By now, you should be very familiar with the Mattel case. In the Module 4 SLP, we will evaluate the Mattel case study in the context of Corporate Social Responsibility. Specifically, socially responsible organizations behave in certain ethical ways. Socially responsible organizations tend to go above and beyond the rules, mores, and expectations that have been established (and that are expected to be adhered to) by the general public, company employees, end customers, buyers and suppliers, and the government, for example. We will investigate the ways in which Mattel’s behaviors and actions contravened the tenets of “socially responsible” behavior.
Read the following excerpt related to CSR. As you read, consider the benefits realized by socially responsible organizations, and how the leadership at Mattel operated counter to CSR tenets:
Corporate social responsibility. (2013). International Institute for Sustainable Development. Retrieved from https://www.iisd.org/business/issues/sr.aspxAssignment
In a well-written, 2- to 3-page paper, discuss how the Mattel case informs our understanding of what it means for companies to be “socially responsible.”
Keys to the Assignment
1. In the context of CSR, in what ways did Mattel demonstrate – not social responsibility – but social irresponsibility? Consider how the company’s actions may have run counter to the tenets of CSR through its neglect of duty to the company’s shareholders, its employees, and even the larger public trust. Be sure to cite specific examples.
2. What have been the long-term consequences of Mattel’s actions, and how did the company’s implosion change our view of what it means for a company to be “socially responsible”?
3. Be sure that you use at least two references from the library, and that you properly cite your sources.
4. Follow the guidelines in The Student Guide to Writing a High Quality Academic Paper
5. You are expected to demonstrate evidence of critical thinking – as defined in the Module 2 background materials and the grading rubric
Corporate Social Responsibility is the name given to business initiatives that are aimed at benefitting the society. (Crowther & Aras, 2008) CSR activities cover a broad range of areas and companies can choose the various ways that they can engage in helping the society. Many forward-oriented businesses are keen to make sure that they implement CSR into their business strategy because it is the right thing to do. The company should assess and take responsibility for the effects of the company on the environment and social well-being of the people. CSR involves going beyond what is expected by regulators to influence the society in a positive way. CSR involves integrating self-regulation into the business model where a company monitors and ensure that they comply with the spirit of ethical standards. (Crowther & Aras, 2008)
Mattel displayed social irresponsibility when they failed to provide high-quality products for their consumer market. The moral duty of top management at the company is to ensure that the goods that reach the market meet all the safety specifications. Chinese companies made toys that were coated with a lead-based paint that was hazardous to the kids. That notwithstanding, the company also produced toys that had small dangerous magnets that could be ingested by the children. (Hurley, 2012) The two errors in production lead the company to recall millions of units as they fought to contain the mess and uphold a good image in the eyes of the public. The public was concerned since Mattel is the world’s largest toy manufacturer and yet they had allowed such a catastrophic mistake to occur under their watch.
Apart from the public, the recall also affected the shareholders since the company has a responsibility of making money for the investors. At the time that the recalls were happening, the company was losing a lot of money to the tune of one million dollars per day. We can safely then say that the firm was socially irresponsible in their duty towards the investors.
Outsourcing of labour to emerging economies like China was aimed at improving the profit margins due to the lower cost of production in these countries brought about by cheap labour. According to the ICCA, workers at the factories were getting unfair treatment in contradiction of the laws. (Sethi, Veral, Shapiro, & Emelianova, 2010)The investigation uncovered evidence that suggested workers were getting overworked with some factories forcing them to work overtime. Overtime hours are a voluntary affair according to the company rules and the Chinese labour laws. (Sethi, Veral, Shapiro, & Emelianova, 2010) The investigation also uncovered the poor safety measures in which the workers operated and the labourers had very few avenues of seeking recourse. The company management failed in their duty of ensuring that the employees are treated fairly and in a humane manner.
The issues at Mattel have shown how companies can allow poor ethical practices to creep into their activities. Businesses today must ensure that they adhere to the roles that they play in ensuring all stakeholders benefit from the company operations. Mattel had to recall many items, and they conducted extensive investigations and even severed ties with some big Chinese manufacturers like Lee Der. (Hurley, 2012) The implosion has taught us that it is critical that companies conduct routine monitoring especially now with the outsourcing of labour. Parent companies must ensure that sub-contractors adhere to the policies and standards of the enterprise by providing valuable oversight. A socially responsible company is one that ensures that their duty to every stakeholder is fulfilled adequately.
Crowther, D. & Aras, G. (2008). Corporate social responsibility (1st ed.). [Frederiksberg, Denmark]: BookBoon.
Hurley, R. (2012). How Mattel regained trust. Ft.com. Retrieved 4 March 2017, from https://www.ft.com/content/61baac6e-2a84-11e1-9bdb-00144feabdc0
Mattel’s Unceasing Abuse of Chinese Workers: An investigation of six Mattel supplier factories. (2017). Chinalaborwatch.org. Retrieved 4 March 2017, from http://www.chinalaborwatch.org/report/70
Sethi, S., Veral, E., Shapiro, H., & Emelianova, O. (2010). 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. http://dx.doi.org/10.1007/s10551-010-0673-0