Mattel Corporation, known as the largest toy company in the world, is a publicly traded organization with a market capitalization of over $6.5 billion. Employing approximately 36,000 people worldwide in 43 countries, their products are well-known and sold in over 150 nations (Mattel.com). With such winning odds as mentioned, it is hard to imagine that a company readily known to children and adults across the globe would become even better known for the company that produced toys made with lead-based products. This assignment will discuss whether or not Mattel acted in an ethical and socially responsible manner in their decision to recall defective toys, what they perhaps could have done differently to avoid this issue, and the best way society can continue to protect children from potentially harmful toys.
While Mattel is considered the largest toy company in the world, it has been faced with some tempestuous challenges due to safety concerns revolving around toy design and manufacturing in China. In August 2007, Mattel voluntarily recalled 1.5 million toys manufactured in China because they contained too much lead paint (Lawrence & Weber, 2011). These recalls included popular items such as Elmo, Big Bird, and Dora the Explorer by Fisher Price. These toys were products from a contract manufacturer owned by Mattel but produced in China.
Under normal operating conditions, Mattel requires that their manufacturing partners use paint from approved and certified suppliers with specific procedures in place to test and verify the validity of the products; in this particular instance however, procedures were not followed. It would appear that Mattel’s code of conduct called “Global Manufacturing Principles” which requires all business partners to commit to ethical standards relating to safety, wages, and adherence to local laws were not being upheld in China (Mattel.com).
Toys were pulled from the shelves of retailers, and a media frenzy ensued as public pressure was mounting. By the time the dust had settled from the recall, Mattel had recalled over 2.2 million toys that were manufactured in China because of unacceptable levels of lead paint. Their stock prices suffered drastically as they were responsible for a $40 million charge relating to the recalls of their products. Customers were threatening to boycott Mattel and all toys that were made in China. It was eminent that Mattel had to determine what next steps they would take to recover from such a crisis and move quickly in order to protect their brand.
The lead paint laced toys came from one of Mattel’s contracted factories in China called Lee Der. This company manufactures toys using products from subcontractors; one of these contractors was Hun Li Da, responsible for violating Mattel’s lead paint standards by using an uncertified paint supply. With Mattel recalling an ominous amount of toys shed light on the fact that many U.S. name brands that have manufacturing facilities...