The Ethical And Social Responsibility Of The Mattel Toys

Sales in Asia could help combat Mattel’s plateauing market in the United States. The company seemed like it was in a strong position.

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.

The biggest environment force affected Mattel recently has been legal and regulatory with the high levels of lead paint found in their die-cast toys in 2007. This issue created a voluntary recall from Mattel for over 2 million toys and created doubt in customers to the quality of their Mattel toys. Mattel responded by immediately implementing a check system to accept paint only from certified suppliers, tightened controls throughout the production process and testing every production run to ensure compliance. Mattel said that it is working in cooperation with the U.S. Consumer Product Safety Commission and other regulatory agencies worldwide. Mattel is also working with retailers worldwide to identify and remove affected products from retail shelves.

Toys R Us' financial troubles are not new. As part of a broad reorganization, the Wayne, N.J. company, who at one time was the nation's second-biggest toy retailer, decided to close their Kids R Us stores and sell of its Imaginarium stores, which sell educational products and be left with Toys R Us and Babies R Us. By doing this Toys R Us has planned that over the next year it would reduce operating expenses and cut capital spending. In addition, it planned to mark down prices

Mattel is starting to take a step in the right direction, according to Renae Merle from The Washington Post, “Mattel said it was strengthening its process for preventing the use of lead based paint, it will only permit paint from certified suppliers and require every batch to be tested, company officials said” (Merle 1). 80% of toys in the United States are imported from China, according to Renae Merle, and 65% of those toys are created by Mattel. Although that is a step in the right direction, that still leaves 15% of the toys in the United States at a higher risk of having high traces of lead on them, going undetected. Stores like Toys ‘R’ Us that sell toys sold by companies other than Mattel, should be required to post the percentage of how much lead is in each toy directly next to or near the toy so that parents can be aware of this problem. If parents are not made aware of this problem, it is going to cause more concerns health wise. Michelle Albert, a stay at home mom of two children states that “I feel our country should be more careful about the things we import” (Albert 1). She fears that her children may have been exposed to these toys and has no way of knowing until it may be too late.

Similarly, in the article, The Need for Vigilance: the Persistence of Lead Poisoning in Children published in Pediatrics, a peer-review journal, the authors write the article with the intent of reiterating the need for medical professionals to remain vigilant with the accurate treatment of lead poisoning. The article in Pediatrics is written by doctors for clinical professionals and is based upon a report of "a case of lead poisoning associated with ingestion of a toy necklace in a 4-year-old child" (Florin, T., Brent, R., &

So, they turned to making toys, and Mattel became the world’s largest toy company, with a revenue of $5.8 billion and a net income of $684 million in 2010.

Since the beginning of time, toys have often been an indicator of the way a society behaves, and how they interact with their children. For example, in ancient Greece, artifacts recovered there testify that children were simply not given toys to play with as in the modern world. The cruel ritual of leaving a sick child on a hillside for dead, seems to indicate a lack of attention to the young (Lord 16). The same is true of today’s society. As you can see with the number of toy stores in our society, we find toys of great value to our lives and enjoy giving them to children as gifts. Ask just about any young girl what she wants for Christmas and you’ll undoubtedly get the same answer: “A Barbie.” But what exactly has caused

There are different ways how Toys “R” Us can reach profitability by obtaining customers year-round. The company should appeal to its established historic customer base that will respond to its stores because of their loyalty to the company. The company can do this by opening new product lines. They can focus on obtaining products that are high in demand by their competitors. They can use their already established company popularity to obtain strong supplier relationships for the additional products. These will supply the company with an additional source of income and the

In 2007, the international toy manufacturer, Mattel, Inc. issued several recalls for millions of their products. These recalls were for safety reasons in that testing at the manufacturing sites and special test laboratories showed that millions of their toys were coated with dangerous amounts of lead in the paint. This lead based paint contains a potent neurotoxin that if ingested can cause serious harm to children. Mattel assured the public that the problem would be solved, the recalled products would be collected and replaced, and that the company would never let this type of incident happen again.

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.

Both Nasdaq director independence standards and Corporate Governance Guidelines of Mattel have strict requirements or rules to evaluate and determine whether these directors on the board are independent members in Mattel. In terms of the Nasdaq director independence rules, independent or outside directors are not allowed to participate in any material and pecuniary management activities and transactions as managers or employees. In addition, executive officers and employees who work in a listed company are not able to qualify independent directors, and members who have intimate relationships with other directors or executive officers also cannot be outside directors. However, the Corporate Governance Guidelines determine that members who take part in the Audit Committee, the Compensation Committee, the Executive Committee, the Finance Committee, and the Governance and Social Responsibility Committee are independent with material transactions and executive managements. As a result, there are ten directors on the board in Mattel, and only Christopher A. Sinclair, the CEO of Mattel, is not independent with the exercise of independent judgement and has no evidence to satisfy requirements of Nasdaq’s and Mattel’s director independence standards. In the other words, there are nine outside directors (90%) and one inside director (10%).

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

In 2111, Prof. Sethi and colleagues disclosed that Mattel Inc. had played a part in, what many would consider, unacceptable business practices (p. 483). Although Mattel took actions to investigate the level to which practices were truly occurring, they had also promised to remediate all noted unacceptable practices. One of the unacceptable business practices that was uncovered was the mandating of certain employee groups required to live in company dormitories and were not permitted to utilize any other options for housing. Was this practice a form of discrimination? In order to decide if the business practice and any alternatives are fair and ethical for all, resulting in the greatest amount of good for the greatest number of people, the scenario will be run through the EthicsOps.com’s Utility Test.

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