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Mattel and Toy Company Case Study Research Paper

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Updated: Jul 6th, 2020

Introduction

Safety of products is a very vital consideration that companies need to uphold. The case of Mattel and Toy demonstrated the consequences that a company is likely to face when it in a crisis. The company specializes in the production/manufacture of children’s toys. It announced a recall of 1.5 million toys on 2 August 2012 due to safety reasons. In the year, 2006 and 2007, the company recalled approximately 14 million others that contained poisonous lead paints and magnetic particles that were not tightly attached (Gilbert & Wisner, 2010, p. 33). The lead was harmful to young children. The paper delineates the issue of ethics besides other pertinent considerations concerning the case of Mattel and Toy.

Safety of Toys

I believe that Mattel acted in a socially responsible and ethical manner with regard to the safety of its toys because the company responded immediately after receiving complains from a retailer concerning the excessive lead in a number of toys. The company decided to stop the production of more toys in a few days when the issue was reported. The company launched an investigation to authenticate the allegation that was brought to their attention by the retailer in early July 2007.

The action taken by the company showed tokens of social responsibility towards its clients. The company could have ignored the retailer’s complaint by going on to distribute the toys to the unsuspecting customers. Likewise, it could have bribed the retailer to conceal the information and make corrections or continue supplying these defective toys. However, this was not the case. It sought to find out if the allegations were true or not. This step of actions demonstrated social responsibility on the part of the management. After an investigation, the company confirmed the allegation to be true and required an immediate recall.

On 2 August 2007, barely after a month of reporting and investigation, the company’s CEO voluntarily made an announcement requesting all customers to bring their toys back to the company because of the evident excessive lead paint that had been used during their manufacturing. The action taken by the CEO shows social responsibility, as it abides to ethics. They decided to recall all the toys totaling to 1.5 million because they believed that was the right way to safeguard the lives of children using the toys. This recall was a costly venture that the company was going to meet, but above all, it had to do that for the safety of the society. In a press statement to the media houses, the CEO said that the recalled toys were manufactured using unapproved paints. The paints had lead and magnetic components that posed health risks to children (Stanford Graduate School of Business, 2008, p. 3).

The paint used was against their own set standards and therefore, harmful. Furthermore, the company was sincere in pointing out the possible sources of the stalemate. The mess originated from one of their contractors that had provided services for the company for over 15 years. This statement demonstrates that the company was unaware of such malpractices, as the revelations surprised it too. The company had established positive public image and therefore won the loyalty and trust of the customers due to its products’ high quality. Many customers sourced their toys from the company because of its impeccable products. The company had also been in existence since 1945.

It had established a positive reputation/image as one of the best companies in the manufacturing of toys (Wisner, 2011, 16). Therefore, the announcement of these malpractices is a sign of commitment by the company to continue producing quality products that meet the requirement of the customers. If the company was motivated to make high profits, the issue could not have been given that attention. The company showed commitment, as it launched an investigation that was to help find the truth about the products. Therefore, the company aspired to ensure that quality products were produced and sold to customers.

Even if some companies had earlier on been found guilty of producing defective products, Mattel did not deserve the humiliation since it acted with a lot of care and concern when putrefied reports about its toys emerged. The company demonstrated social responsibility and ethics rather pretence. The company did all it could to solve the stalemate that had caught up with it.

Who is Responsible?

I believe that the CEO and the regional supervisors in China were responsible for the exposure of children to potential dangerous toys. The CEO, as the top management of the company, should set policies and procedures for the middle level management. The CEO failed to lead in front. For instance, after the problem was reported, the executive people recognized that that they had in one way or another failed in their duty of providing supervision on the companies that contracted their services. This was even after they had resolved that they were going to ensure that they monitor the contractors to ensure that they satisfy the threshold required by the company (Stanford Graduate School of Business, 2008, p. 3).

The supervisors from China companies or the companies subcontracted to provide the raw materials for Mattel are also to blame for the tainted lead paint. These companies defied the order by the Mattel Company of using paints that were not recommended (Peterson, 2007, p. 3).

Mattel Company had certified eight paint supplies that were supposed to be used in the manufacture of the toys. However, some of the contractors such as Lee Der and Early Light managed by Hong Li Da used paints from uncertified companies, which cost the company high prices, due to the toy recall. It also indented the reputation of the company due to the manufacturing of products that were defective and risky to the lives of the children. Another reason as to why these contractors need to carry the blame is that they used unrecommended paints because the paints were cheap thus saving on costs. Most companies in China were faced with the problem of rising costs that threatened to affect their profit margin. Hence, they turned to cheap materials to mitigate the cost.

Best Way to Ensure Safety of Children

I think that there are various ways that safety of children’s toys can be achieved. This can be achieved by putting in place stringent measures to ensure the production of quality products. Authorities with the responsibility of ensuring quality should work with zeal to ensure that products are tested and screened for quality. This could be the only mechanism of dealing with such products. Various stakeholders would respond differently to these issues. For instance, government regulators can ensure that safety of children’s toys is reached by setting up policies and procedures to curb the manufacture of such products (Gilbert & Wisner, 2010, p. 33).

One of the steps that government regulators of the US need to do it to come up with quality standards that will ensure that, before these toys are shipped in the country, they are measured to verify their quality. The US government should also collaborate with Mattel Company in its production to ensure that it produces products that comply with the set standards. The US government can also set up legislations or laws that will persecute those companies and individuals that produce sub standards products that have a negative implication to children. On the other hand, government regulators of China where these toys are manufactured have a responsibility in ensuring that the company produces toys that meet the standards.

They can form laws to persecute those companies that defy the standards set. They should also form a body that is independent having the authority to check or test the quality standards of products that are manufactured before allowing them into the markets. These initiatives will help curb the production of defective toys that may cause health implications to children. Consumer advocates are also noteworthy stakeholders in such an issue. There response may be to put in place amicable measures that can help the manufacturer of products that are safe to the children. The government should work in conjunction with such groups to ensure that companies producing mass goods to the public pass through a vetting test besides being monitored to ensure their products satisfy or meet the market standards.

The toy industry should source its materials for credible distributors and always test the products before using them. This will ensure that products meet the standards set by the authority. The company should not ignore at any one time verifying its materials before using them, as this could cost it dearly as it was the case with Mattel. Furthermore, there should be full a time supervision and monitoring of the contractors to ensure that they work and operate within the limits or under the directives of supervisors or managers. This will also ensure that the products that are produced meet the threshold. Every batch of the paint should be tested before use. All the testing should also be done at the premises of Mattel Company to ensure that the contractors are not corrupt and or use unrecommended paints (Stanford Graduate School of Business 2008, p. 3).

Retailers of children products are also notable stakeholders in the manufacturing of children’s toys that meet the standards. They have the responsibility of acting as whistle blowers in case they feel that products they are supplied with to sell to the consumers do not meet the standards. They should communicate or raise their concerns to the manufacturers or suppliers to take actions instead of selling such products in their state to the consumers. Therefore, they have the obligation of verifying whether the products they are selling are conducive for human use or not. Standard setting organizations are tremendously influential stakeholders when it comes to verifying and testing whether products satisfy the set standards. These organizations are established with an aim of ensuring that products that are manufactured are up-to-date in terms of quality.

Therefore, if these organizations could have done their jobs well, such products could not have found their way in the market. The case study portrays clearly that these organizations did not perform their duties well. All these stakeholders have different views about the best ways that can be done to ensure that children safety is attained.

The reason for the differences in their point of view is the scope of knowledge of the stakeholders, the responsibility of the stakeholders in line with the issue, the relationship that exists between individuals and the companies, individuals, and the children among many others. For instance, when it comes to the responsibility of the stakeholders in line with the issue, people who have been given the mandate of ensuring that safety standards are attained have professional experience. Therefore, their reasoning and thinking on the best way to solve the problem may not be the same with that of the customers, retailers, and or government controllers.

The Best Way to Adopt

The best way for society to protect children from harmful toys is to work in collaboration with the manufacturing companies to ensure that a credible body tests the products that they give their children. The society should not be quick at purchasing products that may put their children a risk, but should always go a step ahead and think about some of the health hazards the products they give their children can have on them. This will help in solving such problems.

The society will be able to thrive. It is also beneficial for the companies engaged in manufacturing of such products to adhere to ethical standards in order to put the interest of the children before their own self-interest of accumulating wealth (Sethi, Veral, Shapiro, & Emelianova, 2011, p. 483).

The society should decide or choose right decision besides always aspiring to do the right things all the time to their colleagues. In such a society, people will be able to live together in harmony since everybody will be the other person’s keeper. Various stakeholders have a role in keeping or protecting children from harmful toys. Parents who are the immediate and closest people and providers of these children have a role of ensuring that their children are not exposed to such harmful toys. They should consult experts before buying any toys to children. Parents should be able to seek guidance on the appropriate toys that they should buy to their children. For instance, they may seek the help of their teachers or early childhood specialists. The government has the responsibility of putting in place measures such as laws that curb the production or manufacture of harmful products.

Conclusion

In conclusion, it has become evident that some companies may defy or may not adhere to ethical standards in their business dealings. They are motivated by profit maximization rather than considering the welfare of their consumers. Business entities do these grave mistakes. It is advantageous for business to uphold ethical standards and social responsibility to ensure that the products they produce are of benefit to society. In the case of Mattel, the company was ethical to a greater extend in its dealing with the matter it had at hand. After realizing that some of the products were risky to the lives of children, it quickly recalled the toys and assured the customers that the issue was to be corrected. Such a sincere and brave measure demonstrated that the company was ethical in its practices.

Reference List

Gilbert, J., & Wisner, J. (2010). Mattel, Lead Paint, and Magnets: Ethics and Supply Chain Management. Ethics & Behavior, 20(1), 33-46. Web.

Peterson, J. (2007). Mattel steps up safety rules after a spate of recalls over lead paint on toys, it says it will conduct more product tests and factory inspections. Los Angeles Times (CA), 1(1), 3. Web.

Sethi, S., Veral, E., Shapiro, H., & Emelianova, O. (2011). Mattel, Inc.: Global Manufacturing Principles (GMP) – A Life-Cycle Analysis of a Company-Based Code of Conduct in the Toy Industry. Journal of Business Ethics, 99(4), 483-517. Web.

Stanford Graduate School of Business (2008). Unsafe for children: Mattel’s toy re calls and supply chain management. London: Routledge. Web.

Wisner, J. (2011). The Chinese-made toy recalls at Mattel, inc. Business Case Journal, 18(1), 16-30. Web.

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