“MATTEL: CRISIS MANAGEMENT OR MANAGEMENT CRISIS”

The problem surrounding Mattel Inc. is their mismanagement of international subcontractors and vendors and the production of certain toys (the manufacturing process), as well as their inability to adapt their marketing strategy or product to the constantly changing “demographic and socioeconomic trends.” This is supported by Mattel’s legal battle with Carter Bryant and MGA, their forced recall of certain toys that were manufactured overseas, and the increasing rate at which traditional toys are becoming less appealing to today’s young audience. Essentially, Mattel’s mismanagement and oversight lead to violations in terms of ethical and social responsibilities and safety standards.

Mattel is a global toy company that has been around since 1949. They are the company that introduced Barbie and Hot Wheels to the world as well as many others toys. Mattel has license agreements with Walt Disney and Nickelodeon. In

According to FDA.gov 2009, the definition of recalls is, an action taken by a company to remove a product from shelves. There are three classes of recalls and two other types of recalls mentioned on FDA.gov. Class I recall involves a situation in which there is a probability that the use of or exposure to a product will cause adverse health effects or death. (FDA, 2009) Class II recall involves a situation in which use of or exposure to a product can cause temporary or medically reversible adverse health consequences or where the probability of serious adverse health effects is remote. (FDA, 2009) Class III recall involves a situation in which use of or exposure to a product is not likely to cause adverse health consequences. (FDA, 2009) Market

In 2004, Mattel Inc. first filed a lawsuit in Los Angeles County Superior Court claiming that its former employee, Carter Bryant, violated copyright infringement and breach of contract. Mattel is widely known for their popular Barbie dolls and MGA Entertainment have their Bratz dolls, which were the popular modernized Barbie in the 2000’s. In 2008, a federal jury ruled in favor of Mattel because they believed Mr. Bryant developed the concept of the Bratz doll while working at Mattel, then leaving and pitching his idea to MGA (“Barbie”). Mattel was awarded $100 million, however, the verdict was appealed resulting in a retrial.

Even though businesses do not like to recall its products, but when there is a safety problem involved a recall takes precedent over rather a company will lose money. Recalls are necessary to protect consumers from injuries, and to save lives. Recalls are beneficial to everyone when expedited effectively. From the act of negligence a company could publicly be exposed which could result in profit loss due to consumers being afraid or refuse to purchase the product, and the stock values could fall if the company is publicly traded. This can be very damaging for a business and could ultimately force the company to go out of business (Seaquist, 2012).

Many times these products needs to be recalled as they do not meet the safety standards and tend to hurt the image of a well-known organization like Mattel. Therefore, Mattel’s strategy was to focus on making most of its core products at their own manufacturing facilities, and outsource the products that are less popular and non-core.

1. The decision facing Mattel is whether to continue to produce their products internationally where cost are low, or produce them in the United States where costs are significantly higher but quality is better. Mattel might want to even reconsider going global if there sales are decreasing more internationally than in the United States. Mattel needs to determine how many of the products produced internationally were recalled versus the amount of products produced in the United States that were recalled. Mattel also needs to decide how they are going to advertise their products in a way that will convince consumers in the external environment to buy their products, without having any

Through studying the entire retail toy industry, we have been able to understand the complexity of the industry in which Toys "R" Us operates. Upon completion of the analysis, we realized that the industry is growing stably,

To achieve this about 65 percent of its toy manufacturing was moved to Asia where its products could be produced cheaper. In doing so Mattel now has to work within the culture of its manufacturing facilities to ensure healthy and safe operations to its employees. This means that wage, possible child labor, and other ethical issues could arise, thus as stated before the Global Manufacturing Principles were created and implemented.

In the past four years, Mattel has had to recall nearly 30 million of toys due to safety concerns such as lead level in paint, magnets and dangerous toy parts or design.

Here the company under consideration is “Toy R US”. This company facing few major current issues which are effecting the PR of the company as well as effecting the business of the company. Toy R US is a famous brand which makes toys for the kids, it has branches in many countries which makes it an international company. This company made its strong market position in just a decade, before that this was not much famous among customers. Company’s mission is about providing affordable toys all over the world so those

What is a crisis management? It is an unexpected crisis that happens on the company that will affect the trust and loyalty of the stakeholder. It can be extremely costly because it will affect the company reputation and brand. For example like financial failure from poor business management, workplace violence, fires, cybercrime, computer viruses, product tampering or union strikes and other external issue like damaged economy that causes from London bombings, terrorists attacks on 11 September and others. The SHRM 2005 report indicates that only 56% organizations created or revised their disaster preparedness plans but 45% did not after the terrorist attacked on

Others felt that they should consider Indonesia as a way to take advantage of low labor costs and very attractive exchange rates. Mattel currently operated a plant in Indonesia that produced Barbie® dolls. Montalto had to decide whether Mattel should go forward with the new China plant, build a plant in Malaysia or Indonesia, expand one of the existing facilities, or outsource the surplus die-cast volume through VOA. Company Background Based in California, Mattel, Inc designed, manufactured, and marketed a broad variety of toy products. The company’s core product lines included Barbie fashion dolls, Hot Wheels die- cast toy vehicles, Cabbage Patch Kids, Fisher-Price preschool toys, and Disney toys. Most of these toys were made overseas, primarily in southeast Asia. Mattel had wholly owned manufacturing facilities in China, Malaysia, Indonesia, Mexico, and Italy. Mattel was founded in 1944 by Elliot and Ruth Handler. Neither Elliot nor Ruth had much business experience or capital, but they both had dreams. The post World War II demographics of a huge baby boom plus a virtually toyless marketplace provided a unique opportunity to gain a place in a growing toy market. Mattel’s first products, simple picture frames and doll house furniture, met with mixed success. The first really big hit was a music box. By partnering with another toy inventor, they developed a music box that could be

1. Do you believe that Mattel acted in a socially responsible and ethical manner with regard to the safety of its toys? Why or Why not? What should or could Mattel have done differently, if anything?

MATTEL TOYS RECALL CASE STUDY Product  recall:   On  August  14,  2007,  the  U.S.  Consumer  Product  Safety   Commission  (CPSC)  in  cooperation  with  Mattel  announced  five   different  recalls  of  Mattel's  toys.  On  September  4,  Mattel   announced  three  more  recalls.  Some  were  due  to  the  use  of  lead   paint,  while  others  were  due  to  small  magnets  coming  loose.             On  August  2,  2007,  Mattel's  Fisher-­‐Price  subsidiary  recalled   almost  one  million  Chinese-­‐made  toys,  including  the