Jonathan Guzman, Raji Kaleh, Amy Lee, Riane Sanchez
Business & Society
Final Draft
October 21, 2014
Case Study 5: Mattel & Consumer Protection
In 2007, Mattel, a global leader in the design, manufacture, and marketing of toys, issued a voluntary recall of 1.5 million Chinese-made toys. A majority of as a result of such carelessness, children’s health and safety were at great risk due to poor toy design, such as loose magnets, and substituting lead free paint for a fatal amount of lead paint on Mattel’s toys to cut corners and save money.
As consumers we are naive to believe that boards of directors and higher management in manufacturing companies are highly concerned with our safety. In reality, Mattel has a serious lack of crisis management as well as failing to meet proper safety procedures violating consumers right to safety. As a result millions of children are in harm’s way and are susceptible to life-altering health risks. Having a lack of regulation on imported toys has resulted in high levels of lead paint and loose magnets. Government regulation or a lack of government regulation has also caused many companies aside from Mattel to cut corners and look more at the bottom line as opposed to the safety of consumers.
According to Lawrence and Weber, stakeholder theory “argues that corporations serve a broad public purpose; to create value for society”. It can be assumed Mattel was acting unethically with regards to producing unsafe products for their consumers; as a result, devaluing our society in terms of safety. Within the Mattel case the primary stakeholders, individuals who directly benefit from the corporations activity, are the parents and their children. As primary stakeholders they were affected by Mattel’s lack of management and poor product design. Secondary stakeholders, toy retail stores, argued that they were not liable for Mattel’s lack of action.
There are different solutions to the issues concerning Mattel’s toy recalls and stakeholder concerns. To prevent further safety hazards, Mattel can increase funds for proficient manufactures in the future. Another step Mattel can take to ensure safety would to make sure suppliers, distributors, and manufacturers are responsible for testing and bringing unsafe products in the market for inspection to ensure the safety of products. Consumers, although unaware of safety hazards going on in the world, can play their part in what they buy by researching various aspects of imported goods such as where goods are manufactured and what materials are used in the process.
In an investigation, Mattel was informed that some of their external vendors were cutting corners to save money; the business has the economic responsibility to guarantee their stakeholders that they will put forth extra money to use unleaded paint for future production. The legal responsibilities are requiring all toys manufactured for the U.S. market to be tested to U.S. standards; this will interest stakeholders of the company, as they would feel a sense of trust once again. Ethical responsibilities that may interest stakeholders include holding suppliers, distributors, as well as manufactures accountable for bringing unsafe products to the market by requiring inspections and testing to ensure product safety. Lastly, permitting a mandatory recall authority for all government agencies is a social responsibility that could benefit society as a whole.
We recommend requiring all toys manufactured for U.S. market to be tested to U.S. standards is a great solution to the problems Mattel faced; it provides the most positive upside for the health of consumers as well. An advantage of this solution is the knowledge that all products are produced under similar standards throughout the country, no matter where they originated. This ensures businesses that their products all fall under the same restrictions, which limits any further issues and recalls from occurring. However, disadvantages are apparent to the solution as well. Requiring all toys manufactured for the U.S. market to be tested to U.S. standards may insult countries such as China, who manufacture their products. They might not want to comply with U.S. standards, which can affect present and future business partnerships.
Aside from the manufacturing companies and the government being responsible for the harm of consumers. Primary stakeholders, the parents and their children, have a responsibility to themselves to be conscious of what they are purchasing. Through the analysis of a company one can determine their beliefs, manufacturing practices, as well as the materials used to produce each product. Being unaware of necessary knowledge enables many corporations to cut corners and not follow regulations. Empowering ourselves as consumers we are making manufacturers liable for their actions increasing the likelihood of safer and better products.
Safety and crisis management are areas in which Mattel seemed to struggle during this time. With the many possible solutions to these problems, Mattel as well as consumers would have benefited from taking safety measures. After analyzing potential solutions, Mattel can fix the problem of safety by implementing a system in which all products manufactured outside of the country to be tested to US standards. By testing for problems on products before they hit the market, Mattel would have been able to dodge the recall that hurt the way consumers perceived them.
On the other hand, stakeholders such as consumers also were responsible in not being aware on what they were buying. As parents, people are responsible to take care of their children, which in this case means knowing what exactly is in the product they are supplying. A simple solution to this would be to do research on a company and make sure they are not cutting corners in order to make hazardous products.
Both Mattel and the consumers could be said to be at fault in this situation, but in the end there is always room for improvement. On one side, Mattel can improve their safety procedures by regulating and inspecting their products with more authority. The safety of consumers should be the number one priority, which is why it is essential to keep them safe from their product. On the other side, parents should not be afraid to take extra precautions with any product that is bought on the market.
In conclusion we have examined possible solutions regarding consumer protection, government regulations, and safety procedures for production. Consumers should empower themselves and become aware of how manufacturers are making products they are purchasing; with proper knowledge they can hold Mattel liable and prevent potential hazardous situations. Revising government regulations will allow toys to be safer to use, after everything has been shipped to retail distributors. Mattel should initiate a better safety policy to review, and investigate (if needed) their products to deem them harmless to their consumers, further distancing themselves from potential crises. Efficiently performing these three tasks is essential to protecting and creating value for society.

Works Cited
Lawrence, Anne, and James Weber. "Mattel and Toy Safety." Business and Society: Stakeholders, Ethics, Public Policy. Fourteenth ed. New York: McGraw-Hill Companies, 2014. 531-540. Print.