Mattel's Product Safety

Mattel was believed to be one of the most trusted toy companies around the world that operated in 155 countries. They produce the most famous toys for children, such as Barbie, Cabbage patch kids, Fisher-Price, and some many other amazing toys. Beyond concerns about marketing to children, Mattel, Inc. is making a serious commitment to business ethics. For example, Mattel instituted a code of conduct called "Global Manufacturing Principles." These principles required all business partners to commit to ethical standards that relate to safety, wages, and adherence to local laws [Mattel.com]. However, recently Mattel was involved in a product quality and safety dispute. Since August 1, 2007, Mattel has recalled in 30 million toys because of its quality and safety defects. Mattel lost not only their profits but also trust, an important role in corporate social responsibility (CSR).To achieve it, businesses are responsible for their production causes and consequences and accompany with their ethical operations and health and safety use (Ciulla, Martin, & Solomon, 2007). Mattel's product safety issue undermines the corporate social responsibility issue in three perspectives: quality control, not acting beyond complaints, and disclosure of information. Thus, Mattel is able to regain its CSR through the changes and effort from these three perspectives.

Quality Control

In the case of Mattel, the company and its Chinese subcontractors should simultaneously and corporately exam the product quality. However, people know that toys with extra lead and non-standardized magnetic batteries are under the brand name of Mattel, not the small Chinese contractors. Therefore, Mattel ought to know that they have the social responsibility to inspect the quality; otherwise, their corporate image will be damaged. Moreover, the smart ones should know trust from consumers is extremely important in this highly competitive and unpredictable market (Datamonitor, 2007). Mattel's CSR is negatively influenced by failing to inspect the quality of import, especially for Mattel's vulnerable consumers in which mostly are babies and small children.

Other companies should learn the lesson from Mattel's scandal, which the case cost Mattel $30 million to recall the defected products because of its failure to conduct a quality control audit on the production process on one of its suppliers. Outsourcing companies like Mattel needs to write into contracts to specify product quality, service expectations and the right to conduct audits on product safety. However, companies need to realize that conducting a quality control process is not due to legal compliance, it must go beyond compliance.

Beyond Compliance

As it has been discussed above, corporations that are outsourcing cannot as well "outsource" their social responsibilities. The Mattel case is a clear example in which the corporation was found liable for not assuring their product meeting the safety standards. However, it is revealed on Mattel's website that Mattel is conducting a strict policy to request all of its business partners to ensure the compliance with Mattel's Global Manufacturing Principles. The principles cover several areas of concern and practices such as product safety and quality, environment, customs, evaluation and monitoring, and compliance. In addition, Mattel has the full access for on-site inspections and any records that will enable the company to determine the compliance with principles (Mattel.com). Thus, the problem shifts to whether Mattel had effectively implemented those polices.

According to a survey conducted among the Fortune 500 companies, 96 percent of the business leaders agree that social responsibility policies are important to the future of United States, however, 40 percent of the corporations are having no plan to implement those polices (Sebor, 2006). Sebor (2006) mentioned that many corporations are implementing social responsibility policies under the social pressure and in the effort of building public relations rather than a true change from the fundamental. Some corporations are using the business ethic polices as a mere marketing tool that aiming to increase public reputation. In the lead paint case, it is possible that Mattel could be one of the corporations that are having sophisticated written polices but not putting enough effort to implement them.

Companies that perceive CSR in terms of compliance to the legislations will typically compete in commodity markets from a cost basis in which they can hardly build a sustained competitive advantage from having the CSR policies. Only the companies that perceive CSR in a strategic way will have more sound options to develop strategies and create competitive advantages (Munilla and Miles, 2005). In other words, companies will not benefit from having socially responsible policies if (1) the policies were made for the compliance to the legislations; (2) the policies were made because their business competitors have made similar policies or due to social pressure. Whereas companies that value CSR as the intrinsic good will act proactively beyond the compliance to the law and putting effort into implementing the policies for the social good. Companies with a proactive attitude to CSR will develop distinctive competencies that lead to superior and sustainable performance (Munilla and Miles, 2005).

From Mattel's S.W.O.T. analysis, done by Datamonitor (2007), a leading business information company specializing in industry analysis, Mattel is in a highly competitive global toy market. A large portion of its product portfolio is targeting infants and preschools such as the Disney products, Fisher-Price Baby Gear, Fisher-Price Infant Toys and Sesame Street, among others. Since the majority of Mattel's customers are infants and preschoolers, it is no doubt that Mattel should have strict product safety policies to guarantee children's health and safety and ease parents' concerns. It would put Mattel in a disadvantage position if Mattel does not have such product safety policies. Therefore, strict product safety policies will not be a competitive advantage for Mattel, because it is a general market expectation. Mattel will only be able to create sustained competitive advantage through the commitment to high standards of product safety with effective implementation and use the product safety policies as a bottom line to work beyond the compliance to legislations or market standards.

Disclosure

To better achieve CSR, Mattel should welcome and employ other trusted auditing company to inspect toys manufacture and its toys in Mattel' parent and subsidiaries (mention this in the contract with subs and negotiate whichever