The Politics of Product Safety: Top Management Team Political Ideology and Serious Medical Product Recalls

There is growing research exploring the influence of executives’ political ideologies on firm strategy, but little is known about how these ideologies influence product quality. Leveraging research that suggests liberal firm leaders prioritize customer safety, whereas conservative firm leaders emphasize firm financial returns, we theorize that a firm’s top management team’s (TMT’s) political ideology influences the number of serious medical product recalls that a firm initiates and how quickly the firm initiates them. Analyzing political donations recorded by the Federal Election Committee from top executives of 88 firms that had 4,072 serious medical product recalls from 2002 through 2015, we find that as firms’ TMTs are more liberal, they issue fewer recalls, but as firms’ TMTs are more conservative, they initiate recalls faster. Results suggest that firms with TMTs one standard deviation more liberal than the mean issue 1.10 fewer recalls per year, but take 22 days longer to initiate them. Findings from a post hoc analysis lend support to our theorizing, as we find that product quality-related adverse events act as a mechanism explaining the relationship between TMT political ideology and recalls. Firms with more liberal TMTs experience fewer product quality-related adverse events, and this reduction in adverse events acts as a mediator to partially explain the reduction in the number of recalls that more liberal firms initiate. Post hoc analyses provide support for an important firm implication; firms with more politically diverse TMTs have fewer recalls, similar to more liberal TMTs, and faster recalls, similar to more conservative TMTs. This paper was accepted by Victor Martínez-de-Albéniz, operations management. Supplemental Material: The data files are available at https://doi.org/10.1287/mnsc.2023.03045 .