Mattel Toy Recalls

Case facts :

 In August and September 2007, Mattel made a series of product recalls, totalling more
than 20 million toys.
 More than 20 million toys were to be recalled by Mattel, worldwide, making this the
largest recall in the history of Mattel, the world’s largest toy manufacturer.
 The recalls sparked intense criticism of Mattel and its Chinese supply chain, despite
the fact that more than 85 percent of the recalled toys were due to design problems
(magnets), not the result of improper manufacturing (use of lead paint).
 In 2007 it was discovered that substantial numbers of Mattel branded toys had been
contaminated with lead paint.
 This followed hard on the heels of a much larger recall of toys containing small
magnets when it was discovered that a serious health hazard was posed to children if
they became loose.
 The cause of this crisis was twofold: the use of non-approved paint by contract
manufacturers in China and what turned out to be a design fault in toys containing
small magnetic parts.
 The Chairman and CEO of Mattel, Robert Eckert, assured a US Senate
Appropriations Subcommittee that the problem was not necessarily connected to the
toys in question being manufactured in China, but to the subcontractors not being
monitored.
 On the 11th September 2007, in response to public concern and pressure regarding the
recall of toys made in China, a joint statement was issued by the U.S. Consumer
Product Safety Commission and the General Administration of Quality Supervision,
Inspection and Quarantine of the People’s Republic of China titled ‘Enhancing
Consumer Product Safety’.
 This statement affirmed the desire of both parties to protect consumers in both
countries from unreasonable risks of serious injuries or deaths arising from products
originating within their respective jurisdictions.

Q1 Identify the major stakeholders in this case and the ethical issues that affected them
adversely. ( 15 marks)

 Focal Stakeholder the company - Fisher-Price and its parent company, Mattel.
 Primary Stakeholder: Owner, customers, employees and suppliers
 Other primary stakeholders include: Consumers (Especially the young children and
their parents), The Chinese manufacturers and the employees.
 Secondary Stakeholders include: The Government. Consumer Product Safety
Commission

The major stakeholders in the case are consumers, US toy manufacturers, Hasbro and Mattel,
Chinese toy manufacturers and Chinese toy testing laboratories. It appears, from the case
study that the responsibility of the lead paint recall would be the Chinese manufacturing
plants and that Mattel’s flawed toy designs were responsible for the Polly Pocket-magnet
recall. However, full responsibility belongs to Mattel for its lax quality standards. There
should have been stringent quality control measures in place to monitor the outsourced
products as well as strictly enforced supply chain processes and procedures to prevent these
defects.

Consumers: Parents and Children

Toy companies,., need to recognize that “children have the right to be safe from injury when
they play with toys [and parents] have the first duty to assure their safety,

Consumer manufacturers

At the time of recall Chinese manufacturers who produced toys for the company were
affected since the major business was to produce toys for Matel. when the production stopped
the employees in that company and manufacturers were in trouble even executive from China
manufacturing factory committed suicide

Suppliers

since Matel was one of the major producers of the toy & used to buy raw materials from
various players at the time of recall the company stopped the production & suppliers who are
dependent on the firm were affected

Shareholders

The shareholders are the people who get affected when company goes under crisis in this
case many of the toys produced neither defects or were recalled & the company was not able
to sell its products & didn't make enough profits and hence shares were decreased

Toy Company and Partners

No company ever wants to experience a product recall, “especially those involving adverse
media publicity and a negative effect on stock price for publicly held companies...[it can
create] permanent damage to the product brand, [reduce] profits, and [lower the] reputation
and goodwill with consumers” (Kumar and Schmitz 235).

Consumer Product Safety Commission

The Organization was supposed to look into matters like this but did not do it effectively and
when questioned, they defended saying there were not enough staffs in the Department

Employees

When most of the toys produced were recalled it affected the firm's operation & the company
laid off some of the workers

Ethical issues
  With so many manufacturing facilities located in so many different countries and
such a large network of contractors and licensees, Mattel has set itself a formidable
task in ensuring compliance to its Global Manufacturing Principles and adherence to
every national and regional toy product standard around the world.
 When the company received the complaint about defective toys instead of informing
consumer products Safety Commission the firm kept the information private &
defended itself saying that the regulatory requirements were unreasonable
 company was fined once for doing this but it did not change the Companies attitude
towards addressing the problems even when company knew that defect in the power
wheel the company did nothing about it the company continued to produce the
product
 every business aims for high profit but in this process it must not affect shareholders
involved
 The company did not have quality Department where final goods are checked before
releasing in the market only after issue took place the company said they will set up a
quality check Department in the organization

Q2. What kind of issues management framework would you suggest to best explain this case
and why? ( 15 marks)

Six-Step Issues Management Process: is framework used by organizations to prevent a

crisis. The framework can also be used in analysing the issues that have already occurred,
Once the public was made aware of the recalls, Mattel would be able to use this framework to
determine strategies to use under different circumstances.

6 Step Issue Management Process

• Approach to proactively mapping, strategizing, and responding to issues.

• Informs on the precautions to be taken.
• Avoid illegal and unethical consequences of issue.
• strategy used was - Major recalls implemented to resolve the current issue.

Organisation must recognize possible or potential risks before managing

them. This part of the whole process is more about What/Which. What risks
you are sure to face and which you might have to tackle.

Once all the possible risks recognized and listed down, analytical skills and
possibly some sound advice from team members to really diagnose your
list. 

Having listed and analyzed list of risks, organisation must have a clearer
idea at this point that not all of the risks are worth your time, effort and
money. However, some of them would be more critical and,
consequentially, would need more concentration.
The organisation should be able to foresee any changes or further arising
risks and be able to keep a straight head to resolve them.

now utilize all of the previously done planning and apply it!

The organisation should evaluate the effectiveness of plans and monitor the
entire progression. This would help identify any deficits or changes need to
make in plans. 

Learnings :

 Mattel dealt with the toy recall crisis precisely the way Coombs recommends
companies to deal with image damaging crises.

 Mattel’s experience with recalls ensured precise and smooth execution of their well
documented crisis management plan.

 The company and CEO were visible, available, and publicly apologetic.

 And more importantly, Mattel told the truth and took immediate action to fix the
problem allowing the company to focus on a positive solution and restoring the
company’s dependable reputation.

 It is often difficult to know exactly where and how consumer products are
manufactured and how products are inspected in today’s ever-changing global
economy.

 The toy recall crisis also allowed us to realize that we are also facing an economic
crisis with global manufacturing.

 “It would be far too easy to attribute this summer’s recalls to China’s poorly regulated
export manufacturers. Regulatory deficiencies, shoddy business practices.

 Mattel took responsibility for the entire recall, which not many companies are willing
to be held accountable for

 Owning up takes courage and actions in good times and bad should express the
company’s character

 Mattel should continue to identify possible problems, enforce strict manufacturing

regulations to produce safe toys, reassure consumers that child safety and product
safety is the bottom line, and collaborate with international suppliers and government
agencies to ensure public well-being