys sold worldwide after May 1, 2007, was due to the use of excessive lead paint.2 Over the next month, Mattel announced six more recalls that covered toys with lead paint, as well as small magnets that could become loose and be ingested by children. In October, Mattel made yet another recall for lead paint contamination.3 All of the toys recalled had been manufactured in China. Two weeks after the August 2nd recall, the owner of the Chinese factory that had used the lead paint committed suicide. This series of recalls attracted widespread publicity, as well as political and consumer concerns that sometimes bordered on hysteria. Newspapers and television networks jumped on the story, interviewing concerned shoppers and showing toys being removed from shelves and parents bringing toys to stores for lead testing. Mattel‟s brand image took a serious beating. The toy recalls reinforced public...
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...Product Liability and Legal Ramifications Christopher M. Branch MBA 5861 New Product Marketing 08/13/2013 Christopher Branch MBA 5861 Term 1A Dr. David Castle 08/13/2013 Product Liability and Legal Ramifications The next time you walk into a retail store like Wal-Mart, Target, Home Depot, Office Depot, Babies R’ Us/Toy R’ Us, you will see a board, typically in plain sight of the viewing public, with sheets of papers titled “Product Recall” or Safety Recall or something of the like. Recalled items run the gamut of consumers good and are generally recalled because of a safety or health concerns. The Food and Drug Administration regularly issues recalls or public safety notices for Medical Products, Pharmaceuticals, Tobacco, and contaminated food items. Product Liability is the responsibility of manufacturers, distributors and sellers, they are expected to act in the best interest of the public; to deliver a product free of defects which can harm an individual or persons; and to make good on that responsibility if their products are defective. These can include faulty auto brakes, contaminated baby food, exploding bottles of beer, flammable children's pajamas, or lack of label warnings. The key element in products liability law is that a person who suffers harm from a product need not prove negligence, since the negligence is "presumed" and the result is "strict liability" (absolute responsibility) on the seller, distributor and manufacturer. An injured person...
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...the costs of product recalls consists of two methods. The first is the accrual of “small campaigns” that are subject to a threshold of $100,000 (total campaign costs per product). Small campaigns are estimated and recorded together with the warranty reserve at the time of sale, since all payments related to such campaigns are expected to fall within the warranty period. The second is the accrual of “major campaigns” when announcement of the recall campaign is made. A major campaign involves consideration of numerous variables (for example, the number of defect occurrences, public safety issues, public relations concerns, evaluation of potential litigation, and so forth) and requires management approval prior to being announced. As part of a review of its accounting policies, Frequent Fixer began an internal evaluation of its product recall costs and its ability to reliably estimate and record product recall costs at the time of sale. The following summarizes the costs of announced product recall campaigns by Frequent Fixer in recent years: 1995 $ 8,000,000 1996 $ 11,500,000 1997 $ 15,500,000 1998 $ 20,000,000 1999 $ 32,000,000 2000 $ 50,000,000 From the data above, Frequent Fixer identified that the frequency and size of product recall campaigns, either voluntarily or mandated by industry regulators, have increased significantly in recent years. Frequent Fixer believes that the increased frequency and costs of product recall campaigns are...
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...In the beginning of 2009 Toyota was confirmed as the world’s largest manufacturer by volume, partly due to the collapse of General Motors. But Toyota hasn’t had much time to celebrate. The carmaker has been plagued by a variety of setbacks, including slumping sales, under-utilized assembly lines and multibillion-dollar losses. But perhaps most worrisome of all are signs that the company’s flaunted quality has been slipping. Long hailed as the industry benchmark, some key Toyota products have suffered quality snags in recent years regarding the overall safety of their vehicles. The auto media seems to believe that Toyota’s reputation is ruined. Consumers, though, are still under the impression that Toyota’s quality is tops when compared to all other automakers. Toyota had a rough 2009, to put it mildly. Toyota didn’t have a much better 2010 since the company announced a voluntary recall of 2.3 million vehicles to correct “sticking accelerator pedals.” Oddly enough, that new recall has...
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...2015 Tylenol crisis of 1982 John Doe Business Society September 30, 2015 Abstract In this paper I talked about the Johnson and Johnson Tylenol case of 1832. I explained the case and defended Johnson and Johnson’s ethical decision. I learned that this case paved the way for companies to start recalling their products if there is something wrong with them. Tylenol crisis of 1982 Johnson and Johnson’s Tylenol product had become one of the most successful over the counter product in the United States. Then mysterious deaths all around the US were being linked to Tylenol. Johnson and Johnson was faced with the ethical decision whether or not they should have a recall on their product or not. Many companies have been put in the ethical decision of right and wrong before. Johnson and Johnson decided that the best decision they could make was to recall their product from the market. Even though this decision may have set Johnson and Johnson back in the short term, eventually they were able to come back even stronger in the long term. Johnson and Johnson’s Tylenol was cashing in 19 percent of its profits. Tylenol was becoming one of the most successful products ever. The fall of 1982 comes around and there are reports of deaths that doctors are relating to Tylenol. Many Tylenol bottles were reported tampered with. Somebody had replaced the pills in a Tylenol bottle with cyanide-laced capsules. These pills were killing people. These deaths put the pressure on Johnson and Johnson...
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...I. OBJECTIVE: To provide proper action regarding Product Recall To establish coordination with the supplier/s when a certain product is recalled. II. SCOPE: All products that are subjected to be recalled under the DOH-FDA declaration. III. RESPONSIBILITY * Pharmacist * Owner/Manager IV. PROCEDURE 1. The pharmacist is important person to accomplish this task. 2. The distributor company will inform the drugstore about the product recall through a Product Recall Letter* containing the details of product/s to be recalled. 3. The pharmacist must be particular on the batch no or lot no of the product that is being recalled from the market to facilitate removal of stock in the shelves and the store. 4. After the batch no has been checked, see to it that the product is removed from the shelves so that it will not be sold anymore. 5. Coordinate to the supplier when will be the product withdrawn. 6. Wait for further pronouncement of the recall to be updated. V. QUALITY OF RECORDS: The letter and withdrawal form should be kept for further purposes. VI. FORMS: Logbook VII. END OF DOCUMENT GOOD DISPENSING I. OBJECTIVE: To provide standard operating procedure for Dispensing Prescription Drugs. To insist use of generic equivalent drugs which are cost-effective in nature. II. SCOPE: All prescriptions, generic equivalent drugs and Over-The-Counter drugs. III. RESPONSIBILITY * Pharmacist * Pharmacy Assistant ...
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...Jessica Jane A. Gonzales BSBA MMIV-B ASSIGNMENT in TQM CASE STUDY: Unsafe for Children: Mattel’s Toy Recalls and Supply Chain Management Discussion Questions: 1. Why do firms contract overseas for production of products they sell? There are several reasons for the companies to outsource some of their non-core business functions. Outsourced company will become a strategic partner who will be coordinating with the company. It has many advantages and helps the company to concentrate on their main business rather than distracting their efficiencies in different directions. Sometimes companies outsource because the company have expertise in that business area. Another reason behind the outsourcing can be the lack of resources in a company, which lead it to outsource to be performed better by an outsourced company. Outsourcing can help to reduce the excess capital expenses and a company will not need to invest in its non-core business through partnering with other company. 2. What were the primary causes of Mattel’s recall problems? There were many issues which became the primary cause of Mattel recalling its goods. There were initially two problems in the Mattel’s toys which were lead excess paint and defective design. According to the recalling volume of Mattel’s goods, most were recalled due to defective design in which small magnets were attached that could become loose. While on the other side, recalling of goods due to excess lead was comparatively low with...
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...Toyota Recall: Five Critical Lessons Posted by Michael Connor • January 31, 2010 • Printer-friendly by Michael Connor Toyota’s announcement of a technical fix for its sticky gas pedals – which can lead to sudden acceleration problems - is not likely to bring a quick end to the company’s current recall nightmare. Having already halted sales and production of eight of its top-selling cars in the U.S. - and recalled more than 9 million cars worldwide, in two separate recalls – Toyota faces the prospect of billions of dollars in charges and operating losses. The Toyota brand, once almost synonymous with top quality, has taken a heavy hit. While all the facts are not yet in, it’s clear that Toyota’s crisis didn’t emerge full-blown overnight. Fixing the problem and ensuring that something like it doesn’t happen again will require an all-out effort, from assembly line to the boardroom. Even then, there are no guarantees. Maintaining a good corporate reputation in the 21st century is tricky business indeed. Toyota’s case offers a number of valuable lessons for other business people and companies to consider. Here, for starters, are five: Aggressive growth can create unmanageable risk. Toyota’s desire to supplant General Motors as the world’s number-one car-maker pushed it to the outer limits of quality control. “The evidence that Toyota was expanding too much and too quickly started surfacing a couple of years ago. Not on the company's bottom line, but on its car-quality ratings...
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...and efficient flow the business as they follow the conditions given to them. 3. If I am the marketing manager of embassy, the measures that I will be going to institute so as to make embassy remain as a popular “having-out among teens is that I must lessen or limit the serving of alcoholic drinks which will give a bad effect on teenagers” health. Instead, I will suggest serving new drinks that will be loved by teens such as juices or beverages that has only a small time I’ll suggest to serve foods which will be a good compliment to new drinks that I suggested. CASELET 2 MATTEL ISSUES NEW MASSIVE CHINA TOY RECALL ABOUT 9 MILLION ITEMS RECALLED; DANGER FROM MAGNETS AND LEAD PAINT Questions: 1. What do the recalls of various toys say about current product quality strategies? 2. As the owner of Mattel, what must you do in order to prevent product recalls? 3. Prepare SWOT analysis for Mattel. Answers: 1. If I am the marketing manager of embassy, the measures that I will be going to institute so as to make embassy remain as a popular “having-out among teens is that I must lessen or limit the serving of alcoholic drinks which will give a bad effect...
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...it can cause the engine to shut off, which in turn causes several other problems. This problem has been linked to thirteen deaths and many more accidents. General Motors has been accused of covering up this problem because they waited a decade to recall cars with this problem. A replacement switch was approved in 2006, but General Motors did not change the part number to indicate that there was a problem with the first part. Senator Claire McCaskill said General Motors had “a corporate culture that chose to conceal rather than disclose.” General Motors had ample opportunity to tell owners about the recalled cars, but chose not to. General Motors asserts that they are now more focused on their consumers and their safety, but this statement is unconvincing to lawmakers. I would have a hard time trusting General Motors after hearing about the cover-up of this problem. Being dishonest shows a lack of ethics. In a society where safety and honesty is valued, General Motors has not shown that their cars are safe for customers or that they care about their customers. Anytime there have been several accidents and deaths linked to a product, the company should take responsibility by informing customers and recalling the product. Instead of letting customers know about the faulty ignition switches, General Motors tried to cover up the problem by fixing the switches without telling owners that they had defective switches in their car. This most likely caused...
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...discovered the Pentium Flaw. Once discovered they decided that their chips did not need to be recalled because the chance of the average user finding out about the error was 1 in 9 billion. Thomas Nicely, a professor at Lynchburg College in Virginia, made the error public. He had sent an e-mail to several colleagues. Nicely was using a few computers to compute mathematical problems. He wanted to prove they had enough power to do so. I feel Intel did not handle the problem professionally at all. While Intel knew that there was a flaw in the chip, they continued to send out a defective product. Regardless of who might discover the error, they should have recalled the chip to have them replaced. By deciding to send out the flawed processor, this probably helped the company as well. Before this mistake, not many people were aware of Intel. After months of research, Intel finally decided to recall the chip. Thomas Nicely had then run over a quadrillion calculations on a revised chip and was unsuccessful of reproducing the error. I am unsure of the outcome if a similar flaw like this were to happen today. With the help of social media and the internet, word of any flaw or error today would spread like wildfire. The old rule of thumb is 1 tells 10, well now it's more akin to 1 tells 10,000. I believe that if a homogeneous situation were to occur it would be handled expeditiously and promptly. I’m sure Intel has new policies in place to deal with situations like this, and other companies...
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