Mattel's Commitment to Ethics
Legal and Ethical Business Practices
As demonstrated by the previous examples, Mattel’s principles are intended to create and encourage responsible manufacturing business practices around the world, not to serve as a guideline for punishment. Moreover, Mattel expects all of its business partners to meet these principles on an ongoing basis. At the same time, current partners can expect the company to work with them to effect change if certain aspects of the principles are not being met. Future business partners will not be engaged unless they meet all of Mattel’s manufacturing principles. If the company determines that any one of its manufacturing facilities or any vendor has violated these principles, they can either terminate their business relationship or require the facility to implement a corrective action plan. If corrective action is advised but not taken, Mattel will immediately terminate current production and suspend placement of future orders. Thus, a key challenge for Mattel is the certification of business partners and potential partners with respect to the manufacturing principles.
Another issue for Mattel’s products and marketing activities relates to its on-line marketing efforts. Since the company relies heavily on communication with children to market it products, any legislation in this area must be carefully monitored. For example, the United States Federal Trade Commission is developing new rules as a result of the Children’s Online Privacy Protection Act of 1998. These rules require Web-based marketers to get parental permission before collecting any personally identifiable information (e.g., name, address, email address) from children. Further, since its Web sites are accessible to children around the world, Mattel must be cognizant of regulation in other parts of the world.
Since Mattel is actively engaged in business around the world, the company must be sensitive to economic downturn in other parts of the world. For example, in 1998, there was increasing concern about the stability of major markets, including Asia and Latin America. Shifts in the economic viability of markets can create pressure on sales targets, business relationships, and the establishment of new business ventures. For example, Mattel relies on overseas manufacturers to uphold key ethical principles, regardless of economic stability. As economic pressures increase, normal business procedures may be changed, resulting in unethical and sometimes illegal practices. In attempts to "cut corners" and meet financial goals, managers and employees may purposely or inadvertently ignore the high ground established by regulations and agreements on ethical standards.
Overall, Mattel is very committed to both business success and ethical standards, but recognizes that this commitment is part of a continuous improvement process. The company’s position is very clear in this statement: (At Mattel, Inc.,) "management is concerned not only with the safety and quality of the products manufactured, but with the safety and fair treatment of the men and women who manufacture these products as well" (Global Manufacturing Principles, 1998, p.1).
*This case was prepared by Marisol Paradoa and Debbie Thorne LeClair, for classroom discussion rather than to illustrate either effective or ineffective handling of an administrative situation. (References)