BUSINESS ETHICS GOVERNANCE & SOCIAL RESPONSIBILITY

CASE STUDY REPORT-4

ON
The Mattel Toy Recall
Submitted By: Group3 (Section B)

Jahnavi (21080)
Jahnavi De (21081)
Jakkampudi Moulithya (21082)
Kavana K (21083)
Kelvin Francis (21084)
Kuntal Mandal (21085)
Kushagra (21086)
Mullapudi Teja (21087)
Suraj Maheswaram (21088)
Session 2021 – 2023

Submitted To:
Dr. Nilanjan Sengupta
Case Facts:
Mattel, Inc., the world's largest toy manufacturer, also known as "the world's foremost toy
company - now and tomorrow," designs, manufactures, markets, and distributes a diverse
range of play goods globally. Mattel's toys are made in factories owned by the company in
China, Indonesia, Malaysia, Mexico, and Thailand, as well as by independent contractors in
the United States, Europe, Mexico, the Far East, and Australia. The company's three largest
retail customers are Wal-Mart Stores, Inc., Toys 'R' Us, Inc., and Target.
In August and September of 2007, Mattel recalled 19 million toys for two distinct
reasons. This is the largest recall in the company's history because both recalls occurred at the
same time.
Faulty magnets were the cause of the first toy recall. The design of the toy magnets
included elements with high-energy magnets commonly used in industrial applications, which
easily came loose and posed a risk to young children and new-borns who might ingest the
magnets, which could then cling together in the digestive tract and burst the stomach tissue.
The second toy recall was prompted by the discovery of excessive amounts of lead-
based paint on the surface of several toys. Mattel had previously provided a list of eight
authorised paint suppliers to Chinese manufacturers, but subcontractors chose to use
unapproved sources to save money. Due to dangerous levels of lead paint, Mattel recalled 91
different types and brands of toys.
Case summary

 Mattel, the world's largest toy manufacturer, has been embroiled in a number of
issues involving its products.
 It is Fisher Price's parent company.
 On August 2, 2007, approximately one million Fisher-Price toys were recalled due to
the discovery of lead in the paint of the toys.
 The second recall was due to the discovery of lead paint and the recall of magnetic
toys that had a design flaw that allowed small magnets to come apart.
 The public became increasingly concerned about recalls, and Mattel could have
alerted the public much sooner.
 Mattel later stated that it would evaluate and address the issues, as well as improve
quality control oversight for its contract manufacturers.
Mattel is recalling nearly one million toys due to lead paint contamination. According to
Mattel, which owns the Barbie and Hot Wheels brands, all of the toys were created in
China by a contract manufacturer.
The recall affects 83 goods that were sold in the United States. Consumers are thought to
have purchased around 300,000 of the toys. According to reports, the issue arose after a
European store discovered lead on some Mattel toys.
The Elmo Tub Sub, the Dora the Explorer Backpack, and the Giggle Gabber, a toy
fashioned like Elmo or Cookie Monster that toddlers shake to hear giggles and noises, are
among the many that include Sesame Street and Nickelodeon characters.
Nickelodeon has announced the use of a third-party monitor to keep an eye on all of the
companies who produce toys under its names.
RC2, the company that makes Thomas the Tank Engine trains, recalled 1.5 million of
their products.
 1) Identify the major stakeholders in this case and the ethical issues that affected them
adversely?

The major stakeholders of the company are as follows-

1. Mattel's most essential stakeholders are the children whose health and safety have been
affected, as well as all its other worldwide customers.
2. Stakeholders included their supply chain partners, such as the Chinese toy manufacturers.
3. Other players included government agencies and the Consumer Product Safety Commission
(CPSC).
4. Mattel's owners and stockholders were also involved as stakeholders.
5. Mattel's quality, safety, and buying management.

Customers include both parents and children-

Toy companies, such as Mattel, Inc., must recognise that children have the right to be safe from
injury when they play with toys [and parents] have the primary obligation to ensure their safety, but
that most parents are not competent to determine the safety or risk of a toy created for their child.

At such a young age, a child's development level is still rising. As a result, individuals can learn from
their errors. Some errors can have significant consequences that the child or parents are fully
ignorant of, especially when the damage or death is caused by a purchased product whose design
and assembly are beyond their control. Mattel, Inc. is ultimately in charge of the products it creates.

Consumers of Mettal toys would be affected, to be specific, they would be terrified of what
happened. More importantly, when it comes to the safety and health of children, the corporation
must take the highest care, which it clearly did not. Customers, on the other hand, will always favour
businesses that never compromise on quality, especially when it comes to their children's safety.
When a firm is not ethically accountable for its activities, it is impossible for it to succeed. Rather, a
crucial tip might be that they might still increase their products' quality and then sell them with good
promotion and knowledge of the improved quality, but what happened was that the owner couldn't
take the failure or mishappening.

The Toy Company and its Partners-

No company wants to be involved in a product recall, especially when it involves unwelcome media
attention and a negative impact on the stock price of publicly traded corporations. It has the
potential to permanently hurt the product brand, (reduce) profitability, and (decrease) consumer
reputation and goodwill.

Product liability is the responsibility of many different people in a company, not only the production
facility or the original toy designer. Easy traceability and a well-established recall strategy are
essential to manage recall risk.

Regardless of the technique, executives must tighten their control and inspection procedures so that
product flaws are discovered in-house rather than brought to the company's attention by outsiders
after consumer damage incidents." The implications are enormous if the focus moves from
consumer safety to shareholder interests and profit.

Consumer Product Safety Commission-

Instead, then relying on independent labs to screen Mattel's products for lead paint and harmful
small parts, the Consumer Product Safety Commission has decided to allow the toy giant oversee
some of its own product testing. Mattel is the first company to use the Consumer Product Safety
Improvement Act's jurisdiction to certify so-called "firewalled laboratories," according to CPSC
spokesperson Scott Wolfson. And we're hoping that the crucial phrase here isn't taking advantage of.

Mattel does not have a good track record when it comes to recalls. Since 2007, the toymaker has
recalled 12.7 million toys due to potentially dangerous minor elements (mostly magnets) or lead
contamination. The company agreed to pay a $2.3 million civil penalty to the Consumer Product
Safety Commission in June for importing millions of lead-contaminated toys from China, the CPSC's
third-largest charge ever.

Suppliers, Manufacturers and Vendors-

The European market was the first region where Mattel toy sellers were involved in the distribution
of toys contaminated by the lead paint that caused the crisis. Because Chinese wholesalers were
heavily involved in this case, Mattel decided not to have the toys supplied through their channels,
even though they had been Mattel's vendors for the previous 15 years.

The main CEO of the manufacturing company related to the Mattel recall of toys using lead-based
paint killed suicide shortly after the news broke. They had to file a report with the Consumer Product
Safety Commission as well. China's products have also earned a terrible reputation, with "Made in
China" becoming a warning label.

Because they were the ones who sold the toys, vendors were also engaged in the recall. By
identifying, they were able to assist in a variety of ways.

Mattel Management-

Mattel's CEO apologised, and the company said it has received 33 reports of this safety danger, one
of which involved a baby swallowing the screw. They reached a $975,000 settlement while denying
any wrongdoing. They were also scrutinised because of a more recent recall involving 18 million toys
with magnetic components. Mattel expressed regret for the Chinese people.

No company wants to be engaged in a product recall, especially one that entails negative media
coverage and a negative impact on the stock value of publicly traded corporations. In the long run,
this would damage the brand's reputation, diminish profitability, and affect the favourable
reputation of customers. Product liability is the responsibility of many different people in a company,
not just the manufacturing facility, the original toy inventor, or the raw materials supplier. Toy
companies and their manufacturing partners have a responsibility to market safe products.
Whatever policy is in place, management must improve their control and inspection processes to
find in-house product flaws rather than relying on outsiders to bring them to the company's
attention following consumer damage instances.

Ethical difficulties identified in the case-

Supply chain-

To avoid trademark infringement, Mattel maintained its own manufacturing facilities and kept strict
control. Mattel scrutinised goods as they came at the manufacturing entrance. Suppliers were
thoroughly inspected for hazards such as lead-based paint, and those who broke the guidelines were
fired. Around 37 main companies were contracted to produce toys. Each supplier would employ
their own mix of supply chain and operations management to make the items. As a result, Mattel's
ability to quality checks every level of the supply chain is affected.
Issues with manufacturing-

Lead paint was a constant source of worry. Lead was frequently used in paint until the 1970s. Lead
paint with a concentration of more than 0.06 percent was forbidden for house and consumer use in
the United States in 1978. Chinese businesses have implemented procedures to prevent the use of
lead paint on their products. Lead paint was used for a variety of purposes, including the following:

1) Non-lead paint is 30-60% less expensive than lead paint.

2) Purchasing from unlicensed vendors

3) Vendors who falsify certification paperwork

Problems with Design

In children's toys, small, strong magnets are used. Due to poor construction, magnets that are not
adequately contained may become dislodged and swallowed by children. If the gut is punctured, the
swallowed magnets may bond together across intestinal folds, causing catastrophic injury or death.
The first death from this cause was reported in 2005.

Parts of the toy may break off, creating a choking hazard to infants. Toys for extremely young
children should not have any loose small parts, and any small parts attached to toys should not be
removed.

Unethical behaviour within corporation

Using group norms, top-level management at Mattel did not prohibit unethical behaviour, which was
strengthened by the managers' conduct and lack of action with their suppliers.

Improper use of a product

Children regularly invented new ways to play that the creators had not anticipated. Cords could
wrap around the neck of a youngster.Features that could strangle a youngster if their head gets
caught in them.

Recommendations-

• There is a need of adhering to federal and state laws and regulations

• The company should give more importance on continuously reviewing supplier performance

• The company should also give importance on stronger internal quality control methods.

Conclusion-

The incident's consequences were not only costly, but they also harmed Fisher Price's reputation as
the world's largest toy company. They may have avoided this incident if the problem had been
reported earlier in the process or if proper quality controls had been in place. It is critical for
businesses to anticipate their working environments and adhere to legislation and standards. Safety
is something that cannot be compromised, and all steps must be done to ensure that consumers are
protected.
 2) What kind of issues management framework would you suggest to best explain this
case and why?
Mattel is known for their 100-page all around arranged emergency the board foundation that has been
tried since 28 reviews starting around 2000. Mattel talks with one voice, imparts reliably during the
emergency, acts speedily, and reacts with general acknowledgment and some other assumptions. All
program steps are the code for a fruitful emergency plan and reaction. At the point when Mattel
understood that the organization was in hot water, their first activity was to contact an administration
office answerable for toys and item wellbeing. At the point when government authorities declared
Mattel's underlying memory. Mattel's emergency supervisory group promptly set up open channels of
correspondence with columnists from significant media sources. The group messaged cautions about
media discharge, welcomed columnists to a phone gathering with the organization's administration,
and set up for the media to talk with key workers employed by Mattel.
Upon the arrival of the review, Robert Eckert, Mattel's supervisor, met with journalists for TV
meetings and calls. Mattel set up a helpline, reacted to in excess of 300 media demands in the United
States, and set page-full promotions in the New York Times and the Wall Street Journal over the
course of the end of the week.
Mattel additionally dispatched an internet-based mission to illuminate customers about review
regarding normal updates, talk rooms, message sheets, and online media. Mattel has been available to
the media and buyers are seeing the organization's new top-notch strategies and methods for quality
and wellbeing check, in spite of the fact that it obviously expresses that "there is no flawed
framework." Mattel additionally clarified that they were doing all that they could to evaluate the
circumstance at the creation level.
Now let us understand the issue management and How Mattel incorporated itself in the process finally
what ever the outcomes of it
Issue management
Issue management is a technique that helps you in managing issues quickly and effectively while
keeping your undertaking on time. The issue goal process assists with envisioning and track who is
resolving the issue, how they are settling it, and when they are settling it, all while fostering an
information base that will help your group in figuring out how to tackle future issues better and
quicker.
Notwithstanding, forestalling issues starts before the venture even starts, with a reasonable looked at
assessment of forthcoming risks. Distinguishing chances helps your group in managing unsurprising
issues that might create and settling them before they become hardships. In this way, before you
assemble an issue the board cycle, ensure you have a danger the executives plan set up to forestall
future issues.
1) ISSUES IDENTIFICATION
This is the first and the most important step in the process of issue management because of
the reason that it is important to know what we are dealing with before we start to actually
deal with it. Knowing what went wrong is the base for any action that can be taken in future
course of management.
In the above case, the things that went wrong are:
 Presence of lead content in toys
 Design flaws 
 Violation of consumer right to inform and safety rights

2) ISSUE ANALYSIS
Examine the project's impact as a result of this issue.
One might not realize it right immediately but there will be consequences that will be attached
to the issue that we are currently dealing with. So, this analysis will mainly focus on what is
coming our way because of the actions that are taken place currently. In some cases, you may
be unsure of the actual significance of a situation.
 In general, a company should be able to analyze the issue's impact on the company,
understand the depth and long-term effects before jumping into conclusion. In the above case,
these are the conclusions or the findings that can be figured out:
 Customer's losing trust.
 Conflict between Chinese manufacturers and Mattel corporation. 
 Outsourcing led to cost reduction but at the cost of quality

3) ISSUES EVALUATION
There are typically multiple approaches to a problem, the company must consider which
tactics to employ. There will be situations where a company might want to pursue many
options at the same time. Alternatively, there may be a single unambiguous action that may be
taken to minimize the situation.
Working with the team to go over several choices and determine what you could do, what are
the options and then narrow the choices down to your preferred choice. This is the strategy
that will help company to evaluate its issues, throws light on the problems and then helps in
understanding of the available choices. With regard to this case, evaluation can be drawn as
such:
 Regain their brand image should be one of their top-most priorities.
 The company should also work on maintaining healthy relationship with the suppliers
for long term benefits.

4) TAKE ACTION
After that, follow through on the action plan that is decided based on the previous steps. As a
company, carry out the actions you identified. Trust your subject matter specialists to carry
out their tasks and follow the company hierarchy, be accountable.
Work through the action plan and keep note of everything you do in the issue tracker so the
company knows where it stands. With respect to this case, the company should work on;
 Company can focus on reducing the number of toys produced through contract
manufacturers.
 Revisiting the appropriate standards expected from Chinese sub-contractors.

 Making sure that the company knows what is the damage is done in the market and
try to be more transparent and open to public opinion to make the situation better.
 5) MONITOR AND REVIEW
Finally, keep track of your progress and evaluate how effective your actions were. In the end,
you want to solve the problem. This could entail locating a new provider, bringing in a
temporary resource, or something else. You can close the issue on the tracker after you
believe the problem has been resolved. I'd also inform everyone who needs to know, such as
your project sponsor, at this stage so they aren't concerned. On your monthly project report,
you can additionally report what you've accomplished.

Six step of issues management process

1. Environmental Scanning and issues identification

2. Issue analysis

3. Issues ranking and prioritizing

4. Issues resolution strategy

5. Issue response and identification

6. Issues evaluation and monitoring

Environmental Scanning and issues identification

Environmental scanning leads to the identification of many issues that affects the organization. It
results in a mass of information related to different sectors of the environment. There is a wide range
of methods and techniques available for environmental scanning.

This is the first and most important part of issue management. This stage goes beyond identifying
existing challenges but involves the project manager being proactive. While issues that have already
occurred are easy to spot, issues yet to occur are more difficult to identify. It is the project manager’s
duty to identify emerging issues and proffer solutions before they arise, where possible.

For issues that have already occurred, the issue log is a great way of identifying issues. As earlier
mentioned, issues are unplanned, unforeseen challenges that occur during the course of a project, so
the issue log is used to record all issues as they occur. Any stakeholder can identify an issue;
therefore, relevant stakeholders should be trained on how to enter issues into the log. Once issues
have been logged, it then becomes the responsibility of the project to analyze the identified issue

In large organizations, there is always an issue manager. The issue manager is often experienced in
the field and it is his/her duty to identify and ensure that all issues are effectively documented. The
issue manager is responsible for taking ownership of all issues that occurred during the project.
Issue analysis

Once an issue has been identified, the next step is to carry out a detailed analysis of the identified
issue. It is important to know that an effective analysis is focused on identifying the root cause of an
issue.

Since issues are unplanned/unforeseen and can hardly be preplanned against, it therefore becomes
your responsibility as the project manager to solve the issues before they get out of control. It is not
uncommon for project managers to begin proffering solutions once the issue has been identified.
However, this is the wrong first step, as it often results in project managers solving the wrong
problems.

An issue can be likened to a fever, which can be caused by a lot of reasons. A fever is a symptom for
a lot of diseases and treating a fever without understanding the cause of the fever can be catastrophic.
The same thing happens when an issue is solved without understanding the root cause.

Issues ranking and prioritizing

Facilitates a systematic, rational, and transparent decision-making process. Assures a fair and
inclusive decision-making process that generates priorities reflecting values and opinions of all
stakeholders. Assures that problems are prioritized to achieve the greatest impact on MCAH
populations. Identifies a manageable number of priorities. Can increase stakeholder involvement and
commitment to partnering to solve problems. Regain their brand image should be one of their top
most priority.

Issues resolution strategy

Once we have resolved objects or issues, we are set free from fog and confusion. Thus, to “resolve”
something means to decide or determine an issue with confidence and clarity. To “resolve” means to
be set free from doubt and uncertainty and confusing desires.

Resolving tactical issues

Tactical issues are usually decisions hiding as issues. Team members will often want to bring up an
issue and discuss it verbally. This is both inefficient (talking takes longer than reading) and ineffective
(only the most forward people speak up and get heard).

Instead, require that anyone who presents an issue at a team meeting do so in writing. This should be
in the Issues and Proposed Solutions section in the relevant meeting's Asana project.

The write-up should include both a detailed description of the Issue as well as their Proposed
Solution. They may say “I don’t know the answer,” but they should take a guess. This may seem
aggressive, but it creates a flag in the sand, which generates a much more productive discussion and a
quicker decision time, which ultimately is more important than appearing to be humble.

Resolving performance issues

Performance issues happen when mistakes are made (e.g., an email newsletter sent to the wrong
people). They are best addressed either immediately (in a private setting) or shortly after (in a one-on-
one).

Usually these are quickly resolved. Once you've given the feedback regarding the mishap, we suggest
asking for a “habit” to ensure that it doesn't happen again. For example, you could create a checklist
to run through before, say, releasing a blog post.

Larger issues require a post-mortem to learn from them and prevent them from recurring in the future.

Resolving interpersonal issues

Interpersonal issues are generally caused by a lack of trust between two people—trust that someone
understands what you're saying, trust that they will do a good job, or trust in their motives (are they
acting in the best interests of the company).

Usually interpersonal issues happen because people don't feel heard by each other. There is a simple
solution to this: repetition. Get both parties to say "what I heard was... is that right?" and summarize
what the other said. It sounds too simple to work, but it does.

Deeper interpersonal issues require Clearing conversations. Don't let these conversations linger—they
will just fester until resolution is impossible.

Issue response and identification

Issue Response Summary and Recommended Revisions . The Issue Response Summary has been
prepared by the Department of Natural Resources in response to comments on the Public Review
Draft (PRD) of the Tanana Basin Area Plan Amendment. Comments and responses are sorted by
subject primarily using the municipal selection name.

Issue Identification Issue identification helps a political party recognize and target the specific social
problems or policy areas on which it can and should act. Research Research involves gathering as
much reliable information as possible to inform the party’s understanding of and response to an issue.

Issues evaluation and monitoring

Once an issue has been identified and the root cause is known, the next step is evaluation. Evaluation
is simply the process of identifying and selecting the best issue resolution technique for a project
manager to use. Here the project manager and his/her team come up with various solutions based on
the amount of information gathered about the issue and the strategy of the project/project
organization.

For an identified issue, there are often various ways of solving it. For example, recruitment, internal
reshuffling, or working overtime can solve the death of a staff member. The project manager and
his/her team therefore identify all the ways an issue can be resolved and evaluate the methods to
determine the best and most effective approach that should be adapted. Some of the factors to
consider during evaluating are cost, ease of technology, deployment time, required skill set, etc. Once
the best option has been identified and selected, it is then passed to the relevant stakeholders for
approval and implementation.

This is the final stage of the issue resolution process. At this stage, the issue resolution action has been
carried out and the issue is supposedly resolved. However, there is the need for feedback, and this is
the function of the monitor and review phase.

The monitor and review phase of the issue management process checks the effect of the implemented
issue changes on the original project as a whole.

Issue analysis

 Monitoring and analyzing the business analysis

 Identification
 Prioritizing
 Analyze
 Strategic decision
 Implementation
 Evaluation

Crisis Management at Mattle

The Risk management technique that the organization has carried out to limit monetary misfortunes
may be judged sensible. As indicated by the organization's true assertion, Mattel thinks about hazards
as an unavoidable piece of daily existence, making the most common way of overseeing them a lot
more straightforward for the CEO, yet in addition the organization's administrators and staff.
Therefore, in the given situation, the dynamic interaction moves altogether more rapidly.

Aside from setting off the conspicuous issues with hazard the executives, the predefined issue fills in
as a sign of an amazingly helpless decision of natural substances. All in all, the methodology towards
acquisition, which is one of the fundamental components of a production network the executives, fails
to impress anyone in the setting of the Mattel Company. Normally, the organization has taken in its
example from the 2007 embarrassment, as it acknowledges unrefined components from guaranteed
providers just, yet the obtainment procedure has not been solidified into the organization's Supply
chain the board plan yet. To resolve the predetermined issue, one may recommend the reevaluation of
the corporate morals at Mattel

Crisis plan
Mattel is noted for its 100-page crisis plan and well-thought-out crisis response infrastructure, which
has been put to the test in 28 recalls since 2000. Mattel speaks with a single voice, maintains
consistency in communication during a crisis, acts fast, and responds with a public apology and any
other requirements. Every phase of the strategy is a code for a good crisis response and plan. When
Mattel knew the corporation was in trouble, the first thing they did was call the federal agency in
charge of toy safety. When federal officials announced the initial Mattel recall, Mattel's crisis
management team immediately set up open lines of communication with reporters from major news
organisations. With the recall news release, the team sent out e-mail notifications, invited reporters to
a teleconference with corporate leaders, and scheduled interviews with key Mattel employees.
Mattel's manager, Robert Eckert, met with reporters for television interviews and phone calls on the
day of the recall. Over the weekend, Mattel set up a helpline, answered to over 300 media requests in
the United States, and ran full-page advertising in the New York Times and the Wall Street Journal.
Mattel also started an online campaign that included regular updates, chat rooms, message boards, and
social media to notify consumers about the recall. Mattel has been transparent with the media, and
consumers are witnessing the company's new high-quality standards and procedures for quality and
safety checks, despite the company's unambiguous statement that "no imperfect system exists." Mattel
also stated that they were doing everything possible to assess the matter at the manufacturing level.
Apology to China
Mattel incorrectly placed undue blame on Chinese manufacturers, causing China's reputation to be
tarnished in the international media.
Mattel apologised to China at a meeting with Li Changjiang, China's product safety chief, on
September 20, 2007. "Mattel takes full responsibility for these recalls and apologises personally to
you, the Chinese people, and all of our customers who received the toys," Dombrowski writes in the
apology. "Mattel should appreciate our partnership," China said in accepting the apologies. I sincerely
hope that Mattel can learn from these instances and strengthen their control methods," says the author,
who believes that China will restore customer faith in "made in China" items.
RESULT OF CRISIS:

Mattel looked to handle the situation well by being forthright and honest about the big toy recall.
Mattel's homepage has a dedicated big red link to toy recalls, which includes information regarding
recalls that affect all countries, what toys are being recalled, where to bring recalled items, and a
description of Mattel's three-point safety check system:
1. Mattel will ensure that manufacturers only use paint from approved suppliers, and each batch of
paint from all vendors will be tested. If the paint does not meet Mattel's requirements, it will not be
used.
2. Mattel is tightening control at every stage of the manufacturing process and performing random
inspections at all vendor locations.
3. Mattel promises to thoroughly test all completed products before they reach consumers. Before
they can be sold, the toys must pass a battery of stringent safety tests.
Coverage in the media
The majority of media coverage of the Mattel toy recall focused on the lead-based paint recall,
ignoring the magnetic toy design flaw crisis, which prompted the China bashing products to respond,
"Made in China should be viewed as a warning label." Many news sites stressed the significance of
China establishing strong safety measures before endangering additional people's lives.
Mattel had drastically different media coverage because the focus was on Mattel's prompt apologies
and dissemination of recall information. The fact that key Mattel officials engaged with the media
helped the company gain a positive reputation.
After the crisis, the regulatory structure in the United States has changed.
The US Consumer Product Safety Commission is "responsible with protecting the public against
unacceptable risks of serious damage or death from thousands of different types of consumer items
under its authority."
POST-CRISIS

 Regain worldwide customer and shareholder confidence.

 Rebuild the company's image and reputation as a socially conscious organisation.
 Maintain an open and honest relationship with the public.
 To increase quality standards at overseas production sites, learn from past mistakes.
 Maintain positive relationships with China and other vendors.
 Randomly visit production sites and conduct batch testing.
 Work with the US government, international governments, and the CSPC to enhance the
quality of children's products around the world.
 Encourage the use of 360-degree feedback.
 Plan and implement more effective strategies in the event of future crises.
 Recruit the top personnel from within the company to join the BCCM team.
Mattel recalled 19 million toys between August and September 2007 for two different causes. The
fact that both recalls happened at the same moment makes this the company's largest recall ever.
1. The very first toy recall was caused by faulty magnets. The toy magnets' design included
components with high-energy magnets that could easily come free, posing a concern to young
children and new-borns who could swallow the magnets, which could then cling together in
the digestive tract and burst stomach tissue. The magnets' strength, combined with Mattel's
poor toy design, made the toys a serious hazard for young children. Mattel's website
(http://corporate.mattel.com) lists 71 different toy models and brands that have been recalled
due to faulty magnets.
2. The second toy recall was prompted by high amounts of lead-based paint detected on several
toys' surfaces. Mattel had previously provided a list of eight approved paint suppliers to use in
China, but subcontractors decided to utilise unapproved sources to save money. In several
cases, the lead content exceeded the permissible limit by more than 180 times. Children are at
risk from lead-based paint because high levels cause learning and behavioural issues, sluggish
muscle and bone growth, hearing loss, anaemia, brain damage, seizures, coma, and, in rare
circumstances, death. Mattel recalled 91 different kinds and brands of toys due to dangerous
amounts of lead paint.
CONCLUSION:

Mattel is a well-known toy company throughout the world. However, when the lead paint issue
occurred, it risked losing both its brand image and revenue. It acted in a way that distinguished it from
the majority of businesses. It began by voluntarily broadening the scope of the probe and issuing a
recall for millions of possibly hazardous toys. Second, it apologised to its customers for the gap in
safety and quality control, as well as the product's unsafe design. It also expressed apologies to
Chinese producers who had been harmed as a result of the scandal's anger, despite the fact that it was
not responsible for the quality or safety violations. Mattel handled the matter openly, even seeking
government assistance to enhance the toy-making process. Finally, a sophisticated worldwide safety
and quality assurance process was built. Mattel benefited from these suggestions in a number of ways.
For starters, Mattel's transparent approach gave all stakeholders a complete picture of the issue and
how the company was adjusting the entire process to fix it. Second, an improved method aims to
prevent such a miscalculation from happening again in the near future. As a result, Mattel was able to
gradually restore the trust of its customers.

Similar Cases on Recall of Product Worldwide

1) Johnson& Johnson: -The Matter of Trust case:
Johnson & Johnson (J&J) (Tylenol, 1982):  Johnson & Johnson (JNJ)
recalled all of its Tylenol products in September 1982 after 13 individuals
died after ingesting pills purchased in the Chicago area. It was determined
that someone entered retail stores and tampered with the bottles, adding
potassium cyanide.
2) Merck (Vioxx): -Vioxx was an arthritis treatment medicine made by
Merck (MRK) and authorised by the FDA in 1999. MRK recalled Vioxx
in 2004 after receiving data from a clinical trial that showed the medicine
increased the risk of heart attacks. Merck has spent around $4.85 billion
settling 27,000 cases involving heart attacks and strokes. On the news, the
share price of MRK plummeted, and it took almost a year to recover.

3) Pfizer (Valdecoxib): - Because of heart attack and stroke worries related

to Merck's large Vioxx recall, Pfizer's (PFE) arthritis medicine
Valdecoxib was taken off the market. PFE was charged $1.8 billion in
legal fees as a result of the recall. PFE was subjected to one of the highest
criminal fines in US history, in addition to usual legal fees. Despite the
recall, PFE's stock price did not fall in the long run.

4) Dell (Batteries): - Dell (DELL) recalled 4.1 million Sony lithium-ion

batteries in August 2006. (SNE). Several instances of laptop fires caused
by the batteries triggered the recall. This was one of the largest electronic
safety recalls in history. Dell's stock price fell in response to the reports,
but shortly recovered.
5) Aqua-Leisure Inflatable Baby Boats: This product, as the name implies,
was created to allow infants and toddlers to float in pools. The straps that
held the baby's legs in place, on the other hand, tended to tear, enabling
the infant to tumble through. Despite the fact that Aqua-Leisure was
aware of the problem as early as 2003, the business did not recall the
product until 2009, when at least 30 people drowned.

6) Lawn Darts: As you might expect, a toy with razor-sharp, weighted

points that children could toss about the yard was never a good idea, but
lawn darts became popular in the 1980s. Lawn darts have killed at least
three children, and they were briefly prohibited in the United States in the
1980s, but the maker successfully appealed the restriction and was able to
continue selling the product as long as it was marketed only to adults. A
father who lost his daughter in a lawn dart accident eventually persuaded
the CPSC to outright ban lawn darts and remove them from store shelves.

There are many more such cases in the history which violated ethics and
put their stakeholders at risk.