Serious enigma was caused by the American public related to the product safety in 2007, when a novice record was broken by the quantity of product recalls. Following a short-term decline in 2008, the number and retail value of recalled units have been increasing, despite various efforts pushed by government agencies and private companies to combat this tendency. Currently, many nations including China itself are expressing serious concern over unsafe or adulterated food sold or made in China. What are the underlying reasons for many Chinese suppliers to adulterate product?
When law enforcement is still not strong in China, what can western makers do to minimize the chance of product adulteration? We first identify four underlying variables that create incentives for a few Chinese providers to make products that are unsafe, to develop effective deterrence mechanisms. Later on we suggest innovative suggestions to dissuade Chinese vendors from developing adulterated products structured on two underlying strategies: (1) developing economic incentives via contingent payments, and also(2) producing a social benefit by cautioning public exposure by power of Internet and social networking webpages.
PUBLICATION DATE: July 15, 2014 PRODUCT #: BH619-PDF-ENG
This is just an excerpt. This case is about GLOBAL BUSINESS
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