report subject business ethics case study mattel responds to ethical challenges

In this regard, the company''''s business partners are required to uphold strict product standards for safety and quality while also abiding by procedures that meet Mattel''''s safety and qual

NATIONAL ECONOMICS UNIVERISITY SCHOOL OF ADVANCED EDUCATION PROGRAMS

REPORT SUBJECT: BUSINESS ETHICS

CASE STUDY:

MATTEL RESPONDS TO ETHICAL CHALLENGES

STUDENT’S NAME: Lé Bao Ngoc - 11224672 CLASS: International Business Administration (64D)

LECTURER: Nguyén Bich Ngoc

Hà Nội — 2023

TABLE OF CONTENTS

1 Unethical Behaviors in the

2 More Important Values in the

2.1 Respecft and PrIVaCy c2 20121 1c H TH TH TH HH trệt 2 P2AANt na 413 3 2.3 Exelllence and na 4 2.4 Philanthropy and Community Development 0 0.0c ccc ccccccceeeteeeeeeees 5

2.5 Equality and FaIrne§s c1 1212212211121 118111111 tr HH He 5

3 Responsible People in the Unethical Behavior in the Case and Why They

Were

Responsible 6

4, Theories to Justify Unethical Behaviors in the Mattel”s Case 7

Al UHlitarlanism TheOTy c1 0 2 121112112212 12 1551155118111 re 7 4.2 Deontologlcal THheOTy - i2 11 1121111111121 11111111111 11111110111 11k re 8 4.3 Stakeholders and Shareholders Theory - 222 2222222121221 9 CONCLUSION 11 REFERENCES 12

INTRODUCTION

This case study examines Mattel's response to moral dilemmas This analysis concentrated on numerous ethical issues that are connected to the firm's products at various supply chain levels because it is a worldwide company that specializes in the selling of children's toys The analysis attempted to identify those who should be held accountable for the case's immoral actions The research used a number of ideas to support why the case's described acts were genuinely immoral, in addition to demonstrating why such people should be held accountable Finally, the investigation also uncovered some of Mattel's key principles, which could be leveraged to demonstrate the company's dedication to excellent corporate social responsibility for the benefit of stakeholders and shareholders alike

CONTENT

1 Unethical Behaviors in the Case

Sales of unsafe products

The investigation showed that, despite Mattel's best attempts to uphold high standards, several of its foreign manufacturers have not done so This manufacturer had to recall toys in 2007 after a European store found lead

on its surface When this issue was tracked down, it was discovered that Lee Der, the company's manufacturer in China, was to blame, and an estimated 10 million personal toys created in this nation were impacted Later that month, in a different incident, Mattel was required to recall a number of toys due to strong magnets that may easily break away and present a choking hazard to young children In this sense, it was rationalized that ingesting one magnet could cause the infant to ingest more magnets, which could result in a deadly complication As a result, many parents filed lawsuits alleging that the toys hurt their kids

2 More Important Values in the Case

2.1 Respect and Privacy

The company's internet marketing guidelines showed respect for privacy Because Mattel has frequently addressed children's privacy in relation to the use of technology in their product promotion, this appears to be a value

at this corporation In order to make judgments about the future and specifics of online marketing techniques, the corporation recognizes the

parents of the children Children are thus given the option by their parents

to submit or not submit their personal information to the marketing website Mattel has made steps to explain its stance on Internet-based marketing tools, including the Hot Wheels website, to both kids and adults Mattel shows that it takes its job of marketing to children seriously by guaranteeing parents that their children's privacy will be maintained 2.2, Commitment

The company's handling of different social, economic, and technological concems demonstrates a high level of devotion According to reports, the corporation is dedicated to implementing and ensuring that all of its manufacturers and contractors around the world abide by the Global Manufacturing Code of Conduct When interacting with other manufacturers as well as industries, the corporation demonstrates a strong dedication to corporate ethics The company wants to make sure that all of its contracted and owned production facilities operate in accordance with corporate requirements Other tenets of this commitment include increased safety, higher pay, and adherence to local regulations The company's primary objective is to establish and promote ethical business practices because it 1s devoted to using its global standards to prevent acts of violence without punishing their victims Additionally, the business is dedicated to its staff through raising their skill level This increases its production and presents it with new opportunities In a different light, it demonstrates a dedication to fostering a positive working environment with

its business partners The business's worldwide code of conduct is another sign that it is dedicated to promoting and upholding moral principles 2.3, Exellence and success

The company's commitment to excellence and success may be seen in the fact that it only partners with organizations that uphold high ethical standards In order to participate in Mattel's quality and success strategy, a partner must adhere to both state and federal laws In addition, the partner should support Mattel in safeguarding its assets and respect the company's intellectual property For instance, maintaining long-term business relationships with partners would be made possible by the protection of Mattel's patents and copyrights

The efforts made by Mattel to attain high product safety and quality standards as well as to safeguard the environment and customs were also marked by excellence and success Additionally, Mattel promotes careful product monitoring, assessment, and compliance In this regard, the company's business partners are required to uphold strict product standards for safety and quality while also abiding by procedures that meet Mattel's safety and quality requirements

Mattel maintains that all manufacturing facilities should explicitly permit on-site inspection by either a party Mattel has designated or by Mattel itself This is part of their help to compliance Furthermore, such partners are required to provide full access to records and an annual compliance statement by quality assurance

Due to the establishment of an impartial monitoring organization (MIMCO), Mattel developed a solid international reputation The business anticipates maintaining this body to provide ongoing checks and balances

to ensure the production of high-quality products When a partner's products fall short of certain requirements for quality and standardization, Mattel is prepared to collaborate with them to find a solution This demonstrates collaboration However, if the partner doesn't follow the suggested corrective steps, the firm will fail, and this is seen as a crucial step in the process of business improvement

2.4 Philanthropy and Community Development

Through the children foundation, it can be inferred that Mattel promotes philanthropy and community improvement Employees and the firm are both urged to participate in an annual campaign to support local children's projects through personal donations

The corporation gave the UCLA Children's Foundation a multi-year, $25 million gift This gift was intended to assist the hospital in constructing a brand-new, cutting-edge facility

Computer learning laboratories are used by the corporation as part of its Family Learning Program to help kids with their foundational abilities 2.5 Equality and Fairness

The way this firm treats its partners and employees demonstrates how much

it values equality and justice The company's Global Manufacturing Principles demonstrate how much it values the ethical, intellectual, and

cultural diversity of the nations where it operates These guidelines also provide common requirements for the business's manufacturers, which benefits both customers and staff

The company's guiding principles cover issues including forced labor, salaries, discrimination, and the right to form unions for its workers Employees are paid a minimum wage that complies with regional industry requirements on this note All employees are given a safe working environment by the company, which also respects their rights and religious convictions

3 Responsible People in the Unethical Behavior in the Case and Why They Were Responsible

The unethical actions in this instance might be attributed to three major players These include Mattel Inc., its business partner, and the Chinese government The failure of Mattel Inc to perform efficient inspection and monitoring in the entire supply chain may be blamed for the lead paint that was found on the surface of the toy and the loose magnet In response to the allegations, it should be mentioned that Mattel's product design and quality control were subpar Therefore, the quality assurance managers and design engineers at Mattel should be held accountable for this

On the other hand, Lee Der, the company's Chinese manufacturer, can be held accountable for the lead paint issue This is because they were aware

of Mattel's policy against hiring outside vendors but chose to ignore it by working with a contractor who provided lead-tainted paint, which caused the entire issue Due to escalating labor and raw material expenses, Lee Der

Company appears to have made this error on purpose in order to save money Therefore, the accountable parties in this situation were the top managers of Lee Der Inc as well as the procurement manager and the

human resources Manager

The government of China is held responsible for the unethical behavior given that they failed to properly protect citizens Therefore, it shows that her international trade minister, human resource manager, and top-level management of Lee Der Inc contributed to not only the lead issue but also the loose magnet problem in the toys in their attempt to enhance supervision of export goods

4 Theories to Justify Unethical Behaviors in the Mattel’s Case There were four types of theories that were considered to justify unethical behaviors in Mattel’s case These include: Utilitarianism theory, Deontological theory, Stakeholder theory, and Shareholders theory 4.1 Utilitarianism Theory

Based on the results of the actions taken, this theory was applied to support the claim that the behaviors were immoral (Baier, 1994) According to this view, unethical behavior implies that the action taken had unfavorable effects, while ethical behavior meant that the action had favorable effects It was clear that Lee Der and Mattel had strained corporate and commercial ties as a result of the use of lead-contaminated paint on toys Therefore, Lee Der must have felt the harmful effects of this Additionally, it might hurt Lee Der's reputation as a global brand Because so many toys that didn't sell

that year were recalled, Lee Der and Mattel were logically expected to see a drop in business revenue Therefore, it was obvious that the use of lead- tainted paint on toys had a detrimental effect on both enterprises based on the adverse effects that support an action as unethical (Comman and Lehrer, 1974) By placing blame on Lee Der's deliberate use of unqualified contractors to supply paints, on Mattel's quality assurance division and product design, and on the Chinese government for failing to protect its citizens, it is possible to conclude that there may be negative effects on the parties directly involved All of them thus support the notion that the behavior was immoral Last but not least, lead is a deadly metal when swallowed As a result, painting toys with lead paint has the potential to significantly raise the risk of death Additionally, if youngsters swallow a loose magnet from a toy, it might be fatal because it will draw other magnets to the child's stomach

Based on the aforementioned, utilitarian theory takes into account all victims as suffering from simultaneous negative consequences (Donaldson and Preston, 1995; Sherman, 1981; DiMaggio and Powell, 1991) If all people are pleasure-seekers (Mill, 1979; Gold, 1995), then there won't be any enjoyment when children die and workers are fired as a result of the use of lead paint on toys and loose magnets in such products

4.2 Deontological Theory

This thesis relied on two tenets to support the notion that the actions were unethical According to DiMaggio and Powell (1983; Lehrer, 1974), these concepts involved univerzability and hypothetical imperatives According

to these deontological theory notions, a person acts unethically if they would not want the same thing done to them Therefore, neither Lee Der nor Mattel Inc employees would want to give their kids toys with lead paint and loose magnets on them In other words, no parent would want their child to perish as a result of the threats posed by these behaviors Another perspective asserts that each individual has feelings and values to uphold and that they should be treated with respect and decency (Carroll, 1993; Boatright, 1994; Burrell and Morgan, 1979) In light of this, it is immoral to act in the opposite of these Sales of dangerous and harmful toys

in Mattel's case demonstrated that Lee Der and their parent business, Mattel Inc., did not regard human dignity, making the act unethical Finally, deontological principles, which demand that people execute their obligations without regard to their own interests, are the basis for the failure

of the Chinese government

4.3 Stakeholders and Shareholders Theory

The theories address the following topics: what makes a business successful (Evan and Freeman, 1983); the aim of a business (Wicks and Freeman, 1998; Hawke, 2005; Jones, 1995a); and the moral obligations of a business (Wicks et al., 1994; Weaver and Trevifio, 1994) Therefore, as was observed in Mattel's instance, unethical action does not balance the three factors

Contracting the business that supplied deadly paint was a business decision made to suit the interests of the shareholders and boost shareholder value (Phillips, 1997; Etzioni, 1988; Jones, 1994) However, the corporation