Globalization ethical dilemma review of Mattel toy recall

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.