Resource Gaps and Resource Orchestration Shortfalls in Supply Chain Management: The Case of Product Recalls

• Author: Christopher W. Craighead,David J. Ketchen,Kaitlin D. Wowak
• Date: 01 July 2014
• DOI: http://doi.org/10.1111/jscm.12047
• Published date: 01 July 2014

RESOURCE GAPS AND RESOURCE ORCHESTRATION

SHORTFALLS IN SUPPLY CHAIN MANAGEMENT: THE

CASE OF PRODUCT RECALLS

DAVID J. KETCHEN JR.

Auburn University

KAITLIN D. WOWAK

University of Notre Dame

CHRISTOPHER W. CRAIGHEAD

The Pennsylvania State University

Product recalls are often painful to endure, but they also create important

opportunities for learning. Although past research implicitly treats recalls

as monolithic, our grounded theory investigation uncovered four types of

recalls. Each type of recall provides insight about the adequacy of a firm’s

resource endowments and how a firm orchestrates the activities around its

resources. For researchers, our study highlights the value of examining the

confluence of recalls, resource gaps, and resource orchestration shortfalls

to better understand the role of resources within supply chain manage-

ment. For managers, our study highlights the value of knowing what type

of recall a firm is facing and how to remedy the problems that led to the

recall.

Keywords: product recalls; strategic resources; resource orchestration; supply chain

disruptions; signals; learning from failure

INTRODUCTION

Managers have increasingly turned to supply chains

as a source of value creation and competitive advan-

tage (Ketchen & Hult, 2007). Accordingly, many

researchers have examined the performance implica-

tions of supply chain phenomena. Of particular inter-

est is the role of strategic resources—resources that are

valuable, rare, inimitable, and nonsubstitutable (Bar-

ney, 1991). Although the competitive value of strate-

gic resources such as supply chain knowledge has

been demonstrated (Wowak, Craighead, Ketchen &

Hult, 2013), little is known about how managers

position their firms for future success by closing

resource gaps and resolving resource orchestration

shortfalls within supply chains.

Unique opportunities for examining resources arise

when bad, faulty, or tainted products enter a supply

chain and must be recalled. In August 2013, for exam-

ple, tainted salad mix was recalled by Darden Restau-

rants after stomach illnesses plagued more than 400

customers in 16 states. When failures like this are

detected, managers usually seek to quickly recapture

the bad products to minimize harm to consumers and

to their firm’s finances and reputation. Given that

modern supply chains are complex, dynamic, and

international in nature (Craighead, Blackhurst, Run-

gtusanatham & Handfield, 2007), recalls are becoming

increasingly difficult for firms to manage.

Although recalls are painful to endure, Sitkin (1992)

suggests that navigating failure is essential in order for

firms to be able to adapt to changes in their environ-

ment and achieve superior long-term performance. If

firms do not experience and learn from failures, they

may enjoy short-term success, but are more likely to

face long-term difficulties—this is known as the “para-

dox of success” (Audia, Locke & Smith, 2000). Accord-

ingly, we argue that failures can be an effective

mechanism to examine resources within supply chains.

More specifically, we suggest that supply chain fail-

ures will reveal learning opportunities about: (1) a

firm’s resource endowments and (2) how a firm

orchestrates activities around their resources.

Volume 50, Number 36