Southern Pasta, a company recently acquired by Mike’s has delivered pasta shells contaminated with Salmonella to its largest customer. Mike’s needs to decide how to prevent the infection from reaching the public while minimizing financial losses and damage to its reputation. Mike’s can hide this information from the restaurant chain or even instruct them to pasteurize the food to inactivate the bacteria. However, any slip-ups can lead to regulatory issues and multi-million dollar lawsuits.
It is recommended that Mike’s should initiate a food recall. Although this is a costly option, but it ensures public safety and garners customer and employee goodwill, which will be beneficial in the long-term.
* Number of words: 108 Table of Contents

Situational Analysis 1
Problem 2
Options 2
Criteria for Evaluation 2
Evaluation of Options 2
Recommendation 5
Action Plan 5
List of References 6
Exhibits 7

Situational Analysis

Michael’s Homestyle Pasta, a leading supplier of gourmet stuffed pasta shells, has recently acquired its arch-competitor, Southern Pasta Company. Mike’s faces a corporate nightmare as the recent lot of seafood stuffed pasta shells shipped out by Southern to a restaurant chain is tainted with Salmonella. The prior knowledge of the poisoning and the demand spike due to New Year festivities further aggravates the problem from an ethical and operational standpoint.
The recall costs can be to the tune of $ 0.5 million, which represents almost 2% of the revenues. There is also an impending risk of losing the restaurant chain, which is the largest customer for Southern Pasta, as this is not the first occurrence of Salmonella poisoning in Southern’s products. The restaurant chain is valuable to Mike’s as it accounts for $ 3.5 million of the $ 8 million revenues of Southern and is one of the primary reasons for the acquisition. Losing this