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The three virtues that apply to the case study are honesty, fairness, and perseverance. Honesty is the act of telling the truth. It causes individuals to refrain from exaggerating their merits or playing down other people’s credentials to gain something. The virtue stems from valuing integrity and standing by one’s principles despite the outcome. In business, honest persons insist on revealing all aspects that affect the transaction. They take conservative interpretations of business decisions and will stick to the truth even when other options are available.
Perseverance is the ability to push on even when matters are out of control. Virtue requires people to move beyond their present circumstances and focus on the future. A persevering business person or employee has goals, and will always work towards them even when prevailing circumstances do not favor them. These individuals show signs of virtue by staying positive almost all the time. They utilize the assistance of others to help them get past painful and difficult situations. Furthermore, a persevering person also knows how to adapt to their environment because surroundings will always keep changing. The virtue causes one to accept that errors will occur and that they need to move on from there.
Fairness is an act or process that is equitable and honorable. It is closely associated with justice and may arise in several situations, personally or professionally. Justice deals with broader societal issues, while fairness is more closely associated with individual interactions. At the workplace, pride, competition, and financial rewards may cause people to engage in unfair acts. For instance, they may take credit for other people’s work or may allocate assignments to those who do not deserve them. Fairness stems from people’s ability to either withhold or impose benefits and burdens on others. Parents, teachers, inspectors, supervisors, and workers can bestow benefits like support, approval, and praise on others. On the other hand, they can impose the burdens of blame, criticism, or disapproval on others, as well. Therefore, a fair result is one that gives people what they deserve.
How the virtues apply to Mattel
In the middle of the implementation of its global code of conduct, Mattel suffered from the lack of company support for its ethical framework. Most of the employers and managers knew that their competitors did not implement similar codes of conduct, so they did not suffer from the economic losses that came with them (Elikann, 2000). This kind of thinking was indicative of a lack of virtue ethics in the organization. The company was not committed to honesty as a policy in all its business endeavors. If Mattel had ingrained expectations of quality in its personnel from the onset, then the chances are that external conditions would not have mattered. In competitive climates, it is quite easy for stakeholders to give precedence to success over honesty. The organization claimed that it valued honesty, but when it came down to its business practices, most individuals fell short. Their actions were different from their rhetoric.
Mattel had a hard time when implementing the global code among its overseas partners (Sethi et al., 2011). However, if it had incorporated the virtue of honesty in its safety and quality codes, the chances are that the product recalls would not have occurred. The company had a series of standards that it imposed on its overseas manufacturers. It required them to allow for site inspections, access to data on compliance, and send annual compliance statements to them. The problem with these standards was they placed a huge responsibility on overseas businessmen whose ethical commitments were questionable. Mattel had a responsibility to check on the product quality and safety of their products when they entered the country. However, since it is not possible to examine all batches, then organizations need to listen to their clients and act in accordance. Mattel received complaints from its clients concerning their toys between 1998 and 2001. The firm did not report these complaints to the Consumer Product Safety Commission. Therefore, the firm’s representatives acted dishonestly. They prioritized profit-making over truth-telling, and this affected their credibility. If the company has instilled virtues of honesty in its quality parameters, the chances are that they would have prevented the product recalls they experienced.
The virtue of perseverance is a critical one in the business environment in which the company operated. In the 2007 product recall, it appeared as though the company had hit rock bottom, and it would not rise from that position. Several red flags arose during the implementation of the global manufacturing principles, and they should have been nipped (Bannon & Vitzhum, 2003). Adherence to the ethical code of conduct began to decline after management realized that the code was taking a toll on their finances. They also realized that getting their vendors to commit to their product quality standards was a problem. It was this difficult aspect that dissuaded management support and led to the code’s decline. If the organization had cultivated a spirit of perseverance in its senior and junior level staff, the chances are that they would have insisted on compliance with the code. Employees would have pushed on with the GMP code regardless of how difficult implementation had become. Management faced minimal resistance when things were easy, but when the going got tough, most people opted out. Therefore, this virtue would have taken the company through the hardest phase of the code and prevented the safety and quality crisis of 2007.
Fairness is yet another virtue that would have contributed to better compliance with the code of conduct. Businesses have become increasingly competitive to the point of denying others what they duly deserve. A relationship between a supplier and business owner ought to be based on fair principles. The two entities should support one another in a mutual relationship. Sadly, this is not what happened between Mattel Inc and its suppliers when they came together. The overseas contractors compromised on product safety because they were trying to make more money than their agreement would allow them. For manufacturers who are so close to the margin, it is always tempting to look for shortcuts to survive. Many Chinese manufacturers are often pushed beyond the limit by their overseas partners (Barboza & Story, 2007). Mattel should have been fair when drafting its contract with these entities. It should have listened to what the manufacturers find fair and compensated them duly. This approach would have prevented their use of shortcuts when making Mattel’s toys. If the suppliers were treated fairly, they would have felt accountable to Mattel, and probably refrained from using dangerous components in the manufacture of the company’s toys. This would have prevented product recalls.
Most useful normative ethical theory
The most useful theory is virtue ethics. Aristotle’s ideas revolved around practical wisdom, virtue, and happiness (life fulfillment). The scholar asserted that one could only live a fulfilling life if one possessed certain virtues, and the longer one practiced them, the more fulfilled one became. Aristotle also taught that moral virtue was not an absolute concept. One had to find a balance between two kinds of vices. For instance, he stated that courage was the right balance between imprudence and cowardice. This approach to ethics is quite realistic as it acknowledges that life has no absolutes (DeGeorge, 2000). The matter in question revolves around a business corporation that struggles with a series of complex situations. If the company prescribed a school of ethics that focused on absolutes, the chances are that most of the ethical challenges in the company would have gone unabated. Virtue ethics leaves room for the application of practical wisdom by finding the average among choices available. The company had the option of disclosing its ethical codes publically or doing so privately. Both choices would have been acceptable, but finding middle ground was essential to the success of the organization.
Virtue ethics advocates for virtuous acts based on doing the right thing. Aristotle believed that people should not choose virtues because of external standards; instead, it should be something that they do because of it right. People at Mattel Inc. did not grasp this concept. They did not take ownership of the global code of conduct because it was viewed as a creation of top leadership. Had they formed a habit of acting virtuously, they would have followed through on vendor compliance. The product recalls that took place were a manifestation of a lopsided and externally-imposed ethics code. Individuals need to form a habit of always doing right, irrespective of how inconvenient it is.
A utilitarian school of thought would focus merely on the consequences of a certain choice. Utilitarian ethics would likely have guided the actors in the case study to choose profitability over ethics compliance as the benefits of the latter were less obvious. The problem with utilitarianism is that it mostly focuses on consequences, yet it is not always possible to foresee the consequences of one’s actions. Mattel’s management did not foresee the product recalls that would emanate from a compliance code of contact for global partners. Conversely, deontological ethics focuses on acting by one’s duty. This means that some external moral law defines one’s actions. In this regard, the moral actor would still lack the internal prerogative to act ethically. The case is quite complex and would not fit into an absolutist stance.
Virtue ethics focuses on the self and how one can develop a strong character. Therefore, the principle applies to every single individual in an ethical situation. It requires them to develop strong principles that will guide them in future interactions with others (Hartman, 2008). The theory is based on variables and contingencies; this means that it can be applied in difficult situations. Mattel’s case requires a flexible theory that would incorporate different situations rather than one that prescribes rigid rules. Members of the company, at different levels, needed to decide how to interpret the global code. Therefore an accommodating theory like virtue ethics was best.
Bannon, L. & Vitzhum, C. (2003, April 30). One toy fits all: How industry learned to love the global kid. Wall Street Journal, p. A7.
Barboza, D. & Story, L. (2007). Toymaking in China, Mattel’s way. Web.
DeGeorge, R. (2000). Business ethics. NY: McMillan.
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Elikann, B. (2000). Mattel Inc. will shed its money-losing learning co. unit. Pittsburgh: Pittsburgh Post.
Hartman, E. (2008). Socratic questions and Aristotelian Answers: A virtue based approach to business ethics. Journal of Business Ethics, 78(3), 313-328.
Sethi, P., Veral, E., Shapiro, J. & 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.