Abstract
In this study I examine the effect of a firm's reputation for product quality on its effort in learning to reduce its product defect rate. Theoretical ideas on the motivation of learning associated with social aspiration levels and the self-serving bias combined with social categorization suggest that poor quality reputation firms are more likely than their counterparts with a good reputation to attend to potential product defects and consequently reduce their defect rate. However, a stream of research on the motivation of learning stemming from historical aspiration levels and slack search leads to a different argument: a reputation for good quality is more likely to provide firms with a motivation to avoid product defects. I build upon these two competing arguments and hypothesize that stronger motives for learning exist in situations where firms have either a weak or strong reputation for product quality. My study of product recalls in the US automotive industry highlights an inverted U-shaped relationship, indicating the liability of an intermediate reputation in reducing product defects.
Original language | English |
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Pages (from-to) | 676-703 |
Number of pages | 28 |
Journal | Journal of Management Studies |
Volume | 46 |
Issue number | 4 |
DOIs | |
Publication status | Published - 2009 Jun |
All Science Journal Classification (ASJC) codes
- Business and International Management
- Strategy and Management
- Management of Technology and Innovation