Ethical Leadership in the Mattel Company

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Introduction

“Leadership” at Mattel, is understood as “the ability to develop and communicate a compelling picture of the future that inspires and motivates others to take action” (Mattel 2010). The same official website of the company suggests that the leaders who direct and control Mattel “align themselves with Mattel’s core values, exhibit leadership competencies and drive for success in [their] business strategies” (Mattel 2010).

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Since the leadership team of the company is headed by Mr. Robert Eckert, the implementation of his leadership should be considered first of all when analyzing the ethical issues and conflicts that have become a part of the history of Mantel.

Evidently, the organizational culture of any company plays a major role in its successful existence since it can be rightfully compared with “a personality” of a company and the “actions of top management also have a major impact on an organizational culture” of the company (Robbins 2005, pp. 229, 234). Since Mattel has been recognized as the company that realizes potential ethical issues and is taking “steps to strengthen its commitment to business ethics” (Ferrell, Fraedrich, & Ferrell 2009, p. 356), the present paper will be devoted to the identification of the possible recommendations that could have been administered by Robert Eckert during Mattel’s recalls of 2007.

Summary of the case

On August 2, 2007, the Today show reported the news that “a ‘global recall’ from Fisher-Price involving approximately one million toys” was performed (Weiss 2008, p. 79). On the whole, Mattel, the leader, the biggest and the most successful producer of toys in the world, “recalled 21,334,000 articles” of toys during a series of three recalls that took place during one year (Magno 2008, p. 8).

The reasons for the considerable recalls of products were that the toys manufactured on the facilities based in China were dangerous for children’s health due to the lead paint discovered in the toys and the second reason for the recalls was “a design flow” of a number of magnetic toys that were threatening for children’s case due to the possibility of coming “apart from the toy with the risk of being swallowed by children” (Weiss 2008, p. 80). Besides, there were some cases reported (Weiss 2008).

Though the recalls were conducted and the issue was given publicity since “Mantel ensured consumers were aware of the recalls by placing ads in major newspapers and posting notices on popular web browsers” (Warner 2008, p. 32), it took the company considerable time to gather the data pertaining to the recalls and to notify the agency (Weiss 2008, p. 80).

Ethical issues and dilemmas faced by Mantel as represented by its CEO, Robert Eckert

On the whole, the specificity of Mattel’s production can be considered a factor that inspires the arousal of numerous ethical issues (Ferrel, Fradrich, & Ferrel 2009). The basic issues identified by Ferrel, Fradrich, & Ferrel (2009) include the concerns relating to the children’s rights, since children for the unquestionable majority of the target market of the company. The same authors also mention the international environment as the factor complicating business transactions that lead to the arousal of conflicts based on ethical grounds (Ferrel, Fradrich, & Ferrel 2009).

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Considering the key ethical dilemmas characteristic of the analyzed case, it is necessary to mention that “some crisis experts chastise Mattel for having to issue a recall at all” (Warner 2008, p. 30). Thus, one of the ethical issues is the series of recalls themselves. On the one hand, the recalls were sure to become the decisive factors that could threaten not only the financial stability of the company but also its reputation in the eyes of consumers and the business world on the whole. However, on the other hand, Eckert stated in his testimony that “nothing is more important than the safety of our children” (Testimony of Robert A. Eckert 2007, p. 1). This is why the dilemma was solved for the entire benefit of the consumers and the events were given publicity.

However, though the deplorable fact of recalls provoked by the poor quality of the products was given publicity, this activity was retarded and it took Eckert a month and a half before the truth was exposed. Evidently deliberate delay of the exposal is one more ethical issue as, on the one hand, the consumers were exposed to the use of products harmful to their health while on the other hand, the CEO justifies his actions saying that “the company discloses problems on its own timetable due to a belief that the regulatory requirements are ‘unreasonable’” (Weiss 2008, p. 81).

Also, it is possible to define one more ethical dilemma that the CEO of Mattel encountered in the course of the series of recalls. The blame was shifted to the Chinese manufacturers of the toys. However, if the blame of the Chinese manufacturers seemed evident in the case of the lead paint usage, it could be questioned as far as the accusation of the improper design of magnetic toys is concerned. In fact, the Chinese government stated that “85% of the recalled products were faulty because of mistakes in their design, which was directly performed by Mattel” (Magno 2008, p. 8). Thus, it seems that though the guilt of the Chinese manufacturers was present, the accusation was unfair to a certain extent.

It is known that Eckert made an appeal to the Chinese contract manufacturers, stating the following: “I, like you, am deeply disappointed by recent events. We were let down, and so we let you down” and the decision was made to distance Mattel from the contract manufacturers (Weiss 2008, p. 81). However, it is known that this ethical dilemma was solved by public excusal and Mattel’s taking “full responsibility for these recalls” and the apology was given to “Chinese people, and all of our [Mattel’s] customers who received the toys” (Coombs & Holladay 2010, p. 480).

Ethical framework guiding the decisions

On the whole, Robert Eckert has been characterized as the man who “underpromised, over delivered, trimmed the fat by cutting jobs, and kept the product line basic” (Oppenheimer 2009, p. 193). Assessing the ethical framework that Eckert “adds to his armory” when reacting to the analyzed ethical issue, it can be defined as consequentialism or its particular form, utilitarianism, an ethical theory that pays great attention to the consequences of the events, aftermath and the reaction to them. Eckert seeks the greatest good for the greater number of people, consumers in particular, choosing to reveal the data on recalls. He states: “You have to deal with those things. It’s not the unfortunate events that we want to be judged on. We want to be judged on how we address the issues” (Warner 2008, p. 32).

However, some traces of ethical egoism can be observed in Mattel’s case on the part of Eckert. Such is the accusation of the Chinese contract manufacturers of design defects of the products. However, the final decision of Mattel to assume the responsibility for the recalls demonstrates Eckert’s adherence to the framework of deontological ethics.

Considering the framework utilized by Eckert in his decision-making, it is possible to state that it CEO of Mattel resorted to the ethical decision-making framework that helped him to improve his decision in the crisis situation (Ferrell, Fraedrich, & Ferrell 2009).

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Actions are taken by Robert Eckert in response to the recalls

Though the reaction of Mattel’s CEO has been tackled in the above sections of the present report, it is possible to sum them up separately. Thus, the actions taken by Robert Eckert in response to the recalls are as follows: the positive ones include cooperation with the CPSC and the introduction of an innovative three-point safety check system. Besides, the leadership of Eckert prescribed by his position in the company inspired his public apology before the parents of children who belonged to the number of consumers that might be harmfully affected by the products of low quality.

However, there are also negative responses to the events of 2007, such as a considerable delay of the revelation of the truth both to the CPSC and the public. The shifting of the blame onto the Chinese manufacturers also seemed to be unethical behavior of Eckert though it was remedied by the apology addressed to the Chinese people.

Recommendations

As Global Citizenship Report of Mattel (2009) the quotation of the statement uttered by Eckert is given: “One thing remains constant: our [Mattel’s] commitment to creating safe, high quality and innovative toys in a responsible and ethical manner” (unpaged). In order to make this statement work and the company meet the requirements it sets for itself, it is necessary to ensure that the possibility of occurrence of similar problems is reduced.

Mantel should improve its policy and process of production in terms of certification of suppliers and materials they use to manufacture toys. It is necessary to introduce innovative tests and certified laboratories for their application.

As for the organizational culture of the company, it also needs improvement. Since Mattel has numerous manufacturing facilities in China, it is necessary to establish organizational culture and ties with these facilities and provide inspections and other measures of control of the facilities.

As for the leadership improvement, the executives of the company should take prompt actions in case of necessity and if time is needed “to evaluate any reports of safety hazards”, this process needs optimization so that the consumers could become aware of the situation in time (Weiss 2008, p. 81).

Reference List

Coombs, WT, & Holladay, SJ 2010, The Handbook on Crisis Communication. NY: John Wiley and Sons.

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Ferrell, OC, Fraedrich, J, & Ferrell, L 2009, Business Ethics: Ethical Decision Making and Cases. NY: Cengage Learning.

Magno, F, 2008, ‘Outsourcing production or moving away from the locus of ethical accountability? Some findings of product safety”, 8th Global Conference on Business and Economics, Italy, pp. 1-16.

Robbins, 2005, ‘Organizational Culture’.

Mattel, 2009, Global Citizenship Report. Web.

Mattel 2010, Mattel Leadership Team. Web.

Oppenheimer, J 2009, Toy Monster: The Big, Bad World of Mattel. NY: John Wiley and Sons.

Testimony of Robert A. Eckert Chairman and Chief Executive Officer, Mattel, Inc, 2007, Subcommittee on Commerce, Trade, and Consumer Protection of the Committee on Energy and Commerce, Washington, D.C. Web.

Warner, J 2008, ‘Mattel’s Blues’, Directorship, vol. 33, no. 6, pp. 30-34.

Weiss, JW 2008, Business Ethics: A Stakeholder and Issues Management Approach. NY: Cengage Learning.

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