Mattel is a Multinational Company (MNC)
and world leader in the toy manufacturing industry (Sethi et al, 2011). The company
once led a global initiative to address unfair wages, hazardous working
conditions, and environmental pollution, with an international code of ethics (Sethi
et al, 2011). Mattel follows local regulations, but the regulatory standards in
China where their largest foreign plant is located, are subpar when compared to
US environmental, safety, and workers standards (DiMaggio, and Powell,
1991). The quality contrast between countries
created an ethical dilemma, and a regulatory nightmare for them.
Cultural and
Regulatory Challenges
For more than
twenty years, researchers highlighted Mattel in view of global ethics (Sethi et al, 2011). The
corporation doubled its outputs in China where alarming trends of mistreated workers allegations, contamination
of the ground, air, and fresh water supply speculations are frequent (Sethi et
al, 2011). Managers for Mattel have responded aggressively to cultural
challenges, and government regulations, within the ramifications of their
control. (DiMaggio, Powell, 1991).
Through self-restraints, companies such as Mattel are forced to practice
unmonitored discipline, when regulation is weak or non-existent (Gilbert, & Wisner, 2010)..
Regulation Challenge
Currently MNC’s operations are
unethical in countries where social, economic, and real estate infrastructures
are fragile (Khan, Lew, & Park,
2015). Empirical evidence suggest that the company has the role of business,
and not as a government to developing country (Aguilera, & Jackson, 2003). Mattel
faced a serious regulation dilemma, in connection to its China production plant,
from U.S. officials (Sethi et al, 2011). Some, of the toys produced in China,
were contaminated with high levels of lead, forcing the company to recall 14
million toys, over a 19 month time-span (Gilbert,
& Wisner, 2010).
Cultural Challenge
China’s production standards, created an
ethical problem for the company managers (Roloff, & Aβländer, 2010). To
combat a negative image, Mattel issued a voluntarily code of ethics (Sethi et
al, 2011). The global code of ethics was named Global Manufacturing
Principles, (GMP) and lasted just nine years (Sethi et al, 2011). Mattel over-exaggerated its response for the lead contamination issue in toys. Whereas,
the general concerns for safety is beyond the power of any single corporation,
or a collection of corporations for that manner of thinking (Khan, Lew, & Park, 2015).
Publish Policy
The published code of ethics, created
conflict within the industrial culture. Corporate manufacturing managers,
subsidiary operations management teams, shareholders, government officials,
public figures, and the market members did not agree collectively with its
statues (Sethi et al, 2011). In theory, the idea was appealing, and appeared to
be a solution for the complex global ethics issue. However, the research did
not support the true complexity of the concept.
Corporate transparency, generated synergy
between management, and market in the initial phase of the GMP (Sethi et al,
2011). Mattel Company attempted to rollout the successful program model to its
vendor plants, and encountered some unsurmountable issues (Sethi et al, 2011). The secondary plants, did not have the tools,
and resources in place to repeat the success of the corporate primary plant
(Sethi et al, 2011). Shareholders, became worried that the code of ethics would
interfere with traditional performance earnings (Sethi et al, 2011).
Government & Public figures,
argued the code ethics, lacked eternal regulatory authority, presented bias
rules, and presented limited uncensored disclosure of findings (Sethi et al,
2011). After nine years the company dropped their global code of ethics program
(Sethi et al, 2011). The valor effort of Mattel perhaps served as a standard in
many ways. Other, MNC’s have launched similar campaigns, as a benevolent
gesture, and to resist negative media (Melé, Debeljuh, & Arruda, 2006).
References
Sethi, S. P., Veral, E. A., Shapiro,
H. 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.
Gilbert,
J., & Wisner, J. (2010). Mattel, lead paint, and magnets: Ethics and supply
chain management. Ethics & Behavior, 20(1), 33-46.
Melé, D., Debeljuh, P., & Arruda,
M. C. (2006). Corporate ethical policies in large corporations in argentina,
brazil and spain. Journal of Business Ethics, 63(1), 21-38.
Roloff, J., & Aβländer, M. S.
(2010). Corporate autonomy and Buyer—Supplier relationships: The case of unsafe
mattel toys. Journal of Business Ethics, 97(4), 517-534.
Khan, Z., Lew, Y. K., & Park, B. I. (2015).
Institutional legitimacy and norms-based CSR marketing practices: Insights from
MNCs operating in a developing economy. International Marketing Review, 32(5),
463-491.
Aguilera, R.V. and Jackson, G. (2003), “The cross-national diversity of corporate governance:
dimensions and determinants”, Academy of Management Review , 28(3),
pp. 447-465.
DiMaggio, P.J. and Powell, W.W. (1991), “Introduction”, in Powell,
W.W. and DiMaggio, P.J. (Eds), The
New Institutionalism in Organizational Analysis , University of Chicago Press, Chicago, pp. 1-38.
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